Minimum Wage

[bedub1]

Should the US minimum wage be repealed? It has led to the exportation of jobs overseas where wages are lower. It was led to massive illegal immigration by allowing business's to hire illegals and thereby avoid the minimum wage. If there was no minimum wage, no interference in the free market, then the jobs wouldn't have been sent overseas and there would be no motivation to hire illegal immigrants.

[AndyDufresne]

That sounds like a lot of "Ifs" and "Thens".


--Andy

[Timminz]

While we're at it, child labour laws have seemed a bit too restrictive on companies for years now. Why don't we repeal them too.

[Trephining]

I agree that minimum wage laws should either be repealed, or least left to stagnate to the point of being effectively useless.

Child labor laws are somewhat less damaging in my opinion. I do think some of them could be reduced. 13 year olds should be able to work in restaurants for example.

[jbrettlip]

I agree that minimum wage laws should either be repealed, or least left to stagnate to the point of being effectively useless.

Child labor laws are somewhat less damaging in my opinion. I do think some of them could be reduced. 13 year olds should be able to work in restaurants for example.

and strip clubs...

[Timminz]

Being forced to keep equipment in safe working order is totalitarian. If the machinery is that dangerous, the workers will just go to another company with safer equipment.

[tzor]

That is a very good question. The answer is very complex. For a moment let’s for get about illegal workers and look at the legal ones. As more and more “protections” get placed on the people on the lowest wages, the “cost” of hiring these people gets higher. Once these prices management starts demanding more for their money. At a certain level, you might not care about who flips your burgers as long as they flip the burgers correctly. Those who do not are quickly found out and removed. Those who do well are promoted. But as the “costs” for the worker increase so does the criteria, are they proven, dependable, will they stay with the company for the long run? As a result, there is a push to hire older workers over the younger and more inexperienced. The bottom line is that increasing the minimum wage does in fact increase unemployment percentages among young people. In the United States, the unemployment rate among teenagers is simply dreadful (Among the major worker groups, the unemployment rates for adult men (10.0 percent), adult women (8.0 percent), teenagers (26.1 percent), whites (8.8 percent), blacks (16.5 percent), and Hispanics (12.6 percent) showed little or no change in March.)

This impacts the general arguments of raising the minimum wage. There is, on the other hand a lower limit below which only immigrants (their legal status is not the issue here) would want to go because the average citizen (especially the young) would not want to work for that little money. On an international scale of things, the lowest possible incomes are so high above the pay scales of other countries that even the lowliest farm worker (working on a family farm barely making a profit) can amass a sum that would be a fortune in his native land; suitable to buy a good estate for himself and his family back home.

The minimum wage is only one of many “protections” whose cost can be avoided by using people who are too scared to complain. The simple fact is that people hire illegals because they can in fact get away with it. They are not burdened by insurance, or liability, or even the requirement to pay whatever they promised to the workers in the first place. In that sense the minimum wage is one of many. The argument is not to drop all “protections” but to better enforce the law.

[edwinissweet]

just because other governments dont like their citizens, doesnt mean the US should follow their example. Mexico isnt as bad as other places. But 55 pesos a day, or between 4.50-5 dollars depending on the exange rate is nothing short of criminal.

[Timminz]

http://www.youtube.com/watch?v=piNhC6EdfCk

[Johnny Rockets]

My Provincial Government just raised the minimum up to $9.50 per hour, the third hike in 4 years.

Although I pay my employees better than Min, it puts pressure on to give them an equivilant raise in pay as the gap isn't that huge.

But it all shifts. I'm not eating a grand per employee per year, so my prices for the products I provide and produce increase and YOU end up paying for it.

I agree on the concept, and I think it is nessesary to some degree but increases are not a fix for poverty. If your making minimum wage working 8 hours a day, you best be spending the other 16 bettering yourself education or skill set wise to rise above the bracket.

