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Minimum Wage

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SASH

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The problem with minimum wage is that there are alot of people out in the workforce who aren't worth that much.
 

agman

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Maple Leaf Angus said:
I don't believe in minimum wage. Do you?

I do believe in the minimum wage. In fact, I believe it should be raised. Remember, that people in that income strata spend virtually every dime. They are eager to move up the protein ladder on which beef is perched at the top. If there is no income there is NO BEEF. Increasing real incomes at the the lowest income strata was paramount in stemming the decline in beef demand in the late 1990's after 19 years of decline.
 

SASH

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The problem with increasing minimum wage is that it is directly inflationary. Costs for materials and labor are usually marked up on a percentage basis so increasing wages just makes goods and services more expensive lowering everyone's standard of living.
 

Jinglebob

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I wish I could get minimum wage! :lol:

Seriously, I don't see it as good or bad. It depends on the situation. If we get "verticaly integrated" down the road, it might be nice to have a minimum wage garauntee to save our butts from the big conglomerates. But I really don't see that coming to pass.

Why would some big corporation want to own all of cattle country and pay more than they are now, on the average. How many of you would do what you do, for the same amount of money, if you had to work for somone else?

We think we are our own bosses, so we work for less in the hopes that we will come out ahead in the long run and have something to pass down to the next generation.

But then I don't know of anyone who is forced to ranch. Nobody held a gun to my head and told me I had to do what I am doing. How about you?
 

Maple Leaf Angus

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agman said:
I do believe in the minimum wage. In fact, I believe it should be raised.

Agman, you are my HEro. If the minimum wage was raised, i would believe in it, too. especially if it was compulsory for farmers to receive it as well as pay it. you see, that way i could actually make a living selling my product.


Trick question! :lol: :lol: :lol:
 

agman

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SASH said:
The problem with increasing minimum wage is that it is directly inflationary. Costs for materials and labor are usually marked up on a percentage basis so increasing wages just makes goods and services more expensive lowering everyone's standard of living.

Inflation declined following the last minimum wage increase. How do you figure? Do you think that perhaps productivity increases sufficiently to offset the the direct impact of increased wages?
 

SASH

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agman said:
SASH said:
The problem with increasing minimum wage is that it is directly inflationary. Costs for materials and labor are usually marked up on a percentage basis so increasing wages just makes goods and services more expensive lowering everyone's standard of living.

Inflation declined following the last minimum wage increase. How do you figure? Do you think that perhaps productivity increases sufficiently to offset the the direct impact of increased wages?

So prices went down after the last minimum wage increase. I don't think so. How long of a period after are you talking about? It takes awhile for those increases to be reflected due to existing inventories.
 

agman

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Sash:So prices went down after the last minimum wage increase. I don't think so. How long of a period after are you talking about? It takes awhile for those increases to be reflected due to existing inventories.[/quote]

Response: You said increased minimum wages was inflationary. I said empirical evidence does not support your view. We have had three minimum wage increases since 1990. Not one caused inflation to increase. I believe 15 years is enough time for the impact of higher wages to filter though the system, don't you? You did not answer my point on productivity gains - why? Productivity gains can offset the cost of wage increases. You also failed to address the real benefit to agriculture of a minumum wage increase.
 

Sandhusker

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agman said:
Maple Leaf Angus said:
I don't believe in minimum wage. Do you?

I do believe in the minimum wage. In fact, I believe it should be raised. Remember, that people in that income strata spend virtually every dime. They are eager to move up the protein ladder on which beef is perched at the top. If there is no income there is NO BEEF. Increasing real incomes at the the lowest income strata was paramount in stemming the decline in beef demand in the late 1990's after 19 years of decline.

Damn, I agree with Agman. :shock: I hate it when that happens :wink:
 

Cal

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I don't believe it would be a bad thing to consider a minimum wage exemption for younger laborers, who are in essence only gaining work experience, earning extra spending money, and are primarily dependant on family for food, shelter, and necessities. An exemption would allow businesses to budget for a larger number of younger employees to gain entry level work experience.
 

mrj

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Agman wrote:

I do believe in the minimum wage. In fact, I believe it should be raised. Remember, that people in that income strata spend virtually every dime. They are eager to move up the protein ladder on which beef is perched at the top. If there is no income there is NO BEEF. Increasing real incomes at the the lowest income strata was paramount in stemming the decline in beef demand in the late 1990's after 19 years of decline.[/quote]

Agman, isn't the purpose of the minimum wage supposed to be as an entry level wage?

It seems to me if it is too high, that will discourage hiring people who are maybe lacking in skills and need "practice" so to speak.

Or those who are simply not capable or willing to do the work in a way that makes them a valued employee at the wage that is required.

