Help me answer this republican assertion

[southpaw]

I'm having an e-mail exchange with a republican friend concerning our outlook and expectations for the next 4 years. He is not looking for much, but feared a Kerry administration for several reasons. Mostly business related. I've been able to stay in the debate pretty well up to this point, but he just threw this at me:

One point in particular, raising the minimum wage to $7 per hour, scared me to death. That would, in my opinion would cost jobs and increase the cost of goods and services. More unemployed to purchase more expensive stuff doesn't get it done.

I'm eager to respond to this assertion, but such things are not my strong suit. I tend to look at increased minimum wage with regard to its effect on the ability of the worker to maintain at least a minimum standard of living. My friend obviously looks at how it affects the employer.

Help me refute or, at least, provide a different angle to the minimum wage issue.

[shaolinmonkey]

1. I think many employers can afford it.

Especially the big ones. Pay your executives less. How many SUVs and boats doesn one person need?

[LisaLynne]

2. That's a stupid argument.

We're not talking about people being able to buy more expensive stuff (which would actually "cut it" anyway), but people being able to live on the wages they make. Corporations have, for a long time, felt that any money spent in wages is basically lost, but they need people to do the work so until we return to slavery, they're going to have to pay something. Look at Nokia. Yeah, they're not in this country, but they have built a strong company paying really good wages.

This "the less you pay the better" attitude is immoral and just plain stupid.

[auburngrad82]

3. One of the reasons the economy hasn't grown during this term

is trickle down economics just doesn't work. The companies and individuals that got the tax breaks are not hiring new workers or investing the money in expanding their businesses. Take the company I work for as an example. When I started here in 2000 we had over 100 employees. We now have about 30. There is no plan to expand the work force. Our labor costs are greatly reduced and the profit margin has greatly expanded.

On the other hand, the employee's (mine) insurance costs have increased about 25% in the last year. Also, due to higher gasoline costs, it is more expensive for the employees just to get to work. It costs me about $3.00 more per day to come to work and to go home.

An increase in the minimum wage would basically force the trickle down effect. Some of the money that companies are keeping to pad their profit margin would go to the lower levels of the economy (the workers) and they in turn would spend it on food, gas, clothing, etc. The money would come back to the government in the form of increased tax revenue and back to the businesses in the form of increased sales. That was part of the reason the economy did so well during Clinton's terms. The trickle/down policies of Reagan/Bush were replaced by invest and spend policies of the Clinton administration. And the economy boomed.

By the way, invest and spend doesn't mean the government is spending all the money. Clinton's federal government was smaller than Reagan's or GHW Bush or GW Bush's governments. GW Bush presides over the largest government not just American history, but the largest government ever.

[Romberry]

4. Hit him with history

Every time there has been an increase in the minimum wage the Republicans have predicted it would cost jobs and lead to an inflationary spiral. It has never happened. In fact, just the opposite has happened. By increasing the income of the poor (rather than increasing the wealth of the few) you add to broad-based consumerism. The people on the bottom who get these few extra pennies spend it. They spend it on housing and groceries and entertainment and health care. You grow the economy by spreading wealth. The minimum wage has gone done by close to 40% in terms of real inflation adjusted dollars while executive compensation has soared into orbit.

What good are jobs if working full time is not enough to even live in poverty? Why does the simple human dignity that is supposed to come from work not include the ability to put a roof over your head and feed your family?

Increasing the minimum wage may in fact hurt some rather marginal businesses which are right on the edge. The growth that comes elsewhere from the additional money in the pockets of those who need it most will more than make up for it.

Bottom line: Tell your friend to take a look at the past increases in the minimum wage and find definitive proof of substantial increases in unemployment or inflation as a result. He can't because it just isn't there.

[Strawman]

5. Real wages have been basically flat for 30 years

For 4/5 of the population. I think they can afford it. We have been increasing the wages of executives and CEO's exponentially, some legal mechanism forcing companies to share some small portion of those profits with their low wage workers is probably necessary because the market isn't doing it. The minimum wage would need to be increased to something like $10/hr to reach it's highest point in real dollars. If Kerry was proposing raising it to $10-11/hr, then maybe there's at least room for a debate, but $7 would have little negative macroeconomic impact. And you can be sure that every last dollar would sure make a hell of alot of difference to the folks trying to exist on those wages. Tell your friend to be reasonable and stop being such a greedy bastard.