Johnny Rockets

honeyb.ca

[thegreekdog]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

[ljex]

Should the US minimum wage be repealed? It has led to the exportation of jobs overseas where wages are lower. It was led to massive illegal immigration by allowing business's to hire illegals and thereby avoid the minimum wage. If there was no minimum wage, no interference in the free market, then the jobs wouldn't have been sent overseas and there would be no motivation to hire illegal immigrants.

Most illegal immigrants make a better hourly wage than minimum wage. The reason they are cheaper companies need to pay insurance, tax, etc on legal workers which builds up costs for the company. However for illegal workers all they need to pay is the wage...

[Trephining]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

Lots of negotiated labor union contracts are tied to multiples of the minimum wage, so it isn't only the people that make very low wages affected.

And yes, it contributes to jobs going overseas. Why would I operate a low-skill factor (say a place that bottles shampoo and other household products) in the US and pay $18/hr when I could put the whole thing in Mexico and pay far far less? If I am dealing in massive volume, that could be 1000 employees working 8 hours per day 200 days per year. $1 reduction in hourly labor costs translates into $1/hr x 8 hr/ee day * 200 day/year * 1000 ee's = $1.6M / year.

It might not even have to be "moving jobs overseas". If you develop a new product that isn't made anywhere, where do you want to manufacture it? Not in the US because you have to pay too much. You might do the R&D in the US, market it here, work on distribution networks here, but you manufacture in MX or Korea or Indonesia or China and ship it. Those jobs weren't moved from the US overseas, but they were never created in the US in the first place.

[thegreekdog]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

Lots of negotiated labor union contracts are tied to multiples of the minimum wage, so it isn't only the people that make very low wages affected.

And yes, it contributes to jobs going overseas. Why would I operate a low-skill factor (say a place that bottles shampoo and other household products) in the US and pay $18/hr when I could put the whole thing in Mexico and pay far far less? If I am dealing in massive volume, that could be 1000 employees working 8 hours per day 200 days per year. $1 reduction in hourly labor costs translates into $1/hr x 8 hr/ee day * 200 day/year * 1000 ee's = $1.6M / year.

It might not even have to be "moving jobs overseas". If you develop a new product that isn't made anywhere, where do you want to manufacture it? Not in the US because you have to pay too much. You might do the R&D in the US, market it here, work on distribution networks here, but you manufacture in MX or Korea or Indonesia or China and ship it. Those jobs weren't moved from the US overseas, but they were never created in the US in the first place.

So I would put labor union contracts as the reason; not minimum wages. Your example illustrates that unions are the problem, not minimum wages. Because you know who makes minimum wage? Not people who lose their jobs to people overseas.

[ljex]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

Lots of negotiated labor union contracts are tied to multiples of the minimum wage, so it isn't only the people that make very low wages affected.

And yes, it contributes to jobs going overseas. Why would I operate a low-skill factor (say a place that bottles shampoo and other household products) in the US and pay $18/hr when I could put the whole thing in Mexico and pay far far less? If I am dealing in massive volume, that could be 1000 employees working 8 hours per day 200 days per year. $1 reduction in hourly labor costs translates into $1/hr x 8 hr/ee day * 200 day/year * 1000 ee's = $1.6M / year.

It might not even have to be "moving jobs overseas". If you develop a new product that isn't made anywhere, where do you want to manufacture it? Not in the US because you have to pay too much. You might do the R&D in the US, market it here, work on distribution networks here, but you manufacture in MX or Korea or Indonesia or China and ship it. Those jobs weren't moved from the US overseas, but they were never created in the US in the first place.

Minimum wage is not even remotely close to $18 an hour...

[jbrettlip]

for certain unions it is.

[nesterdude]

It's not about having a minimum wage, it's about to what extent the politicize it.
Having a minimum standard is an OK concept. But it ought to be, as echoed through several comments here, not reflective of a launchpad out of poverty.
As mentioned: if you're not innovative enough, goal oriented enough, have the wherewithall enough to take the rest of your time on this earth to better yourself, to get a better job, to plan for a better life, then shit, stay at 4.15 per hour (yeah that's what it was when I was a kid).