I can see your point, by worry about the downside, too.

What if an employee can't generate the income for the company to cover their own wage?Paying eveyone a "living wage" is a nice idea, but not every employee can do an adequate job to pay their way in that scenario, IMO.

MRJ
 

agman

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MRJ said:
Agman, isn't the purpose of the minimum wage supposed to be as an entry level wage?

It seems to me if it is too high, that will discourage hiring people who are maybe lacking in skills and need "practice" so to speak.

Or those who are simply not capable or willing to do the work in a way that makes them a valued employee at the wage that is required.

I can see your point, by worry about the downside, too.

What if an employee can't generate the income for the company to cover their own wage?Paying eveyone a "living wage" is a nice idea, but not every employee can do an adequate job to pay their way in that scenario, IMO.

You are correct, the minimum wage is just a starting point. If you only looked at the cost side of the ledger I would agree with you. But the benefits on the demand side are a multiple of the wage increase as the derived profits recirculate throughout the economy. Have a great day.

MRJ
 

Denny

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Around here I would like to hire some help for minimum wage or even more but for $10.00 an hour the only help you can get cost you the $10.00 and only generates $5.00 worth of work most kids now days think they need $10.00 an hr. to start and they are all handicapped 1 hand to work with the other to hold their soda pop.
I have a friend here who has a concrete business the new helpers start at $15 an hr. the block layers he has are paid $65,000 a year salary 5 day work weeks mid march till mid december. they start at 6 am and usally work till 8 or 9 pm rain days off.
 

Murgen

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I wouldn't mind hiring people for minimum wage, if willing to work. What grinds my butt is people who collect welfare for no work. Have some classes of jobs for welfare.

Stone picking doesn't take that many brains the last I checked. "But we'll be putting people out of work that want to work", bull crap.
:shock:
 

SASH

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agman said:
.
Sash:So prices went down after the last minimum wage increase. I don't think so. How long of a period after are you talking about? It takes awhile for those increases to be reflected due to existing inventories.

Response: You said increased minimum wages was inflationary. I said empirical evidence does not support your view. We have had three minimum wage increases since 1990. Not one caused inflation to increase. I believe 15 years is enough time for the impact of higher wages to filter though the system, don't you? You did not answer my point on productivity gains - why? Productivity gains can offset the cost of wage increases. You also failed to address the real benefit to agriculture of a minumum wage increase.

This should be intuitive for you. If I raise minimum wage from 7.00/hr to 7.25/hr and the person doing that job is producing 5 units of production per hour, the increase in cost is 5 cents per unit plus markup (say 20%) = 6 cents per unit. Of course it is not the only thing that affects inflation. Now, if I understand you correctly, by the term productivity gains, you mean that this person may produce another half unit of production per hour for this additional 25 cents. Even if that happened in the short term, I doubt it would be sustainable. These are minimum wage employees not management material.[/quote]
 

Mike

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The Economic Effects of Minimum-Wage Laws

Simply stated, if the government coercively raises the price of some good (such as labor) above its market value, the demand for that good will fall, and some of the supply will become "disemployed." Unfortunately, in the case of minimum wages, the disemployed goods are human beings. The worker who is not quite worth the newly imposed price loses out. Typically, the losers include young workers who have too little experience to be worth the new minimum and marginal workers who, for whatever reason, cannot produce very much. First and foremost, minimum-wage legislation hurts the least employable by making them unemployable, in effect pricing them out of the market.

An individual will not be hired at $5.05 an hour if an employer feels that he is unlikely to produce at least that much value for the firm. This is common business sense. Thus, individuals whom employers perceive to be incapable of producing value at the arbitrarily set minimum rate are not hired at all, and people who could have been employed at market wages are put on the street.

Some opponents of the minimum wage argue that it aggravates inflation by pushing up the costs of individual businesses. [4] Those businesses, unwilling or unable to absorb such costs, pass them on to consumers in the form of higher prices. In this view, any artificial increase in labor costs can produce so-called cost-push inflation.

There are several problems with the notion of cost-push inflation. The primary error in this analysis is that it confuses a shift in the structure of relative prices with a general rise in the level of prices. If the labor costs of businesses are increased and they succeed in passing on the costs to consumers in the form of higher prices, they will have managed to change the structure of relative prices at the expense of businesses that are unable to raise their prices because of more-intense competition. This is quite distinct from a general increase in the level of prices, which would be possible only if the real supply of money was increased.

Many firms, however, may be unable to pass on their increased costs to consumers. It is consumers who ultimately determine the price of any good on the market, and they may decide that a business's product is not worth a higher price. Producers cannot force consumers to buy what they produce, and businesses cannot always arbitrarily increase the prices of their products simply because the government has arbitrarily increased their costs.

