The True Cost of a Higher Minimum Wage

The Atlantic ^ | December 7, 2013 | Zachary Karabell, president, River Twice Research & River Twice Capital Advisors.

[2ndDivisionVet]

In his speech at the Center for American Progress this week, President Obama devoted considerable time to an issue suddenly much in discussion: the minimum wage. This is not a new debate. In fact, it neatly echoes the last time Congress raised the minimum wage, in 2007, which echoed the debates before that. Few economic issues are such sweet catnip to ideological camps, and there is precisely zero consensus about whether these minimums have positive, negative or no effect.

Supporters say that a higher minimum wage will give people a better standard of living and boost consumption. Detractors argue that it will lead companies to hire fewer workers and kill job creation. One thing no one addresses, however, is that regardless of whether the government raises the minimum wage, our society can’t endlessly coast with a system that includes wage stagnation for the many and soaring prosperity for the few, nor can the government snap its legislative fingers and magically produce income. Someone will pay for these increases; nothing is free.

You wouldn’t know that from the tenor of the debate. In Obama’s speech, he stated that, “it’s well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office.” He acknowledged that many resist the idea of mandating a wage above the current $7.25 an hour. “We all know the arguments that have been used against a higher minimum wage. Some say it actually hurts low-wage workers — businesses will be less likely to hire them. But there’s no solid evidence that a higher minimum wage costs jobs, and research shows it raises incomes for low-wage workers and boosts short-term economic growth.”(continued)

[SamAdams76]

Six Simple Steps for Escaping the Minimum Wage Trap

1. Obtain a minimum wage job. (Any minimum wage job will do.)

2. Tell your new boss that you would like to work as many hours as possible and to please call you first if he/she needs somebody to cover another shift on short notice.

3. Show up for work early and be ready to start your shift on time. Learn as much as you can about the other jobs and always volunteer to go above and beyond.

4. Display a positive "can-do" attitude and never complain publicly. If you have a legitimate complaint, schedule a one-on-one with your boss and offer a possible solution.

5. Once you have mastered your current job, let your boss know that you are ready to take on additional responsibilities and challenges. Offer to help train your replacement. (You are guaranteed a promotion with this approach.)

6. Repeat step #5 until you are running the operation.

Congratulations, you are a now a success story!

[C210N]

The left also wants a maximum wage. Indeed, they see utopia where minimum and maximum wages intersect.

[babygene]

I don’t know how I feel about this...

The FED has devalued the dollar significantly.

When I was a teenager 50 years ago, the minimum wage was a dollar an hour. The dollar is worth less than 1/10 of what it was back then. Inflation hurts all of us, but it hurts the poor the most...

[freedumb2003]

>>Six Simple Steps for Escaping the Minimum Wage Trap<<

Heresy!

Don’t you know that success is a result of luck???!

(/libtard)

[driftless2]

The era of well-paid-minimum training jobs is over. The facts are that if do not have some sort of a skill/training beyond a high school degree, you are going to have to struggle to get a job or make decent money. Even a college degree isn't enough much of the time.

The solution: get training in areas that business or the health-care industries desire. Work hard for it, stay out of trouble, don't have kids when you're a teen, and don't be deterred by failures here and there.

[Terry L Smith]

A higher minimum wage, simply means that “the generic burger corp joint”, passes the cost to those of us who go there, now.

Once they do, the magic is gone, and the customers dwindle.

Maybe good news for the Chinese restaurants, no?

[re_nortex]

THe minimum wage was pushed by a commie, Frances Perkins, a truly evil woman in the equally evil FDR administration. America did quite well for decades without it. In short, the very concept of the minimum wage is the vilest form of slavery for it prevents an employee from setting an honest value on his labor with the employer.

[jonrick46]

Raising the minimum wage benefits the unions by shifting the wage matrix upward. Soon the economic environment reacts by increases in the cost of living. People feel that cost of living adjustment with the increases in such things as apartment rents. Those who needed that increase in the minimum wage are right back where they started.

[Venturer]

Raise the minimum wage the same as they raise the Social Security check.

1.5%

[Extremely Extreme Extremist]

NY Slimes, 14 January 1987 - The Right Minimum Wage: $0

[digger48]

If I’m not mistaken, the current CEO of Walmart started out as a part-time shelf stocker.

[Mears]

Wow !!!

That’s a keeper for me.

.

[GreenAccord]

You know, usually trying to explain ANYTHING to a low-information voter or mush-brained liberal is an exercise in futility. But, folks, this is actually an EXTREMELY easy point to get across to even the most stubborn fools.

The minimum wage is arbitrary. It's labor effort that is what matters.

The “Hours of labor” required to purchase anything will eventually stabilize at the exact same level it was prior to an arbitrary increase.

To help a min-wage proponent visualize this, just think of a $75 product, such as a kid's bike, or a watch, or a coffee maker. I chose $75 since it's about 10 times the current minimum wage. You can really think of ANY price range, just be able to determine how many labor hours that is in current minimum wage dollars.

Then simply tell them that this $75 thing will cost $150 soon after the minimum wage increase, and they'll be in the exact same place they were before the minimum wage was increased. They're going to work 10 hours for that bike.

If there's any glimmer in their eye once you explain this, hammer it home with the additional story of how the guy building the bike wants more money too, once they got their “raise”.

[HiTech RedNeck]

More practically, not everybody can be the company president, or would even want to be.

[HiTech RedNeck]

The faster you chase your own tail, the sooner you’ll catch it? :-)

[Utilizer]

The facts are that if do not have some sort of a skill/training beyond a high school degree, you are going to have to struggle to get a job or make decent money. Even a college degree isn't enough much of the time.

Hate to burst your bubble, mate, but "College Degrees" in actuality mean little more than someone found a way to get paid for at least four years of "schooling" for a piece of paper worth barely more than the equivalent one from Russia, India, or Mexico, in declining comparison.

When I got out of the service, I worked me arse off on several projects run by "Engineers" and learned what a joke that was. When I attempted to explain to the higher-ups that I was actually the one doing all the work I was politely thanked for the input and then pointedly ignored.

When I mentioned it to a more senior Tech, he just looked bemused for a moment and then asked: "Didn't you notice the college degree in the manager's office? It's a scam. They all go to college for that piece of paper that gives them the right to lord it over the rest of us who do the actual work."

"It's kind of like being in the military: the Officers have all the titles and fancy geegaws and get all the credit for anything we do. The MasterChiefs and Sargent-Majors are the ones that actually know what is going on and make things happen, and us regular folk that in actuality WORK for a living are the ones that get the job done."

"They ALL went to college, kid. They're all part of the same social circle. If you don't have a college degree, well that's what a business has to show to anyone that is considering doing business with them. You make a product, there better bloody well be some "college degree" person you can point to, even if he is a total sodding git. You and I really design and build it, and we're the ones they rely on to make it work and keep it working, and that's it then."

"Welcome to the real world."P

[Principled]

The liberal mind just doesn’t understand the real world.

When a business experiences continuous costs, as a rule - long term they must be recovered. If such long term costs are not recovered, the business fails.

And there is only one continuous and indefinite stream of funds from which a business may pay costs - sales revenue.

[Axenolith]

Until they are replaced by a robot. Then the job is gone forever (or at least until post-apocalypse times...)

[HiTech RedNeck]

Someone has to service the robots, though.