The KGB Oracle Forums General Public Discussion (SPECIAL ACCESS) KGB Political Debate Central Minimum Wage Increase

"Honestly I am on the fence myself. Depends on how much it inflates,
and harms the relative purchasing power of those in the $10/hr range. "

Good point.

Let's say the wage increases. Now McCorporation has to decide
how much of a hit to profits they want to absorb and how much to
pass on to the end customer.

Shareholders will raise holy hell about anything eating into
their profits, but if they pass the entire cost onto the end
customer, few will be buying a McBurger that has doubled in
price whacking the profit margin anyway.

Hardest hit will be the very folks who would benefit from such
an increase to begin with. If they make slightly more, but the
costs increase slightly more, what have we really done here ?

Derid, have you ever consider that minimum wage could be influenced by something else other than market forces? That is, could you imagine a scenario where something, say a power differential or monopoly of some sorts, could create a situation where highly replaceable worker's wages are suppressed?

Another question, if a market dictates that a worker is paid below level where it is possible to survive (not the same as poverty level) is it society's imperative to intervene?

Last question, do you think that market forces should go beyond determining prosperity and dictate who survives, or stays healthy, or has kids? Lets ignore for a second that social programs exist.

Lets say 100% of minimum wages increase is passed onto consumers. Employment costs in the fast food industry are marginal, so you will never get "double the price" even if you double the minimum wage. Do you think 25c more per burger for paying 12$/hour (it is more like 2-3c per extra $/hour if cost-structure is similar to pizzas) is too much to pay living wage? In other words, are societal benefits of marginal price cuts justify social ills such cuts create?

I don't sometimes understand conservatives. Henry Ford had it right - you pay your workers enough so they can buy your product. Squeezing marginal profit increases out of suppressing minimal wages is social equivalent of toxic waste dumping - it creates a lot of problems downstream.

Let me put it another way that you could probably understand - it is more effective to pay more people who work, then to pay into welfare system that has people that don't work in it.

Considered? Sure. Observed? Nope. Note your own term "highly replaceable". That right there is an indicator that there is too much supply, not enough demand.

You have brought up this concept before, and I confess it is not a factor I can say I observe to a degree that its consideration outweighs other factors. You should probably link me the origin sometime so I can read it myself. I see how someone could come to such a theory, but as of right now I see it as a restatement of the simple too much supply/demand.

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As to your other two questions, I would rather assert that the you are trying to solve the wrong problem. Focusing on side effects of the primary economic problems are temporary fixes.

If it was possible to enact an economic paradigm that would organically result in close to full employment, thereby raising thee value of labor and raising barriers to worker replacement driving wages up - would you say that this is a better or worse solution than stepping in and forcing businesses in a sick economy that they have to pay "x" now minimum per employee?

Its really not that I think people should be poor, or enjoy the poverty of others. I doubt that anyone here feels that way. I do worry that enacting measures that temporarily mask the fundamental problems, and allow society the temporary luxury of procrastinating in dealing with the core issues can be dangerous - even as I worry how effective the temporary measures will even be.

Living in a country with a higher minimum wage, I'm gonna tell from experience what it does: increase the non experienced people unemployment.

No entrepreneur in his right mind would pay a salary to someone who can't produce more than what he is costing. And guess who falls in this category? Young people and people who have to change their line of work due to some sector being rendered useless.
Unless you have a really good education system oriented as to facilitate people's employability, you get more unemployment.

And the more unemployment you get, the less people are willing to try getting a new job, they cling to their current situation. At the end, you get an economy which is slowing.
See the current state of the southern europe states: that's where you're heading if you stay on course for the next 50 years.