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Minimum Wage


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#1 locally pwned

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Posted 26 January 2007 - 06:10 PM

Not long ago here in the States, the House passed a bill to raise the Federal minimum wage. This bill was then defeated in the Senate. Senate Republicans used filibuster tactics to prevent the bill from passing; it had 53 votes but required 60 to pass.

Now I realize that there are very different views on minimum wage out there, it's still an interesting topic. It illustrates some of the differences between schools of economic thought...but I think it's also a social and ethical issue as well.

Naturally, the working poor would be helped by it...but how much? Small businesses tend to be hurt by it...but how badly? Is there a way to raise the minimum wage with minimal impact on small business?
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#2 ddeerrff

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Posted 26 January 2007 - 11:28 PM

Not long ago here in the States, the House passed a bill to raise the Federal minimum wage. This bill was then defeated in the Senate. Senate Republicans used filibuster tactics to prevent the bill from passing; it had 53 votes but required 60 to pass.

A favorite tactic of the Dems.

Naturally, the working poor would be helped by it...

Tell that to the one who loses his job because his employer can no longer affort to pay the wages of four employees and has to cut back to three..
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#3 cowsgonemadd3

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Posted 26 January 2007 - 11:35 PM

Tell that to the one who loses his job because his employer can no longer affort to pay the wages of four employees and has to cut back to three..


Just what I was thinking.

It all goes down to we need a GREED law.

Did you know products in the stores are marked up by as much as 50 percent or more? A sale is really not a sale its just where the price should have started to begin with. ha ha

Over seas jobs has a lot to do with it.

Edited by cowsgonemadd3, 26 January 2007 - 11:35 PM.


#4 yoopergirl

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Posted 27 January 2007 - 12:20 AM

My take on this subject is that yes, minimum wage should go up, even more than it has. I'd like to see these voters in the house or senate raise a family on $5.50 an hour. HA! Right! Small businesses may SUFFER slightly but, oh well, so the owner has to hold off an buying his yearly new SUV or maybe take one less vacation. eeeks! Or wait, those are tax right-offs anyway, right? As for the four employees cut to three, it's a dog eat dog (edit=word to world) world people, just don't ever be the slacker.

Edited by yoopergirl, 27 January 2007 - 12:23 AM.


#5 locally pwned

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Posted 27 January 2007 - 12:57 AM


Not long ago here in the States, the House passed a bill to raise the Federal minimum wage. This bill was then defeated in the Senate. Senate Republicans used filibuster tactics to prevent the bill from passing; it had 53 votes but required 60 to pass.

A favorite tactic of the Dems.


It appears to be a favorite tactic of which ever party finds itself in the minority.


Tell that to the one who loses his job because his employer can no longer affort to pay the wages of four employees and has to cut back to three..


Or tell it to the family that just gained income? Tell it to the businesses that gain customers because a larger section of the population has more money to spend?

Granted, both sides to this issue are deep set on their beliefs. We each have a knee-jerk reaction. When I see Republicans blocking an attempt to raise wages, my first thought is, "yep, there they go...rich business owners protecting their own." But you no doubt hear about Dems trying to do the same and think, "Here they go, stomping on small business."

One of the big arguments against raising the minimum wage is that the cost of living goes up. This is true...but it goes up a small amount across the board. Therefore the cost is absorbed by all; the guy in the Lexus pays 25 cents extra for his burger, too. Thus, a small amount of the burden of modern living is shifted off our poorest citizens and evenly distributed across the whole.

It does hurt employers in the short term. But how much? First off, the raise would be over several years...it's not like wages would be going up 2 dollars next week.

Does every small business have to fire a worker? Probably not. Often companies are running at close to the optimal number of employees anyway (if the owner took any economics classes, that is). An employer has to weigh whether a loss of an employee would reduce productivity and therefore profits...if that loss is bigger that a wage increase, which I am willing to be is more often than not, then that worker won't be fired.

In the end, the cost of living goes up anyway; if wages stay the same, people have to keep working more and more to make ends meet. We went from a time where one family member could support a household, to a time where few can afford not to have both parents working.

Generally, the argument Classicals make against any minimum wage is that wage rates should be determined by the market; this would provide the highest number of jobs at the highest pay rate the market would bare.

This makes sense in theory, but doesn't describe what happens in practice.

1. For one, entire industries use exploitive tactics to keep overall wages low. This behavior, of course, spawned unions...which use the same tactics, but the other direction...cooperative bargaining to keep wages artificially high (by artificial, I mean "not determined by the market").* Generally, moderately-strong unions seem to be a good way to balance the market, in the sense that companies can't get too greedy, but the workers can't topple their own position. Non-union shops have to pay higher wages as well, to compete for good labor. The average worker makes more money, so he/she has larger amounts of expendable income...which is then spent back into the economy.