[thegreekdog]

for certain unions it is.

Yeah, that's different than actual minimum wage. Y'know, the one that seems to be a big deal for Democrats though it helps only teenagers.

[tzor]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

First and foremost, let’s remember that a lot of outsourcing is done because others are doing it. There are good reasons to outsource and there are all the wrong reasons; it is not always easy to tell the difference when your management is breathing down your neck to cut costs now!

Wages cannot be considered in isolation as people make wages and those people are in turn motivated by the wages they make. Wages, therefore, must be considered in the light of the cost of living of the general area. People in the city need to be paid more than people in the country, for example.

The biggest “outsourcing” that most people know about is the outsourcing of call centers. This isn’t really new; many companies originally outsourced all of their call centers to the Southern United States long before they outsourced all of their call centers to India. In both cases it was the significantly lower cost of living that allowed for the lower wage to the worker.

[PLAYER57832]

Should the US minimum wage be repealed?

No.

It has led to the exportation of jobs overseas where wages are lower.

Evidence? This is always thrown out. Superficially, it seems true. However, when you look a bit deeper, it gets far more complicated. A big reason why companies go overseas is less to avoid wages than to avoid safety and evironmental rules. Saying those rules send people overseas, though, implies that those safety rules don't make sense, should not exist in the U.S. This is exactly the kind of thinking to which I refer when I say that business look at very short-term economics.

Similarly, saying that a minimum wage needs to be lowered so that fewer industries will ship jobs overseas implies that there is no real and true reason for the current minimum wage. In fact, if you look at the real impact on society, there is far more argument for raising the minimum wage, rather than decreasing it. This is because the wage should be based on what it takes for a person to survive. In our country, people who live on minimum wage are, almost without exception, not supporting themselves. There is a lot of talk about a so-called "living wage". The principle is good, the problem is that too often there are a lot of unnecessary items put into that. I mean, sure, it would be nice if everyone could afford a nice vacation in Disneyland, but is that really a requirement for a minimum wage? No. A basic wage should supply food, shelter (everyone doesn't need their own room!) , basic clothing (used is just fine), and.. though I don't want this to become another health care debate, health care. (I'll just leave it at that and not discuss details on health care more in this thread).

When those minimums are not supplied by wages, then there are 2 assumptions made. Either the person is getting added support, true for teens and retired people, OR they don't deserve to have those minimums. The idea that anyone who truly works ought to be able to afford a house and food is a fairly basic one of our soceity for some time. That basis is not even all about altruism, either. People who cannot afford a place to live, who wind up on the street, cause society problems. People who cannot eat, get sick. Kids who do not eat do not grow properly or reach their full potential in any regard. Those things hurt society.

So, when you say that a wage does not have to supply a person's basic needs you are, effectively saying that someone else has to support them. Again, if its kids or retired people, perhaps. However, for most people, that means government aid. So, effectively government aid is supporting companies that pay low wages.

This is a dirty cycle. The person who makes less not only needs government support, drains taxes, but they also are not paying taxes. The company is paying some taxes on the extra profits, but more often than not, they have many ways to avoid paying those taxes. So, the demand on those taxes is higher, but the tax base is lower when minimum wages are dropped, sometimes a lot lower (when most of the "profits", for example are paid in stock dividends or reinvested into other business, etc.). Further, when wages are lower, people cannot buy as much stuff. That means the general economy sinks and sinks rather quickly.

In truth, few people actually work for minimum wage. You can argue that a higher minimum wage pushes all wages up and in that regard impacts industries. However, this is not all that true. What tends to push wages up is a lack of skilled individuals, and/or a higher cost of living that means people who can be mobile, who do not qualify for aid (single people as opposed to unmarried people with children). Unions absolutely operate in some industries and, yes, in some cases that has stretched way too far. However, it is also the case that far more employees work outside of unions. The gap is quite significant.

