Does The Minimum Wage Prevent Poverty?

[GURPS]

PragerU Video: Does The Minimum Wage Prevent Poverty?





In fact, raising the minimum wage is economically detrimental. Basic economic knowledge states that wages are the cost of labor, meaning that if you artificially force wages upward then businesses are going to have to find a way to offset that cost, whether it's through higher prices, fewer benefits or hours or laying off workers altogether.

Under a free market economy, businesses have to compete for the best workers available, which is why they are compelled to offer wage and benefits to the employee's satisfaction. If the employee doesn't feel like they're being fully compensated for their talents and experience, then they can either not take the job or leave their job for another one that offers better compensation.

It's the workers and the consumers who in the end are harmed by the minimum wage, which only exacerbates the issue of poverty, not solve it. That's why, as economist David Henderson argued in a 2014 PragerU video, the actual minimum wage should be zero (video below):

 

[tommyjo]

Why is it that you still don't understand this stuff??? Why is it that English still throws you for such a loop?

The answer to the title of your post is obviously no. A minimum wage is not a tool to "prevent poverty". Nothing will prevent poverty. We are dealing with humans...who are just as apt to be greedy, lying cheats as they are apt to be lazy, useless sloths. If we started all over tomorrow by creating a system where everyone received an equal share of economic output...or if the government confiscated every possession of every citizen...in a couple of years there would be people with larger amounts of wealth and people with none...they would just be different people. (Donald Trump wouldn't be one...but Mark Zuckerberg might be.)

So here is the text from the PragerU speech you reference:

When the minimum wage rises, employers will adjust. They will use less labor. They’ll fire current employees or cut back on their hours. They will also raise prices for their goods or
services. These are undesirable consequences.

What is wrong with these comments? First, SOME businesses MAY use less labor. ALL businesses WON'T. A retail establishment that is open from 9am-9pm will still be open those same hours...they will still need to staff that location. Will MCDonald's bring in robot hamburger makers? Maybe...but (and here is the part you and yours fail to understand) businesses are doing that regardless of the level of wages.

Second, rising prices is good for an economy. Rising prices are needed for economic growth. (This is also "basic economic knowledge"). It is the level of rising prices that are an issue...inflation is a problem when it is too low and when it is too high. (I know...you don't understand....)

More from the transcript:

But let’s also consider another bad effect Businesses will hire fewer workers, especially those with little or no job experience. Suppose you’re young and haven’t worked many jobs before. Maybe you’ve never had a job and are trying to land your first one. The work you can offer an employer may be worth only, say, $7 an hour. You agree. He agrees. And you have your first job.But what if the minimum wage set by the government is higher than $7? What if it’s $10 or more? Well, you won’t get the job. You may be willing to work for $7 an hour, but under
minimum wage laws, it would be illegal for you to do so.

What is the problem with this point? The same point made above...inflation. $7 an hour doesn't buy the amount of labor in 2017 that it did in 1999. IF we are to have a minimum wage it should rise in conjuction with the overall rise in prices in the general economy (just like Hijinx gets a COLA on his SS). The owner of that business has been raising prices all along but has not had to pay his workers an extra penny.

Next section:

It’s true that the government can force business owners to pay its minimum wage workers more per hour, but it can’t force these business owners to pay them more per week. According
to the Los Angeles Times, after Connecticut raised its minimum wage to $10.10 an hour, a 20 year old woman who worked at a donut shop in Hartford was soon disappointed when her
hours were cut from 35 per week to 27.

Here is the rather stupid portion of this: assuming that donut shop was still open....someone got paid to work those 12 hours.

More important to all of this are some simple basic facts...there are people all over this country working at the minimum wage. The minimum wage will not now or ever "eliminate poverty" (it will reduce the likelihood that employers will abuse or take advantage of low skilled workers). The problem with the minimum wage are the ones everyone knows: 1. we really need a "training wage"....your professor only notes the new worker in his examples...we could easily develop a lower wage for that HS summer worker. 2. the minimum wage should have a low base and "locality factors" that increase the min wage in higher cost of living areas.

Should the minimum wage be zero? In a perfect world, yes. Do we live in a perfect world where ALL employers pay ALL employees fairly? Not even close.

