CBO says Minimum Wage hike will cost around 500,000 jobs (1 Viewer)

[timschochet]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/

The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher.

Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

 

[Abraham]

500 k is in the middle between 0 and 1,000,000.

 

[shader]

Get ready for the Dollars Menu

 

[Ilov80s]

500 k is in the middle between 0 and 1,000,000.

Good point. Does C-BO know that?

 

[Maurile Tremblay]

500 k is in the middle between 0 and 1,000,000.

It's also in the middle between 487,283 and 512,717. And between -998,999,999 and 999,999,999.

 

[Homer J Simpson]

500 k is in the middle between 0 and 1,000,000.

It's also in the middle between 487,283 and 512,717. And between -998,999,999 and 999,999,999.

Can we get MoP to verify this?

 

[Ilov80s]

500 k is in the middle between 0 and 1,000,000.

It's also in the middle between 487,283 and 512,717. And between -998,999,999 and 999,999,999.

Can we get MoP to verify this?

A busy math teacher like MoP is unlikely to have time for MT's voodoo numbers.

 

[Clifford]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/

The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher.

Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

Something has to push automation forward.

 

[NCCommish]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

 

[Homer J Simpson]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

The likely range, the range with a 2/3 probability, goes from a very slight decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and thats consistent with a balanced reading of the literature, Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). It could be smaller job loss, it could be larger job loss.

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

Gonna get MoP on this too.

 

[DiStefano]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

 

[Dinsy Ejotuz]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

I know your heart breaks for them, your concern for others shines through in every post, but +50/-1 is pretty good policy in the real world.

 

[NCCommish]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

He has now basically said it could be zero job losses just as easily as a million. Is he an economist or a weatherman? The literature suggests that increased demand increases need for workers.That literature is called the Theory of Supply and Demand. So if losing your 7.00 an hour job leads to gaining a 10.10 an hour job a couple of weeks from now did you win or lose?

 

[Sarnoff]

Get ready for the Dollars Menu

Where have you been?

McDonald's got rid of the "Dollar Menu" last year. And they say inflation isn't happening. They now call it the "Dollar & More Menu", which is a real headscratcher because isn't that just everything? I mean, a $8 combo meal counts as a dollar or more.

 

[Bottomfeeder Sports]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/

The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher.

Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

Shame we have no recent articles that looked at actual impacts where the minimum wage has already been increase. Oh wait!“Our data show that an increase up to $13 an hour has no measurable effect on employment,” said Michael Reich, a Berkeley economics professor with the Institute for Research on Labor and Employment.

 

[Arsenal of Doom]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/

The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher.

Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

Shame we have no recent articles that looked at actual impacts where the minimum wage has already been increase. Oh wait!“Our data show that an increase up to $13 an hour has no measurable effect on employment,” said Michael Reich, a Berkeley economics professor with the Institute for Research on Labor and Employment.

This is the type of law that would have a wide variance in the regional effects. In my industry we hire quite a bit at the lower end of the wage scale, although typically not minimum wage level. This would still cause us to have to raise the base wage on several programs running in our more rural locations. Cities are already more likely to be paying above the legislated minimum wage for all but the lowest skill type work.

At present I would actually favor the elimination of the minimum wage, coupled with a Basic Income Guarantee as a better way to deal with lower income poverty/quality of life.

 

[Ilov80s]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

The likely range, the range with a 2/3 probability, goes from a very slight decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and thats consistent with a balanced reading of the literature, Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). It could be smaller job loss, it could be larger job loss.

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

I know your heart breaks for them, your concern for others shines through in every post, but +50/-1 is pretty good policy in the real world.

+50/-1 = -50 Mathematical proof this is a bad move.

 

[Dr. Gobbler]

Let's scare the plebes by telling them if we raise minimum wage there will be less jobs even though history shows different!

:22 words a Conservative would say:

 

[Hastur]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

However, we should do a long range(20-30 years) educationally based program on personal finance, economics, and money management. I don't have the evidence/link, but I'm sure there is a correlation between minimum wage workers and 'pay-day' loans.

 

[BigSteelThrill]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

A: No.

 

[Johnny Rock]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/ The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher. Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

Shame we have no recent articles that looked at actual impacts where the minimum wage has already been increase. Oh wait!“Our data show that an increase up to $13 an hour has no measurable effect on employment,” said Michael Reich, a Berkeley economics professor with the Institute for Research on Labor and Employment.

