View Poll Results: What is your position on the federal minimum wage?

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  • Keep it as it is. No change needed.

    1 4.55%
  • Raise it to suggested $15 per hour.

    5 22.73%
  • Raise it to somewhere between $7.5 to $15 per hour.

    3 13.64%
  • Raise it to a point higher than $15 per hour.

    3 13.64%
  • Abolish it completely. Let the market decide.

    7 31.82%
  • Not sure.

    2 9.09%
  • Don't care.

    1 4.55%
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Thread: Minimum Wage - Living Wage - What Wage?

  1. #1

    Default Minimum Wage - Living Wage - What Wage?

    Last time the federal minimum wage was raised was in 2009 from $6.55 to $7.5 under Barack Obama. I believe at the time both the House and the Senate were run by the Democrats.



    Looking at how minimum wage remains the same for such long periods its hard to understand for a lot of us why such a system exists. In many countries, minimum wage is yearly updated based on mostly inflation. In the USA, inflation is relatively low but not non-existent. Simply put, the inflation rate between 2009 and today is about 24%.

    Of course, I can hear some of you say that the free market have been raising the wages in average in a similar amount or more. While less and less people work at minimum wages, there are still a sizeable group that occupies this position. The group that lives near the minimum wage is even larger.

    Then there is the living wage. Obviously, wages differ from state to state and depends a lot on where you live even within the state. However, its safe to say that the current minimum wage doesn't even cover the lowest region. To check what the living wage is in your area see this project by MIT. Let's check living wages for 4 places for example:




    Recently, an effort to put a raise in the latest stimulus bill failed to bear fruit:

    Raising the US minimum wage: what just happened and what comes next?
    What happened?

    The idea of pushing up the minimum wage in stages to $15 in 2025 was included in Joe Biden’s $1.9tn stimulus package that seeks to support vaccine distribution and an extension of unemployment benefit among other pandemic provisions.

    The minimum wage element of the bill was a very big deal. It would increase the incomes of 27 million Americans, with almost 1 million people lifted out of poverty, according to the Congressional Budget Office.

    The Democrats have decided to fast-track the bill as a way of avoiding Republican opposition through a channel known as “budget resolution”. That would provide for a simple majority vote in the Senate, avoiding the dreaded filibuster where 60 votes have to be attained – an impossible task given Republican intransigence within the new evenly split 50-50 Senate.

    The snag is that budget resolution is subject to strict limits on how it is applied, designed to prevent political leaders packing the bill with all sorts of goodies entirely unrelated to federal revenue or spending. The unelected keeper of those restrictions is Elizabeth MacDonough, the grandly titled Senate parliamentarian, who announced on Thursday that in her reading of the rules the $15 minimum wage was extraneous to budget legislation and thus had to be removed.
    So, what I want to discuss is, why not tie federal minimum wage to inflation? We all know the concerns with raising the minimum wage from one side of aisle while the other side believes that those concerns are overblown. We can discuss various examples on how raising the minimum wage effects inflation in return as well. Pretty much anything directly related to minimum wages can go here.
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  2. #2

    Default Re: Minimum Wage - Living Wage - What Wage?

    There will always be theoretical issues with mandated wages following with cost of living increase. However, I would rather play cat and mouse while finding something longer term than to be a mouse that gives up and crawls while the cat comes closer every year. Clearly something is wrong if costs climb and wages stubbornly sit in place, or offer the untenable answer of inching along while still losing ground.

    Ultimately I support the idea based on the above. It does not require we sacrifice other paths of resolution. That idea feeds laziness, and speaks to something larger to take care of.

  3. #3

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by PointOfViewGun View Post

    Looking at how minimum wage remains the same for such long periods its hard to understand for a lot of us why such a system exists. In many countries, minimum wage is yearly updated based on mostly inflation. In the USA, inflation is relatively low but not non-existent. Simply put, the inflation rate between 2009 and today is about 24%.

    Of course, I can hear some of you say that the free market have been raising the wages in average in a similar amount or more. While less and less people work at minimum wages, there are still a sizeable group that occupies this position. The group that lives near the minimum wage is even larger.
    Our country doesn't have a minimum wage. The idea of a minimum wage was that it's an amount that you get paid if you work a full work week and you could survive affably off of it after taxes. 7.50 is nowhere near that across the federal landscape, to the point that any group that works at that amount typically has to have multiple secondary jobs. And then likely on federal programs like food stamps. There are ways to finesse it using both inflation, and possibly something like a locality pay map. But 7.50 is nowhere near enough for anywhere.

    Minimum wage is supposed to be about the COST of labor, not the opinion of the value of the job that a "minimum wage" is typically attached to. If you get that person's labor, but he still can't feed himself, the taxpayers make up the difference. That means WE subsidize the business owner's stinginess. WALMART was hit with this criticism for a long time. And shrugged it off. And is finally raising their wages. But that is nothing on the idea of what an actual "minimum wage" should be.

    We don't make laws based on what we assume a worker's life situation is. We have child labor laws that address the age at which someone can or should earn a wage at all. We have medicare laws addressing the fact that private insurance companies don't want to or can't afford to fully deal with the entirety of medical care for senior citizens and senior age workers(taxes are paid into this essentially for life). We have social security to compliment that as well(taxes are paid into this essentially for life). We have many people working these wages that are still on medicaid because, shocker, they're poor and still need medical care.