2. Classicals maintain that if wages were low across the board, and determined by the market, costs of living would also fall. It turns out that that depends on the elasticity of demand of a given product or service. In other words, health care will never reduce in demand...it gets more expensive all the time, but people still need the service. Therefore...it gets more expensive all the time. Education is another example. In the US there are fewer and fewer good-paying jobs that don't require at least some college education. Therefore, demand is always increasing. In fact, the lower your wage, the more motivated you are to go back to school. Since the demand will continue to rise, so will the price of education...though wages are not rising to match.

On a side note: what's really happening is that wages are falling but debt is rising. Credit is easier and easier to get. Our economy is fueled by debt, which causes it to expand further, requiring more debt to feed it. $250,000 dollars for a home...$50,000 for an education...$30,000 dollars for a car. Joe Blow consumer says, "Man, that's a load. I am really stressed out. I know how I can make myself feel better! How about $2000 for a TV? What's 2000 bucks when I owe as much as I do?"




*The other reason for the birth of unions was the appalling conditions workers had to endure around the end of the 19th and beginning of the 20th century.




Did you know products in the stores are marked up by as much as 50 percent or more? A sale is really not a sale its just where the price should have started to begin with. ha ha



That's not uncommon at all. Here's my favorite: sales at retail stores. Mark an item up 40 to 60%, then put it on "sale" for 15% off. Customers think they getting a "good deal." Even better: clearance sales. Clearance is 40 to 50 percent off...but the item was marked up over that, so they still make a profit while convincing the customer that they are taking a loss.

Yep, retail stores make hundreds of millions by cheating customers and paying obscenely low wages and little or no health benefits. Makes you want to hit Target and rack up the credit card, eh? :thumbsup: :flowers:

Edited by locally pwned, 27 January 2007 - 01:01 AM.

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#6 MaraM

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Posted 27 January 2007 - 06:58 PM

While certainly not true for many or even most who worked for minimum wage, perhaps the reason many corporations don't feel their staff is "loyal" and doing their very best ever single day is because in our society we often (sadly) gauge our self-worth on wages.

I expect it would be really hard enough surviving on minimum wage, let alone being hugely concerned if the corporation still was showing a profit 10 years down the line.

Prices are so inflated now that often, for the workers and those trying to get by on senior pensions, etc, they simply don't care how they got that high - they just know that somehow it's 'wrong' for a blouse for instance to cost $2.77 to manufacture and sell for retail at $99.95 - while the person making it gets minimum wage and absolutely no fringe benefits.

People deserve to make a 'fair wage for a fair day's work' - really old adage that still stands true today.
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#7 cowsgonemadd3

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Posted 27 January 2007 - 10:10 PM

Yes but what if a good portion of people loose their job because of this and have no money to spend?

I see this raise as good and all I do. I hope people wont loose there jobs and the prices will just go up a little bit but then people have to spend more
and its like a loose loose situation everywhere.

Edited by cowsgonemadd3, 27 January 2007 - 10:11 PM.


#8 HitSquad

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Posted 28 January 2007 - 07:18 AM

The federal minimum wage is strictly a political issue to say "see what we're trying to do for you".
The fact is, during his presidency, Bill Clinton gave states the power to set their minimum wages above the federal level. As of January 1, 2007, 29 states had done so. There is only 1 state (Kansas) that has a minimum wage lower then the federal minimum wage.
The vast majority of minimum wage earners in the U.S. are retail and restaurant workers. Of these, most move on to something else or are in it for spare cash (retiries). No one, including the government, expects anyone to be able to survive on minimum wages nor should you. Ultimetly, your income level lies in your hands

Edited by HitSquad, 28 January 2007 - 07:23 AM.


#9 blueandgold04

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Posted 29 January 2007 - 01:52 PM

while i agree that raising the minimum wage may have a detrimental effect on the small business owner, i cannot substantiate not proceeding with the legislation. the middle class is being efficiently squeezed out of modern america. there must be some actions taken against this.

but don't be mistaken, the economical crunch felt by employers will only be in part a result of the wage increase. the true crippling is performed by our own government. a $2 increase will mean about $320/month for a 40 hr/week employee. but how much of this will they take home to their families? the truth of the matter is that politicians are exacting control over the finances of millions, while illegally "strong-arming" income tax from them. think, how much more money would you have did you not pay income tax? that is the true boa constrictor around the pocketbooks of americans.

if your first reaction to this is anger or disbelief, look into the legality of the federal income tax. only when my government weans itself from the diet of ill-gotten gains from hard-working people, will i listen to their opinion on what is best for the small-business owners and their employees.
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#10 locally pwned

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Posted 29 January 2007 - 03:18 PM

I see this raise as good and all I do. I hope people wont loose there jobs and the prices will just go up a little bit but then people have to spend more
and its like a loose loose situation everywhere.