Some great comments attached to that article. I read the article and only the first page of comments. Here's one:"to say that the drastic living wage program in SF has not had an effect on the city can only show the height of ignorance and hypocrisy by the left.

Live in the SF bay area.

The same item in SF costs 10-15% more in SF than the Bay Area.

That only hurts the poor.

Places like the Mission are becoming gentrified as the poor leave SF as fast as they can.

Those that remain take Bart to grocery shop in Oakland or SSF. You see that everyday.

And small business, unless its a dotcom, has fled the city. And the largest Dot Com left SF for the SE. Red Hat.

The unemployment rate among what's left of the poor is extremely high.

The crime rate is very high.

So if you like a city that is forcing the poor out, and is left with high prices and only major corps, then you love SF.

And those that are left really don't mind the high prices.

I mean Google has taken over the upper mission (used to be working class neighborhoods, as the poor and working class have been forced out of the city.

But maybe that's what these people who are so ignorant of basic economics want."

Another good one:

"By the way of comparison-- a San Francisco yearly medium household income average is about 75k with homes now averaging 750k in value; Seattle sits itself around a 63k medium income household with house values at 440k. If you raise minimum wage in SF by 26% and then in Seattle by 60% you will kill the infrastructure of the city economics. I want someone to argue how this could not happen, would LOVE to hear it from someone who understands business in action, not something you read in a book or take in a class.

This would hurt the restaurant industry substantially, not just because of higher waged overhead, but expect tips to go from 20% to 5% because of higher food costs. More eating at Arby's than Applebees.

What about retail? Our forgotten friend--- the one's who have had the fortitude to still stay in business taking more heat than anyone; they will be crushed. They can't raise their prices like everyone else because ONLINE BUSINESSES (amazon, ebay, etc...) will kill them cuz they wont have to pay the same outrageous $15k/hr overhead. Sad.

I almost think that this plan is fueled by big business to squash out the small guy so we're forced to eat at Arby's, shop at Wal-Mart, get our oil changed at Jiffy-Lube and get pet food at Petco."

One more:

"You can find studies to back whatever you want. Letting government dictate wages should be a concern for everyone. Are we still basing this on a living wage or trying to stop it just before we know businesses will crumble?"

 

[timschochet]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

I know your heart breaks for them, your concern for others shines through in every post, but +50/-1 is pretty good policy in the real world.

It's not a quid pro quo, NC. You MAY be improving the lot of people on minimum wage (arguable) but they're not gaining new jobs. Meanwhile the 500k (or whatever the number is) lose their jobs. Not an even trade off, even if you support the government forcing the redistribution of wealth (which I don't).

 

[John Bender]

Tim's right. And I've never agreed with him on anything, like, in the history of everdom

 

[Maurile Tremblay]

And they ignored the jobs created by increased demand.

They didn't ignore it. They explicitly took it into account. From the report:

An increase in the minimum wage also affects the employment of low-wage workers in the short term through changes in the economywide demand for goods and services. A higher minimum wage shifts income from higher-wage consumers and business owners to low-wage workers. Because those low-wage workers tend to spend a larger fraction of their earnings, some firms see increased demand for their goods and services, boosting the employment of low-wage workers and higher-wage workers alike.

Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

I don't think this is type of argument I'd use if I supported increasing the minimum wage. At a first level of analysis, lots of low-wage workers will benefit from an increased wage while a few will be harmed by becoming employed. The harm from becoming unemployed is a lot greater than the benefit of making an extra few bucks an hour -- but if you ignore that and just count heads, it looks like a lot more people will benefit than will suffer from an increase in the minimum wage.

But let's go to stage two of analysis, which takes into account not only the effects on workers, but also on consumers (and employers). Lots of low-wage workers will benefit from an increased wage while many, many more consumers (and shareholders of employers) will be harmed by it. The benefit of making an extra few bucks an hour is a lot greater than the harm from having to pay an extra few cents for a Big Mac -- but if you ignore that and just count heads, it looks like a lot more people will suffer than will benefit from an increase in the minimum wage.

So judging the benefits and harms by counting heads doesn't seem to favor increasing the minimum wage.

 

[Maurile Tremblay]

At present I would actually favor the elimination of the minimum wage, coupled with a Basic Income Guarantee as a better way to deal with lower income poverty/quality of life.

