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Sat Feb 16, 2013, 10:07 AM

A question about minimum wage vs pay increases?

The argument I hear from many on the right is that the minimum wage will create inflation and drive up prices for everyone. However, if the employers decided to voluntarily give their employees a pay raise, it would not create inflation or drive up prices?

But the problem is that employers do not give their employees pay raises that will keep up with the cost of living. If they did, prices would go up everywhere.

So, it's a Catch-22 for low-wage workers. They can never make a living wage because of the damage they would cause to the rest of the economy.

The fact of the matter is that the Republican Party has used this same argument everytime the minimum wage has been raised in the past and everytime they have been proven wrong. But they return like a dog to its vomit.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 10:15 AM

1. The problem is that the rich CEOs

are unwilling to give up even a small amount of their obscene and disproportionate profits.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 10:23 AM

2. The Minimum Wage Stands In The Way Of A "Free Market" Wage That The GOP And

US Chamber of Commerce supports. That is why there will be no increase if it is up to them. There would be no minimum wage or labor standards as we know them now if it was up to them.

It is all part of the "global economy" agenda that must be ruled by the laws of "supply and demand". It is a libertarian dream to have no regulations that interfere with business operations. Their idea is the free market will create prosperity for everyone.

Does anyone think that they will ever give this idea up. Their ideology since Reagan permeates everything in our society and internationally.

In case you have not NOTICED it Wall Street is encouraging investment in "international funds" and "international stocks" in "foreign" stock exchanges like Japan, China, India et al as a way to make money on investments.

The minimum wage raise is dead and the minimum wage will be dead if they ever get all the power like they had under Bush.

The GOP and it allies no longer care about THIS country and what happens to it. If you look at where they stand on just about every issue, their interests lie in creating middle classes overseas and NOT here. Besides it is cheaper because the masses overseas can reach middle class in their economy on less than $1 an hour.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 10:32 AM

3. Higher wages would lead to economic growth

Everyone would have more money to spend, and that would improve sales for business.

Right now, we're hearing that Walmart is experiencing slower sales, and that's because after decades of barely making it, everyone is now tapped out. They just don't have anything extra to spend, so they buy the necessities, and even then some do without because they can't afford it.

These CEO's are very short sighted, they don't seem to get this basic fact of economics. It would take a few months for them to catch up, but they would indeed catch up.

I'm sick and tired of hearing how these CEO's must be paid huge salaries, because the company couldn't get good people otherwise. Well, if they can't understand how our consumer oriented economy works, they aren't good and shouldn't be in that position.

Over the last year or so, I've read about small businesses that pay their employees well, provide good health care and benefits for them, and guess what--they're making a lot of money! Happy employees work more efficiently, and take the extra effort to improve bottom line profits for their employers, because they know they are appreciated and they want the company to do well.

You walk into a Walmart, and their employees aren't happy, you can see it in their faces. They have a dead end, low wage, no benefit, crap job and they know it. And Walmart is going to get less than 100% from most of them, because they're stressed out about how they're going to pay bills, put food on the table, get braces for the kid, etc. You can't perform at your best carrying around those burdens.

Years ago, I had one of the company partners ask me why we didn't have better people working for us. I asked him if he'd seen the payroll budget, and he hadn't. I showed him how much was budgeted for payroll, benefits, etc., and told him we basically had what we deserved.

In his region, payroll was increased and we were able to hire better people. Profits improved. Instead of having people who barely got by doing their job, we had people who excelled at their jobs.

Congress makes about $174,000 a year, and most of them are millionaires. How does that work? It's way past time to get some average Americans in Congress who understand what it's really like to try to get by these days. When that happens, things might get better for everyone. The way it is now, Congress for the most part is so out of touch and compromised they may as well live on another planet.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 10:44 AM

4. There should be a minimum income for every person

to have some trying to decide which yacht to use while others cant feed themselves is obscene.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 10:46 AM

5. Most employers give their employees pay increases to get more or better quality employees

If an employer pays their employees $2/hour above minimum wage where most other jobs in their industry in the area pay minimum wage, they probably upset about an increase in minimum wage because they'd lose their edge in competing for better employees.
Regardless, since income inequality Is so high, companies could level the wags scale a bit more. Some have. This seems to have been at the expense of middle income people though rather than the ones making 20+ times the pay of most of their workers.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 11:01 AM

6. Well there is a kernal

of truth buried in the mountain of bullshit. That is, that prices of commodities aren't fixed, obviously, but fluctuate relative to other commodities by supply and demand. Currency, too, is a commodity and, so, undergoes the same process. When inflation increases the price of potatoes, it's not necessarily that there's been a decrease in suppklly of tubers, but rather an increase in supply of currency, depressing it's value. This isn't real new or groundbreaking. And obviously there are *many* more forces at work - but as I say, this is the speck of factual information that feeds that particular Republican point. If we were discussing doubling or trebling the minimum wage instantly, you'd probably see that happen, that prices would spike up hard (and probably a big chunk of people spending like drunken sailors) but if we move a dollar or two? It's hardly enough to enact any real change.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 11:14 AM

7. They're also arguing in favor of the need to preserve income disparity

You've heard the argument before: "If that worker gets a raise to his minimum wage, then everyone else will have to get a raise, too."

Well, why? For what possible reason, except to preserve the disparity. i.e., to make sure that the bottom rung stays permanently on the bottom rung, and that the bottom rung stays the same distance away from the rest of the ladder.


There is no good reason whatsoever not to raise the minimum wage. Anyone who argues against raising it should have to live on it--and on nothing else--for a few years.

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Response to kentuck (Original post)

Sat Feb 16, 2013, 11:35 AM

8. Actually if all employers voluntarily gave their employees a pay raise I would guess that

 

Would be due to a tighter job market which would be more inflationary than a higher wage dictated by the government.

But it stands to reason that higher expenses would lead to higher prices. Wages are like any other cost to the business. For example I've been seeing the cost of my lunches go up as food prices go up.

The irony is with the ACA kicking in, businesses may be cutting back employee hours to 30 so an increase in minimum wage may not make up those lost hours.

Moreover a higher minimum wage added to higher health care costs make more automation and robots look than much more attractive. Businesses don't need to outsource to China anymore. For $20,000 you can get a robot that works 24/7.


Look at these two kids at Cornell who developed an RFID instant checkout. Pair that with your RFID charge card and there is no need for retail cashiers.

http://people.ece.cornell.edu/land/courses/ece4760/FinalProjects/s2010/jjs367_ky238/index.html

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