There's probably some good stats easily available online to back this up, the ones I'm giving you are rough ones from my memory. Google Robert Pollin. He wrote an excellent book on this and other economic issues called Contours of Descent.

[southpaw]

6. Thanks to all...

I see my argument taking shape...

Any other input?

[Dogmudgeon]

7. Look at the history

Every increase in the Minimum Wage was followed by an increase in consumer spending, a business expansion, and overall capital growth.

This is public knowlege and need not be subject to a winger "debate".

There's really only one reason why anyone would oppose carefully measured, consistent increases in the Minimum Wage: they don't like people who are at the bottom of the economic ladder, and wish to see them suffer.

--bkl

[jdj]

8. Kerry was going to give tax incentive to businesses to stay in

this country and raise taxes on those that go overseas to do business. I think that would pay for the min. wage increase.

7 fucking dollars an hour. I know what I would tell your friend.

[Union Thug]

9. Check out the conceptual guerilla

I'm not sure this particular link within his site answers that exact question, but there's always something good here:

http://www.conceptualguerilla.com/wagesandresponsibility.htm

Furthermore, demand drives the economy. So long as people can't pay the bills, there is no demand except for the most basic requirements of living. This country was most successful when the rich were paying 80% in taxes and the working class had organized into powerful unions and were making livable incomes. That's a fact.

[gavodotcom]

10. Unemployment and minimum wage.

First of all, say that the minimum wage is at one of the lowest real values since it's inception, and that the economy has been able to grow remarkably strong with a higher real minimum wage.

a rise in minimum wage hits teenagers disproportionately. These are the same people, who, as a bloc, still live with their parents, anyway.

Those who do live on their own with a raised minimum wage have more money for things outside of rent and car payments, which creates an excess demand for consumption, which stimulates the economy.

Furthermore, the vast majority of people don't work for minimum wage. A 10% change in the minimum wage would affect about 7% of jobs, and of this labor force, it would raise the minium wage 1/2% of a percentage point.

Here's a decent article: http://www.swlearning.com/economics/policy_debates/increase_minimum.html
<snip>
Our findings suggest that the efficiency aspects of a modest rise in the minimum wage are overstated.... e find no evidence for a large negative employment effect of higher minimum wages. Even in the earlier literature, however, the magnitude of the predicted employment losses from a much higher minimum wage would be small: the evidence at hand is relevant only for a moderate range of minimum wages, such as those that prevailed in the U.S. labor market during the past few decades. Within this range, however, there is little reason to believe that increases in the minimum wage will generate large employment losses.
~David Card and Alan B. Krueger, Myth and Measurement: The New Economics of the Minimum Wage, (Princeton: Princeton University Press, 1995, p. 393).
</snip>

[snippy]

11. Point out that when the labor market is strong enough to demand

higher wages, the federal government, through the Federal Reserve, takes action to slow the economy and weaken the labor market. If the government is going to intervene in the free market and prevent higher wages as a result of the labor market being too strong, it has a moral obligation to prevent the exploitation of the lowest paid workers.

Another point to make is that a higher minimum wage helps the lowest paid workers avoid having to rely on social safety net programs which are paid for by the tax payers. Helping to keep people from needing to rely on safety net programs also is an obligation of the government.

These two facts usually cause decent republicans to look at the minimum wage a little differently.

[sandnsea]

12. 500x increase in CEO income

That doesn't increase costs at all, or the increase in stockholders income either. :eyes: Why is a house built by illegal labor the same price as a house built by legal laborers? Prices are set by what people are able to pay and cost has much less to do with it these days. They jack up the price as high as they can and stockholders & CEO's walk away with the profit and fuck the worker every time. That's what they did before we had labor laws and that's what they're doing now.

Besides, how is it that Florida supposedly went Bush AND voted in a $6.00 minimum wage.

People are just fucking stupid.

[GiovanniC]

13. Ask Him to Live on a $5.15 an Hour Salary for Two Months

Tell him to not access any savings or anything like that. Start from scratch, and live off a $5.15 an hour salary for two months.

Then ask him if he thinks a $7.00 an hour minimum wage is unreasonable.

5.15 x 40 = $206 / week GROSS
$206 x 4.3 = $886 / month GROSS

[cheezus]

14. if he cares more about profit than people living in poverty fuck him

smug pricks who think they DESERVE the silver spoons in their mouthes that they were born with.