There are a lot of pretty compelling arguments for this position, IMO. If we are going to increase low-wage workers' earnings above the market rate, why shouldn't everyone chip in via taxes instead of concentrating the entire (direct) burden on the employers of those workers? Having everyone chip in seems more fair, and it would also eliminate a big reason for employers to substitute other inputs in for the labor of low-wage workers, so there should be no negative effects on employment.

What do you think about the counterargument that it's psychologically healthier for people to believe that they've earned the entirety of their income, rather than believing that they've received a handout from the government? Might a minimum wage be better than a Basic Income Guarantee in at least that one respect?

 

[BigSteelThrill]

at leastumm what? is Tim actually Stuart Barney?

 

[Maurile Tremblay]

Yeah, "at least" is not accurate. The CBO estimates that raising the minimum wage to $9.00 will reduce employment by around 100,000 jobs, but it could be higher or lower; and that raising the minimum wage to $10.00 will reduce employment by around 500,000 jobs, but it could be higher or lower. It could cost only twelve jobs. This kind of forecasting is not an exact science. There are a zillion unpredictable variables that could affect the results. NCC's weather analogy is apt.

 

[Loan Sharks]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

A: No.

The correct answer is A: Yes, No & Maybe.

It really depends on the industry, how the majority of the employers react to the increased cost and where the majority of the minimum wage earners are on in their consumption profile.

When the min wage goes up the employers are faced with higher operating costs. The employers can react several ways, cut staff or hours which is the does raising the minimum wage costs jobs debate comes from, or pass the cost on to consumers which is where the raising the minimum wage raises prices debate comes from. Of course the most likely is a mix of the two which is a reason why many economists can't agree on what will happen.

Also the higher wages can have an effect on demand curve mostly on necessity goods since lower income earners tend to spend a higher percentage of their income on needs rather than luxury items.

 

[timschochet]

OK, changed the title.

I'm intrigued by the Basic Income Guarantee, but let's face it, it's never gonna happen. Too many people, without thinking about it too deeply, will dismiss the entire idea as unAmerican. It's fun to talk about on a message board but that's about as far as it gets.

 

[timschochet]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

A: No.

The correct answer is A: Yes, No & Maybe.

It really depends on the industry, how the majority of the employers react to the increased cost and where the majority of the minimum wage earners are on in their consumption profile.

When the min wage goes up the employers are faced with higher operating costs. The employers can react several ways, cut staff or hours which is the does raising the minimum wage costs jobs debate comes from, or pass the cost on to consumers which is where the raising the minimum wage raises prices debate comes from. Of course the most likely is a mix of the two which is a reason why many economists can't agree on what will happen.

Also the higher wages can have an effect on demand curve mostly on necessity goods since lower income earners tend to spend a higher percentage of their income on needs rather than luxury items.

Like all populist ideas, none of these alternatives is ever really considered by the people who propose this. What they seem to have in mind are a bunch of rich Uncle Scrooge types, who if forced to raise wages will have to dig into their vaults filled with gold and dollars and dish a little more out. Nobody gets harmed except that the Swiss bank accounts are a little less solvent.

 

[LinusMarr]

I am sure the liberals will love it since their king says "it rocks"....

 

[Loan Sharks]

And they ignored the jobs created by increased demand. Further the CBO chief pretty much admitted he really has no idea.

“The likely range, the range with a 2/3 probability, goes from a ‘very slight’ decrease to a decrease of about a million and the 500,000 loss is essentially in the middle of that range and that’s consistent with a balanced reading of the literature,” Doug Elmendorf, director of the Congressional Budget Office, told the Senate committee on Health, Education, Labor and Pensions (HELP). “It could be smaller job loss, it could be larger job loss.”

Again completely ignore increased demand further the literature isn't really all that clear either. Lastly people seem to ignore the CBO also said that 25 million people would directly benefit from a raise in the minimum wage. So if you believe 500K you have to believe 25 million. 25 million is a lot more than 500k.

As for the 500k, let them eat cake.

He has now basically said it could be zero job losses just as easily as a million. Is he an economist or a weatherman? The literature suggests that increased demand increases need for workers.That literature is called the Theory of Supply and Demand. So if losing your 7.00 an hour job leads to gaining a 10.10 an hour job a couple of weeks from now did you win or lose?

If there is a price floor there is already a excess supply of labor. I don't disagree with you at all that may be an outcome, but there are many variables that would lead to other outcomes.

 

[shader]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

A: No.

Prices at stores that pay minimum wage will without question go up.