 

[PsyOps]

Why is it that you still don't understand this stuff??? Why is it that English still throws you for such a loop?

Oh superior one of intellect... It's the title of someone else's article. GURPS is posting the article title verbatim.

Verbatim: in exactly the same words as were used originally

What that means is, GURPS is just conveying a message from someone else. It is not meant to be taken as his own words.

Now, you being of superior intellect... you are capable of understanding this aren't you? Or are you just a moron like the rest of us?

 

[SamSpade]

It does seem to me however, that every bleeding heart liberal who cries for an increase in minimum wage argues EXACTLY that - that it needs to be a living wage, a wage that an earner can actually live on - AND that if you oppose it, you don't care about the poor. Obama even proposed raising the minimum wage because "no one should have to live in poverty". THAT *is* the argument.

Now - the data itself doesn't support this idea. While minimum wage is normal for fast-food franchises and retail, a small fraction of the workforce actually makes the federal minimum wage.
People only continue to earn minimum wage for a short time. Measuring who is getting the minimum wage needs to be gauged against that - we don't assume that children stay in grade school for twenty years because the number of students doesn't vary - they're different students. The demographics of minimum wage earners are teenagers and college age students - and a small portion of elderly who do it for the extra money (and - if it were me - a chance to move around and actually do something to not be bored). This population is fluid.

As people on here have observed - if you're STILL earning only minimum wage after a long time - your problem isn't your pay.

So - something like 4-5% of all workers work the minimum wage - or less. Half of those are essentially - kids. Teenagers and college aged kids.
Two thirds of minimum wage workers work *part-time*. (So, if they're struggling to lift themselves out of poverty, that wouldn't be the way to do it.)
Almost HALF - are in the South (not really germane to the discussion - but interesting).

So at very worst - you have what, perhaps a half million persons at most who might be struggling to make ends meet on minimum wage? Almost certainly less, because after a year, they really shouldn't be, under any circumstances? And if they are in fact, poor, don't they have MANY other options?

Truth be told - if someone languishes in minimum wage for years because of a lack of marketable skills - raising the wage by a lot makes them much less employable.

 

[Gilligan]

Oh superior one of intellect... It's the title of someone else's article. GURPS is posting the article title verbatim.

Verbatim: in exactly the same words as were used originally

What that means is, GURPS is just conveying a message from someone else. It is not meant to be taken as his own words.

Now, you being of superior intellect... you are capable of understanding this aren't you? Or are you just a moron like the rest of us?

You might as well be talking to a stone.

 

[vraiblonde]

Minimum wage is just another political tool. The Dems trot it out there because they know their voters are too dumb to understand how the economy works. All the progs see is "mo' money " They think it's free - that the Dems want to give them some free money and the Republicans don't.

 

[Hijinx]

It does seem to me however, that every bleeding heart liberal who cries for an increase in minimum wage argues EXACTLY that - that it needs to be a living wage, a wage that an earner can actually live on - AND that if you oppose it, you don't care about the poor. Obama even proposed raising the minimum wage because "no one should have to live in poverty". THAT *is* the argument.

Now - the data itself doesn't support this idea. While minimum wage is normal for fast-food franchises and retail, a small fraction of the workforce actually makes the federal minimum wage.
People only continue to earn minimum wage for a short time. Measuring who is getting the minimum wage needs to be gauged against that - we don't assume that children stay in grade school for twenty years because the number of students doesn't vary - they're different students. The demographics of minimum wage earners are teenagers and college age students - and a small portion of elderly who do it for the extra money (and - if it were me - a chance to move around and actually do something to not be bored). This population is fluid.

As people on here have observed - if you're STILL earning only minimum wage after a long time - your problem isn't your pay.

So - something like 4-5% of all workers work the minimum wage - or less. Half of those are essentially - kids. Teenagers and college aged kids.
Two thirds of minimum wage workers work *part-time*. (So, if they're struggling to lift themselves out of poverty, that wouldn't be the way to do it.)
Almost HALF - are in the South (not really germane to the discussion - but interesting).

So at very worst - you have what, perhaps a half million persons at most who might be struggling to make ends meet on minimum wage? Almost certainly less, because after a year, they really shouldn't be, under any circumstances? And if they are in fact, poor, don't they have MANY other options?