A union plant worker can often expect wages around $16 an hour here. Non-union workers doing virtually the same work will make only $12.75. Even more important, benefits differ a great deal. Many industries and jobs don't even have unions. A worker at the local Dollar General or Sheetz is likely to work part-time and can expect to make, at most about $8 an hour.

To put this in context, the person making 12.75, fulltime, with a little overtime, supporting a family of 4, is below the Medicaid eligibility wage (for those without disabilities, those with disabilities qualify up to $250,000), WIC (women, infants and children -- which means counseling on nutrition and medical care, free milk, vegetables, whole grain, etc amounting to roughly $60 a month), reduced school lunches (in our area that means breakfast is $0.60 instead of $0.80 and lunch is $0.80 instead of $1.25.) This same level is also used for a variety of non-governmental aid sources, but I will stick to taxes and gov aid for now. NOTE that I am talking about several dollars bove minimum wage! People working at minimum wage get food stamps, Section 8 housing (free rent), free lunchs, etc. in addition to the above.

Contrast that with what happens when wages go up. First, yes, goods cost more. Not always, because often times these companies that claim poverty are actually pretty profitable per most folk's reconing. In truth, it means lower stock payments and sometimes (but only sometimes) less invested in other areas. At the same time, though, people who are making more don't need as much government support. They PAY taxes instead of draining them. And, they a have more money to buy things, which helps the overall economy.

It was led to massive illegal immigration by allowing business's to hire illegals and thereby avoid the minimum wage.

In fact, many illegal workers make a good deal more than minimum wage. However, they make less than a citizen might demand to do the same job and tend to be a bit less "picky" about conditions.

If there was no minimum wage, no interference in the free market, then the jobs wouldn't have been sent overseas and there would be no motivation to hire illegal immigrants.

You are basing this on what you believe, not the evidence. Please look at the evidence.

Now, for the rest.. I know that there is a tradeoff when wages increase. There is a point at which jobs truly begin to be lost, whether because they go overseas or are just lost. However, our current minimum wage is well below that level. History shows that while the claim is always made that jobs are lost when the minimum wage increase, that is really only true for a short time. Further, where it is true, it is simply a matter of businesses that just were not doing a decent business.

[Trephining]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

Lots of negotiated labor union contracts are tied to multiples of the minimum wage, so it isn't only the people that make very low wages affected.

And yes, it contributes to jobs going overseas. Why would I operate a low-skill factor (say a place that bottles shampoo and other household products) in the US and pay $18/hr when I could put the whole thing in Mexico and pay far far less? If I am dealing in massive volume, that could be 1000 employees working 8 hours per day 200 days per year. $1 reduction in hourly labor costs translates into $1/hr x 8 hr/ee day * 200 day/year * 1000 ee's = $1.6M / year.

It might not even have to be "moving jobs overseas". If you develop a new product that isn't made anywhere, where do you want to manufacture it? Not in the US because you have to pay too much. You might do the R&D in the US, market it here, work on distribution networks here, but you manufacture in MX or Korea or Indonesia or China and ship it. Those jobs weren't moved from the US overseas, but they were never created in the US in the first place.

Minimum wage is not even remotely close to $18 an hour...

So reread the line from my post that I bolded for you.

[thegreekdog]

Do you guys really think minimum wages are the reason jobs are going overseas? I doubt that's even a remote reason.

First and foremost, let’s remember that a lot of outsourcing is done because others are doing it. There are good reasons to outsource and there are all the wrong reasons; it is not always easy to tell the difference when your management is breathing down your neck to cut costs now!

Wages cannot be considered in isolation as people make wages and those people are in turn motivated by the wages they make. Wages, therefore, must be considered in the light of the cost of living of the general area. People in the city need to be paid more than people in the country, for example.