 

[Loan Sharks]

Yeah, "at least" is not accurate. The CBO estimates that raising the minimum wage to $9.00 will reduce employment by around 100,000 jobs, but it could be higher or lower; and that raising the minimum wage to $10.00 will reduce employment by around 500,000 jobs, but it could be higher or lower. It could cost only twelve jobs. This kind of forecasting is not an exact science. There are a zillion unpredictable variables that could affect the results. NCC's weather analogy is apt.

Yes, this MT and NCC are correct. This is not a simple supply and demand curve.

It is not a A+B=C it is more like a A through Z will = about this much, depending on how close out estimates are on a,b,c,though x,y,z are.

 

[avoiding injuries]

If jobs aren't lost and prices won't go up, why stop at $10?

 

[BigSteelThrill]

If jobs aren't lost and prices won't go up, why stop at $10?

Is that what conservatives are pushing for?

 

[John Bender]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

 

[DiStefano]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

Now you're talking! That's well on the way to being a "living wage". But there is still inequality; so raise your sights a little bit. Everyone gets a yacht and a Porsche, and a vacation home. For that, let's bump it up to 250k. Think of all the extra consumer spending!

 

[John Bender]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

Now you're talking! That's well on the way to being a "living wage". But there is still inequality; so raise your sights a little bit. Everyone gets a yacht and a Porsche, and a vacation home. For that, let's bump it up to 250k. Think of all the extra consumer spending!

#### that! Let's make it 500k a year!

 

[humpback]

Yeah, "at least" is not accurate. The CBO estimates that raising the minimum wage to $9.00 will reduce employment by around 100,000 jobs, but it could be higher or lower; and that raising the minimum wage to $10.00 will reduce employment by around 500,000 jobs, but it could be higher or lower. It could cost only twelve jobs. This kind of forecasting is not an exact science. There are a zillion unpredictable variables that could affect the results. NCC's weather analogy is apt.

Which goes for just about every estimate that is released, yet many people hold them up as some kind of concrete proof (when it supports their worldview, obviously). Even after the fact we won't know the exact impact.

 

[BigSteelThrill]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

Now you're talking! That's well on the way to being a "living wage". But there is still inequality; so raise your sights a little bit. Everyone gets a yacht and a Porsche, and a vacation home. For that, let's bump it up to 250k. Think of all the extra consumer spending!

#### that! Let's make it 500k a year!

So is this what you conservatives are pushing for?

 

[DiStefano]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

Now you're talking! That's well on the way to being a "living wage". But there is still inequality; so raise your sights a little bit. Everyone gets a yacht and a Porsche, and a vacation home. For that, let's bump it up to 250k. Think of all the extra consumer spending!

#### that! Let's make it 500k a year!

So is this what you conservatives are pushing for?

Everybody wins!

 

[BigSteelThrill]

If jobs aren't lost and prices won't go up, why stop at $10?

Everyone makes 150k a year!

Now you're talking! That's well on the way to being a "living wage". But there is still inequality; so raise your sights a little bit. Everyone gets a yacht and a Porsche, and a vacation home. For that, let's bump it up to 250k. Think of all the extra consumer spending!

#### that! Let's make it 500k a year!

So is this what you conservatives are pushing for?

Everybody wins!

Good good, I hope your congressmen work towards what you want as their constituents.

 

[Arsenal of Doom]

At present I would actually favor the elimination of the minimum wage, coupled with a Basic Income Guarantee as a better way to deal with lower income poverty/quality of life.

There are a lot of pretty compelling arguments for this position, IMO. If we are going to increase low-wage workers' earnings above the market rate, why shouldn't everyone chip in via taxes instead of concentrating the entire (direct) burden on the employers of those workers? Having everyone chip in seems more fair, and it would also eliminate a big reason for employers to substitute other inputs in for the labor of low-wage workers, so there should be no negative effects on employment.

What do you think about the counterargument that it's psychologically healthier for people to believe that they've earned the entirety of their income, rather than believing that they've received a handout from the government? Might a minimum wage be better than a Basic Income Guarantee in at least that one respect?

My guess is there would be a smallish percentage of the current workforce that would choose to drop out of being productive if/when a BIG comes around, and unlike Tim I actually think it's more likely than not in the next 50 years. I think it would mainly be around the margins though, for instance low-wage workers who currently work two or three jobs would have less incentive to do so. For people giving up an extra job and spending more time with their families, I have a hard time conceiving that as anything but a solid win. There is also plenty of actual evidence that poverty itself is incredibly harmful and has multi-generational influence.