Truth be told - if someone languishes in minimum wage for years because of a lack of marketable skills - raising the wage by a lot makes them much less employable.

^^^^^^___________________^^^^^^^^^^^^^___________^^^^^^^^^^^^^

 

[GURPS]

Second, rising prices is good for an economy. Rising prices are needed for economic growth. (This is also "basic economic knowledge"). It is the level of rising prices that are an issue...inflation is a problem when it is too low and when it is too high. (I know...you don't understand....)

someone care to explain how rising prices is a GOOD Thing ?

 

[Wishbone]

... Or are you just a moron like the rest of us?

Nah.... She's a VERY SPECIAL kind of moron.

 

[PsyOps]

someone care to explain how rising prices is a GOOD Thing ?

Ummmm... the wealthy. Cut out the middle class and poor so only the wealthy can afford it. Liberals are quite covert in their desire to keep the poor... poor... and dependent.

 

[SamSpade]

someone care to explain how rising prices is a GOOD Thing ?

I sure don't. Only that positive inflation is better than negative inflation.

My dad used to point out to me that where he had worked many years - manufacturing televisions, before he moved on to other things - the price of televisions had plummeted, at least in constant dollars. And the TV you GET - is better. Far better. He asked me "do you know what we paid for the TV we had in (city when I was 6 years old)?". I said 600 bucks - he was surprised, but answered that's right. I remember - it was an RCA in a wooden console - color, our first color TV - and I'd guess probably no more than a 20 inch screen.

Any calculator conversion for 1966 to today would show - in today's dollars, THOUSANDS. That was an expensive TV.

So due to improvements in design and productivity - the price went DOWN. A lot.
Same with computers. My first computer was an IBM XT. Color monitor. A whopping 10 meg hard drive.
5 thousand. Which was why the entire office only had a few.

It seems to me that many things SHOULD cost less, over time.

 

[GURPS]

My dad used to point out to me that where he had worked many years - manufacturing televisions, before he moved on to other things - the price of televisions had plummeted, at least in constant dollars.

Mom bought the 1st Apple Macintosh [A Mac 512] in 1987 for $ 5000 [ish] .... today you can even a Mac for $ 500 - $1500
[yes the iMac or Mac pro is still 2500 or more]

 

[Toxick]

I think we should raise minimum wage to 300K per year!
That way everyone will be rich!

The fact that this hasn't happened yet only serves to underscore how racist and sexist the USA is.


Choke on that 1%ers!

 

[Gilligan]

Toxick for Emperor!

 

[Toxick]

Toxick for Emperor!

If I was Emperor, during my reign, I would called Toxick the Terrible, or Toxick the Bloodthirsty, or Toxick the Mother ####ing Antichrist - but a century or two down the line, they'd call me Toxick the Great.


The seas would immediately run red with the blood of Those Who Deserved Everything They Got. But after the transition, Lasting Utopia would spring eternal.

 

[This_person]

If I was Emperor, during my reign, I would called Toxick the Terrible, or Toxick the Bloodthirsty, or Toxick the Mother ####ing Antichrist - but a century or two down the line, they'd call me Toxick the Great.


The seas would immediately run red with the blood of Those Who Deserved Everything They Got. But after the transition, Lasting Utopia would spring eternal.

 

[GURPS]

.... assuming that donut shop was still open....someone got paid to work those 12 hours.

it wasn't the woman getting 27 hours instead of 35 .... maybe the OWNER worked the extra hours

 

[GURPS]

.... Lasting Utopia would spring eternal.

Utopia Greek for NO Place

 

[Toxick]

Utopia Greek for NO Place

Well, in English, it means paradise.
And it would be.



You know - after a brief transitional period.

I would be the Emperor the world needs AND deserves.

 

[Gilligan]

If I was Emperor, during my reign, I would called Toxick the Terrible, or Toxick the Bloodthirsty, or Toxick the Mother ####ing Antichrist - but a century or two down the line, they'd call me Toxick the Great.


The seas would immediately run red with the blood of Those Who Deserved Everything They Got. But after the transition, Lasting Utopia would spring eternal.

Hey, you already had my vote..er..allegiance...fealty..homage...whatever tf. You didn't hafta pile on.