The biggest “outsourcing” that most people know about is the outsourcing of call centers. This isn’t really new; many companies originally outsourced all of their call centers to the Southern United States long before they outsourced all of their call centers to India. In both cases it was the significantly lower cost of living that allowed for the lower wage to the worker.

My point is that the government-mandated minimum wage is not the reason jobs are going overseas. You all can argue all you want, but $8.15 (or whatever) an hour does not make General Motors build cars overseas; because their union members are making a whole lot more than $8.15 an hour.

[Phatscotty]

just because other governments dont like their citizens, doesnt mean the US should follow their example. Mexico isnt as bad as other places. But 55 pesos a day, or between 4.50-5 dollars depending on the exange rate is nothing short of criminal.

you are partially right. I think you might have to back off "criminal" when you realize you can also live 1/3-1/2 cheaper in Mexico then in the USA...

this explains why illegal immigrants can still have extra money to send home to their families in Mexico. They bring the "cheap lifestyle" with them, and that is the way to get ahead (when you earn minimum wage)

an example: In China, some people make 2$ a day. According to how you view things (without considering currency exchange rates) this Chinese person must be starving? Nope. The person making 2$ a day in China, and living "smartly" can legitimately live a middle-class life full of shopping and restaurants.

Please consider these details when reaching a conclusion on "what the USA should do"

[Nobunaga]

... From http://cafehayek.com/2010/04/an-entrepr ... -wage.html

To All Team Members:

The schedule for next week has been posted. You may notice that hours have been cut back on your schedule. This is across the board, not just you. I don’t want anyone to think they’ve done something wrong to deserve a cut in hours, so I wanted to explain why it’s happening.

There are a couple of reasons for this:

1) May and September are very slow months for our business. Anyone who has worked Sundays recently has seen the drop off in traffic. Now that we’re entering May, that drop off will continue on to other days as well, and it will get worse.

2) The recent increase in the minimum wage to $7.25/hour. Since we’ve opened, I’ve had a lot of people ask why they can’t get more hours, and it’s a great question.

I would LOVE to give everyone all the hours they want, and then some. Our customers would be happier across the board, we could accomplish much more every day, our business would grow, I could hire even more people, and on and on. However, we operate on a tight budget just like any other business, and in order to survive, we have to make money. That means our labor cost (the total amount you are all paid) must stay below a certain percentage of our total sales. If it doesn’t, we go broke and everyone loses their jobs.

Our brilliant Congressmen in Washington, D.C. decided a couple years ago that it would be a good idea to raise the minimum wage by about 40% to $7.25/hour. It just took effect last year. That probably sounds like great news for everyone – more money in everyone’s pockets can only be good, right?

Unfortunately, it doesn’t work that way in the real world. If I’m forced to pay everyone 40% more, I can’t afford to schedule as many employees for as many hours, since our sales aren’t going up by 40%. Remember, I can only afford to pay you guys a certain percentage of all the money coming in the door. That means hours get cut, and everyone ends up poorer.

In a perfect world, it should work the opposite way: you should be free to choose how much you think your skills and time are worth (since you know best), and I should be free to pay you whatever that amount is if I want to hire you. Everyone wins in that case. I get as many good employees as I want that I can afford to pay, and you get valuable job training, references, and relationships to carry into the future.

To prove how bad of a deal minimum wage is for you guys as hard-working job-seekers, just look at this way:

I’m not being forced to pay $7.25/hour; YOU are being forced to accept $7.25/hour no matter what, even if you’d be willing to take less in order to get (or keep) a job.

You can thank our elected officials in Raleigh and Washington for sticking you with such a raw deal.

If you have any questions about any of this or want to talk more about it, please feel free to come see me, the door is always open.

[Phatscotty]

have been hearing more and more of these kinds of stories. Over 90% of people do not know about these kinds of "realities" that is why we are fucked. The Looter class has a strong voting block now, and they think they can just vote themselves the treasury.