So perhaps people feel better about themselves if they can pull themselves up by the bootstraps and out of poverty but I don't think a BIG would change many of those dynamics; people who want to scrape by at the margins, or who lack the capacity to do anything about it, will still do so. Most will want to strive for more and better things, just like the good capitalists we are.

I'm much more concerned about the inflationary implications of a BIG than any psychological problems. Honestly I think that whole argument is largely emotion driven nonsense.

 

[Dr. Gobbler]

You guys realize that the price of everything is constantly going up regardless if you raise minimum wage or not. Ok, maybe not VCR's but food, rent, all cost of living expenses keep increasing year after year. You have to at least keep pace with it. You can't have 5 years of cost of goods increase, all while productivity is supposed to be at its highest, things should be cheaper right, and not keep pace with it.

Unless you like revolution.

 

[Good Posting Judge]

http://www.washingtontimes.com/news/2014/mar/12/cbo-chief-projected-job-loss-minimum-wage-fluid/

The initial estimate came out in February, but yesterday the CBO chief reiterated that the 500,000 number was somewhere "in the middle"- it could be lower or higher.

Why are we doing this again? I know that Obama and the Democrats want to raise people out of poverty, which is a noble idea, but these proposals never seem to work. And the cost for this one is too high, IMO.

Your mom has cost around 500,000 jobs.

 

[sporthenry]

I'm not the smartest cookie in the toolshed, but...

If the minimum wage is increased, wouldn't prices across the board be raised(gradually of course) to compensate for this 'new found wealth'? Then, we are back at square one.

A: No.

The correct answer is A: Yes, No & Maybe.

It really depends on the industry, how the majority of the employers react to the increased cost and where the majority of the minimum wage earners are on in their consumption profile.

When the min wage goes up the employers are faced with higher operating costs. The employers can react several ways, cut staff or hours which is the does raising the minimum wage costs jobs debate comes from, or pass the cost on to consumers which is where the raising the minimum wage raises prices debate comes from. Of course the most likely is a mix of the two which is a reason why many economists can't agree on what will happen.

Also the higher wages can have an effect on demand curve mostly on necessity goods since lower income earners tend to spend a higher percentage of their income on needs rather than luxury items.

The third thing, which is what many hope happens, is that it cuts into record corporate profits. McDonald's made $5.5 billion in profits so they hope to take a piece out of that. Prices to an extent will still be determined in the market place, so while many companies in industries do use minimum wage, there are also some who don't (Costco and In and Out come to mind). So if they keep their prices low, other companies will have to respond.

Should companies be able to use minimum wage workers, who are then compensated by tax payers to meet minimum standard livings and take home billions in the process?

 

[sporthenry]

At present I would actually favor the elimination of the minimum wage, coupled with a Basic Income Guarantee as a better way to deal with lower income poverty/quality of life.

There are a lot of pretty compelling arguments for this position, IMO. If we are going to increase low-wage workers' earnings above the market rate, why shouldn't everyone chip in via taxes instead of concentrating the entire (direct) burden on the employers of those workers? Having everyone chip in seems more fair, and it would also eliminate a big reason for employers to substitute other inputs in for the labor of low-wage workers, so there should be no negative effects on employment.

What do you think about the counterargument that it's psychologically healthier for people to believe that they've earned the entirety of their income, rather than believing that they've received a handout from the government? Might a minimum wage be better than a Basic Income Guarantee in at least that one respect?

Does the BIG come with repealing any and all minimum wage? Are wages in addition to the BIG or does the BIG just get you to a specific income level? I'm not against a BIG and something will have to happen with structural unemployment only getting worse.

Just not sure why anyone would work unless the income was in addition to the BIG? And beyond that, seems like wages would become extremely depressed (although I could be economically wrong on this).

 

[timschochet]

You guys realize that the price of everything is constantly going up regardless if you raise minimum wage or not. Ok, maybe not VCR's but food, rent, all cost of living expenses keep increasing year after year. You have to at least keep pace with it. You can't have 5 years of cost of goods increase, all while productivity is supposed to be at its highest, things should be cheaper right, and not keep pace with it.

Unless you like revolution.

It's easier to afford everything when you don't pay your debts.

 

[drummer]

You guys realize that the price of everything is constantly going up

Even bets?