Compared to rising cost of living, rising interest, and wages that stay frozen for a decade?

if your first reaction to this is anger or disbelief, look into the legality of the federal income tax. only when my government weans itself from the diet of ill-gotten gains from hard-working people, will i listen to their opinion on what is best for the small-business owners and their employees.


Well, it is true that there are arguments against income tax. Classicals for example believe that taxing income is simply punishing hard work. This is especially apparent when overtime comes into play; if you work 50+ hours all year and it pushes you into the next tax bracket, a large portion of that money ends up going straight to the IRS.

Of course, Classicals also claim that progressive tax is unfair; I donít agree with them on that issue (or most issues, for that matter) but that's pretty much a topic in and of itself.

My question for you, bluengold, is what form of taxation would you prefer in it's place?

States use property tax...which I find to be even more unfair than income tax in may ways. For one, the elderly who own homes are often on fixed budgets...in other words they are house rich but income poor. So raising taxes on their property (which they have often worked their entire lives to pay off) places a new burden on their cash flow which is already too small as it is.

What about sales tax? Luxury tax? Transaction taxes? Gas tax? Ect, ect.

Edited by locally pwned, 29 January 2007 - 03:19 PM.

"The whole of science is nothing more than a refinement of everyday thinking." - Albert Einstein

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"If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands." - Douglas Adams

#11 blueandgold04

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Posted 30 January 2007 - 03:07 PM

i am calling into question the legality of the federal income tax. it is not legal. the 16th amendment granted no new rights of taxation to the federal government, this has been upheld in federal court.

don't be misled, the federal income tax does not contribute substantially to our infrastructure within the country. after WW1 the federal reserve was created and the gold standard was thrown away. the federal reserve is owned by a collection of private bankers who are contracted by the government to produce our money. and they charge interest on that money. the lion's share of your income tax is dedicated to the payment of that interest. the control of our national currency is in the hands of international cooporations, subsidized by your money.

so when i am asked about where the money should then come from, i have to ask; where is it coming from now? because our roads, schools, hospitals, etc. are not being supported by the federal income tax.

state income and property taxes are supporting, in majority such programs. also vehicle registration, gas tax (determined by the state), legal gambling revenue, etc...

but people have been programmed to conform, myself included. there is also a certain fear involved, i fear unjustified imprisonment. "necessity is the mother of invention", the system will not change unless acted on by an outside force. perhaps the mass waste that is consistent with government would disspate if they had only enough to get by.
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#12 cowsgonemadd3

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Posted 30 January 2007 - 11:05 PM

Live in the shoes of the people?

Yes if they had BUDGETS they would understand. Sure they have some sort of a budget which includes filling in a pot hole for 1.2 million, woops it really only cost 20 bucks the rest was for there pockets.

#13 frankie12

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Posted 02 February 2007 - 04:59 PM

I think that it should be raised up in the $7 dollar range (which it is in Michigan) because $5 is not enough.

#14 BlackSpyder

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Posted 02 February 2007 - 06:28 PM

Ok lets all do the math the formula is simple

W x Hw x 52 = GP
W=wages
Hw=hours worked
52=# of weeks in a year
Gp= Gross Pay

$5.50 @ 40 h/w (minimum wage full time job)

(5.5 x 40 x 52)= $11,440

Divide that by 52 to get the weekly income before taxes
(11440 / 52)= $220

Figure a tank of gas a week @ $20

$200 left

average rent/morgage is about $600 per month or $150 per week

Down to $50

hope you like ramen noodles cuz after the electric bill and uncle sam you dont have much left to eat on


Now the proposed new minimum wage

(7.5 x 40 x 52) = 15600 gross yearly or 300 per week

300 - 20(gas) - 150 = $130 huh thats almost enough to live on

as for employers most are making more off of those employees then they will ever admit

take a truck dealership that pays the mechanic $20 an hour and bills $80 an hour the mechanic's labor just paid for 4 other employees wages (the sevice writer and shop forman and 2 tire changers) figure that most shops have multiple (4+) mechanics. average 60 hrs of bill time a week and 40 hours of pay time a week per mechanic. the money goes in someones pockets

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#15 jgweed

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Posted 02 February 2007 - 06:45 PM

Increasing wages for whatever reason for a particular group will increase the spending/saving power of that group, and this filters into the economy and can actually create more jobs (for another group) than the few lost by the increase.
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