This fact has important implications. If a business cannot simply pass along its new labor costs, it must somehow absorb them--by eliminating workers rendered unproductive by the new minimum wage, by replacing labor with more-productive machines, or by cutting back production. Those jobs not eliminated will be more demanding, as employers will use fewer people to produce the same amount of work.

Teenagers suffer most from the adjustments required by an increase in the minimum-wage rate. These workers are generally the least experienced, least skilled, and least productive. According to the Bureau of Labor Statistics, the present unemployment rate for all teenagers actively seeking jobs is 16.5 percent, and the unemployment rate for black teenagers is 36.9 percent, more than double the overall average.[5] The existing minimum wage has contributed significantly to producing these abhorrent levels of unemployment.

The damage done to teenagers is twofold. First, they lose income immediately. Second, because minimum-wage legislation has rendered them unemployable, teenagers cannot gain the ex- perience and skills that would make them employable at higher wages later. If there were no floor price on labor, teenagers could offer to work for a lower price until they had gained the training, experience, and skills they needed to command a higher wage.

The damage done to minority teenagers is far worse. By establishing an arbitrary minimum, government reduces the costs of discrimination. In The State against Blacks, economist Walter Williams described how minimum-wage legislation alters the incentives of employers:

Suppose that an employer has a preference for white employees over black employees. And for expository simplicity, assume the employees from which he chooses are identical in terms of productivity. If there is a law, such as the minimum wage law, that requires that employers pay the same wage no matter who is hired, what are his incentives? His incentives are [those] of preference indulgence. He must pay the black $3.35 an hour and he must pay the white $3.35 an hour. He must find some basis for choice. The minimum wage law says that his choice will not be based on economic criteria. Therefore, it must be based on noneconomic criteria. If he wishes, the employer can discriminate against the black worker at zero cost.[6]

Because no one is allowed to work for less than a set minimum, those who can command only the minimum and are discriminated against have no way to fight the problem. If wages were not fixed at a certain minimum, those who were discriminated against could compensate by offering their labor at a cheaper price. This would effectively increase the costs of discrimination for those employers who wished to practice it.

Many proponents of higher minimum-wage rates insist that the teenager and minority argument is bogus. Minimum-wage legislation, they claim, is primarily intended to help adults trying to support a family. The minimum-wage earner trying to make ends meet with an annual income of $6,968 and three or four mouths to feed is often used as an example.

A cursory study of demographic statistics suggests that this example does not accurately reflect the minimum-wage-earning population. According to the Census Bureau's "Current Population Survey," over 76 percent of all minimum-wage earners are not heads of households. Furthermore, the Bureau of Labor Statistics found that only 2.2 percent of working adults are earning the minimum waqe.

But what about those who are actually struggling to live on the bottom rung of the economic ladder? Is the government helping them by arbitrarily establishing the minimum living wage? As noted earlier, government cannot create wealth simply by passing laws. Such laws succeed only in redistributing the existing wealth of society. The distortions caused by fixing the price of labor produce definite losers and winners; it is the least employable, the truly needy, who lose their jobs, and the winners either earn wages above the new fixed price or have protected jobs.

Minimum-wage legislation fosters economic inequalities by creating a gap in the economic ladder: those on the bottom rung are kicked off, but those on higher rungs climb up. By no means are such government-created inequalities fair or just.
 

Soapweed

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Mike, I appreciate your posting the article of "The Economic Effects of Minimum-Wage Laws". I don't know if you wrote this, or if someone else did, but it is good and true.

For those wanting to raise the minimum wage, if a little is good a lot should be better, right? Instead of raising the minimum wage to $7.00 per hour, wouldn't it be better to raise it to $10.00. Then the benefits would be even greater, wouldn't they? Unfortunately, real life doesn't work this way.

For this reason, I would be in favor of having absolutely no minimum wage, period. Let free enterprise take its course. The less laws, the better. If some kid wanted to pick up tree branches for a dollar an hour, give them the job. It would keep them off the streets and away from a life of crime. They would make enough money to buy candy. Then they would get cavities, and their parents could pay for the services of a dentist. The dentist having money in his pockets would buy a new car. The wheels of commerce would keep turning, and it all started by giving the kid a mediocre job for lousy pay. The kid not only earned lousy pay, but also self respect and a good work ethic. America became better because of it.

This is a far better approach than a parent giving the kid candy money for nothing, or worse yet, a government giving out welfare money for nothing. The government arbitrarily forcing employers to give employees extra pay for no extra work has the same negative effect that always happens when people get something for nothing. Bribes have never worked, and loyalty cannot be bought. It is not true loyalty.
 

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