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Reuters:
NEW YORK (Reuters) - A higher U.S. minimum wage is providing a cushion to the economy when it is most needed, according to a report released on Thursday.
Jonathan Tasini: The Minimum Wage: A Disgrace and a Scandal
Rep. Jan Schakowsky: Minimum Wage Increase in the First Hundred Hours
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More Statist studies to trick the uninformed...Minimum wage hikes cause massive unemployment for teenagers(when wages are set high more adults take the jobs that kids should have) So we have 2 things at play (1) Kids don't get work experience (2) Adults accept low paying job (not enough for a family).....Actually...If their were no minimum wage laws...All wages would be higher) ....Another bad point for Dems,because they love the poor(VOTING BASE)
There is NO relationship between the minimum wage and the unemployment rate.
Get that through your head.
The only thing minimum wage does is ensure that companies don't race to the bottom where wages are concerned. It also makes companies have to compete on their merits instead of how low they can squeeze their employees. In addition when wages are low, workers' discretionary spending drops, thereby reducing what companies earn.
Your Wrong...Read Economics ..quit listening to Dems
You mean demand drives the economy? SHOCK. AWE.
In America, there are people who believe that cutting taxes increases revenue. And there are people who believe that driving down wages is the key to prosperity. I have even heard it said that businesses get rich by losing money. What a country.
A quick economic lesson for you.
"there are people who believe that cutting taxes increases revenue. "
Price elasticity of demand - the change in demand as a result of a change in price. If price of something goes down it spurs demand because more people want it so long as there is no substitute.
There are two main scenarios price elastic products and price inelastic products.
Two quick examples wal-mart sells consumer goods which are almost all price elastic. Exxon sells oil which is a price inelastic product (because no suitable substitutes are readily available).
Wal-mart sells their goods at razor thin margins (last I checked they made $1 profit on every $78 or revenue) they usually have the highest revenue among all companies in the country. Exxon beat them last year because oil prices spiked.
The with taxes elasticity still applies. Heres the theory: low taxes make a higher income more attractive to workers; high taxes make other benefits (better health care, high 401k match, company cars, health club membership) more attractive to workers.
"there are people who believe that driving down wages is the key to prosperity."
If wages are lower the people who say, "I can't get a job." Can get a job because what they are leaving off is "I can't get a job because I don't have any skills/experience/talent and the people who are hiring can hire someone with skills/experience/talent for the minimum wage."
If there was no minimum wage a business could reach out to this unemployable person and give them an opportunity to gain some experience and or skills by hiring them at a low wage. Or bringing them on for a training period at a low wage.
Whether or not this is ethical is another issue, but it is a real situation. Just go ask any young worker how hard it is to break into the workforce right out of school with no experience.
"I have even heard it said that businesses get rich by losing money."
In business you have two kinds of costs fixed and variable costs. Fixed costs are incurred regardless of the level of output and variable costs change as the level of output changes.
If a company operates in an industry where the price they can charge is determined by a market, like the oil industry, the company will continue to produce their product so long as the difference between price and variable costs is greater than zero (price - var costs > 0). This is a loss minimizing strategy because the revenue while less than their total costs contributes to their fixed costs.
What eventually happens is suppliers with high variable costs shut down before suppliers with low variable costs. As those high cost providers remove themselves from the market, still incur fixed costs, and go out of business. This results in a decrease in supply and if demand stays the same or decreases more slowly than supply which will result in the price increase which will make the remaining low cost providers profitable again.
What a cute story for non cute koolaid abusers!
How can raising the minimum wage a few cents make an impact on an economy that thanks to Obama is a 12 to 13 trillion dollar economy in debt?
Let's see, how many minimum wage workers that DO NOT pay into the federal tax system benefit the overal economy?
I can't, it's impossible. Unless the koolaid is spiked with a whole lot of black vodka
Speaking of Kool Aid drinkers.......
With my wage and Part-time job (thank God I still have a job), the extra money
really makes little impact. I just hope I don"t end up paying it all back at the
end of the year!
I'm surprised the GOP hasn't already been claiming that the minimum wage hike caused the recession (instead of their banking buddies). Of course since this information that the minimum wage hike is actually good for the economy does not fit in with right-wing beliefs, it will be ignored when the GOP starts claiming that the recovery is being hindered by the minimum wage hike. Remember, the facts are in the tank for liberals and must be ignored by conservatives.
Obviously ... you ... have ... never ... worked ... for ... minimum ... wage.
Most of the states that are hardest hit like California ($8), Michigan ($7.40), and Florida ($7.21) already have minimum wages that are close to or higher than the new federal minimum wage. All total 26 states have a state minimum of $7 or more so I doubt the hike will help them much if at all.
Most economists agree that increased minimum wage actually creates unemployment because it makes labor more expensive. This impacts young workers the hardest, so I feel sorry for any kids looking for summer jobs this year.
Most economists say the exact opposite of what you say they do.
Are you suggesting notamoron isamoron?
In a survey economists were asked to respond to the following statement: "Minimum wages increase unemployment among young and unskilled workers."
The responses
Agree (45.6%)
Agree with provisions (27.9%)
Disagree (26.5%)
Source: http://www.indiana.edu/~econed/pdffiles/fall03/fuller.pdf
Page 378, page 10 in linked document
While many posters such as yourself just make stuff up, I don't.
A minimum wage is a price floor, every economist will tell you that a price floor will create a surplus due to high supply and low demand. Some feel that labor for some reason is an exception to this rule. I have only seen one study which makes an empirical argument for this stance and I have seen several that argue for the traditional view. I think the traditional view is more true than it is false.
Politically minimum wage is a gold mine, if a politician fights for and gets a minimum wage hike their poor constituents appreciate them and if they get fired because their employer can't afford to pay them more or because the wage increase makes a machine a better option than an employee they blame the employer for firing them.
Either way it is no sweat off my back, I don't work for minimum wage.
Gee, maybe that's why unemployment is so high.................hmmmm
What?? But, but that doesn't fit the talking points!! Minimum wage increases are supposed to kill the economy. All of the wise leaders of the RUshpublican Party, such as RushL, SeanH, and Dubya said so!
George Bush signed into law the first minimum-wage increase in over a decade. From $5.15 an hour to $7.25 an hour by summer of 2009.
He wasn't given a choice in the matter.
Yep Grunty1, that way the poor stay poor and beholden to the rich for everything.
Milton Friedman policy in operation....New World Order to come!
In my opinion the best stimulus would be single-payer health care, as the cost of those benefits to companies is a huge job killer. Non-profit single-payer health care.
It's about time we started building the economy from the bottom up again, for the last 8 yrs. we've tried building it from the top down and that failed and america is now an economic basket case.
If the economy is made up from 70% of the people then figure this out, if you don't pay the people you have no economy! What is so hard to figure out. What good does it do when you up the minimum
wage and then cut their hours? Fulltime is a thing of the past except for a few categories, but
retail and food is already down to intermittent hours, which means 3 to 19 hours per week, which has replaced the parttime employees of 20 to 34 hours per week!
I can attest to limited hours, pay and benefits in retail. In fact the company
I work for just eliminated all full-time employees that were elegible for benefits,
including some of the management! How can you live on even $8hr in this
economy?
couldn't they figure it out more money you make the more you spend
Well it makes sense. People earning minimum wage aren't going to be sticking it in their banks and taking it out thousands at a time to plan fancy five-star vacations.
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First Posted: 05-28-09 07:05 PM | Updated: 05-28-09 07:09 PM