    Once they are workers, they are the same under the law. So yea, the argument that raising the minimum wage so that workers could earn a living wage would bankrupt many companies means that 1) the companies were morally bankrupt, and 2) they're not running a good business model anyway.
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  4. #4

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by Gaidin View Post
    Minimum wage is supposed to be about the COST of labor, not the opinion of the value of the job that a "minimum wage" is typically attached to. If you get that person's labor, but he still can't feed himself, the taxpayers make up the difference. That means WE subsidize the business owner's stinginess. WALMART was hit with this criticism for a long time. And shrugged it off. And is finally raising their wages. But that is nothing on the idea of what an actual "minimum wage" should be.
    That's a great way to see it.
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  5. #5
    alhoon's Avatar Moderator
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    Default Re: Minimum Wage - Living Wage - What Wage?

    Some good points here. I like the argument of "if the business owner doesn't pay a living wage, the taxpayers do".

    However, the OP says that minimum wage was increased by ~15% in 2009. What happened to prices around the USA after that? My main issue with raising the minimum wage is that it may simply drive prices higher. I.e. if everyone's wage jumps by 20%, it may be that basic foodstuff, low-rent, utilities and other basic expenses would increase by 20% in a couple of years.
    Is that the case? Or not?

    Another issue I would have in a large federation like the USA is that not all states have the same basic living cost. 15$ per hour in NYC is below-living while in rural Mississippi it would be more than enough. From this map (which I am not sure how accurate it is) we see that New York State is ~60% more expensive than Mississippi. Using the same minimum wage would be crippling in some areas while not enough in others.
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  6. #6

    Default Re: Minimum Wage - Living Wage - What Wage?

    A minimum wage simply assures a certain segment of the society will be perpetually unemployed or under-employed.

    The beneficiaries of an increase in minimum wage are those portion of minimum wage workers who manage to keep their jobs after the dust settles. Also, large companies that can absorb the hit to their bottom-line while their less well-situated and smaller competitors fold, will clearly benefit from the increased minimum wage.

    If we are going to have a minimum wage why not make it $30 or $50 per hour? The same general arguments against a $50 dollar minimum wage are also valid against the concept of ANY minimum wage.

    The minimum wage is unethical, unconstitutional, and contrary to sound principles of economic truth.
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  7. #7

    Default Re: Minimum Wage - Living Wage - What Wage?



    Inflation in USA pretty much followed global trends. After 2009 there was an increase along with raise in other countries.

    Inflation since 2008:


    • 2008: 3.84%
    • 2009: -0.36%
    • 2010: 1.64%
    • 2011: 3.16%
    • 2012: 2.07%
    • 2013: 1.46%
    • 2014: 1.62%
    • 2015: 0.12%
    • 2016: 1.26%
    • 2017: 2.13%
    • 2018: 2.44%
    • 2019: 1.81%



    Quote Originally Posted by ByzantinePowerGame View Post
    A minimum wage simply assures a certain segment of the society will be perpetually unemployed or under-employed.
    The beneficiaries of an increase in minimum wage are those portion of minimum wage workers who manage to keep their jobs after the dust settles. Also, large companies that can absorb the hit to their bottom-line while their less well-situated and smaller competitors fold, will clearly benefit from the increased minimum wage.
    If we are going to have a minimum wage why not make it $30 or $50 per hour? The same general arguments against a $50 dollar minimum wage are also valid against the concept of ANY minimum wage.
    The minimum wage is unethical, unconstitutional, and contrary to sound principles of economic truth.
    This assumes that raising minimum wage causes significant unemployment. It doesn't. Why keep banking on that position then?
    Last edited by PointOfViewGun; February 28, 2021 at 01:06 PM.
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  8. #8

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by alhoon View Post
    Another issue I would have in a large federation like the USA is that not all states have the same basic living cost. 15$ per hour in NYC is below-living while in rural Mississippi it would be more than enough. From this map (which I am not sure how accurate it is) we see that New York State is ~60% more expensive than Mississippi. Using the same minimum wage would be crippling in some areas while not enough in others.
    Alaska and Hawaii are the only locations on the general pay schedule as full states. Everywhere else gets a bit more granular. I would question it's accuracy on that alone. For instance, there's a reason Fairfax, VA is in the Washington, DC locality, and Roanoke, VA isn't. It would seem by your map Western and Central Virginia would drag down the Northeast Virginia cost of living index.

    Then again, if you assume that federal minimum wage, and a set of localities based on an actual cost of living. Fairfax and DC can pay that fair minimum wage, but so can Roanoke.
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  9. #9
    alhoon's Avatar Moderator
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    Default Re: Minimum Wage - Living Wage - What Wage?

    The map was an example. My point is that you can't expect rural town_813 on the mountains to have the same wages as New York City or Los Angeles. Minimum Wage should be set by area. Even within the same state (especially for huge ones like Texas and California) cost of living probably fluctuates wildly.
    There are some farm towns in Northern California which (I believe) were hit hard by the huge minimum wage of California and had to resort to illegal labor below minimum wage. Frankly, I think minimum wage should be set by county or something and be based on cost of living.

    "Then again, if you assume that federal minimum wage, and a set of localities based on an actual cost of living. Fairfax and DC can pay that fair minimum wage, but so can Roanoke."
    I don't understand that sentence.
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  10. #10

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by alhoon View Post
    "Then again, if you assume that federal minimum wage, and a set of localities based on an actual cost of living. Fairfax and DC can pay that fair minimum wage, but so can Roanoke."
    I don't understand that sentence.
    How the Federal Pay Schedule is handled for more expensive cost of living areas:
    Quote Originally Posted by Gaidin View Post
    Something similar can be used for a federal minimum wage if it were to be theoretically done. Or...you know. We call this clicking links in other posts to see what the point they are making is.

    Like, why Alaska and Hawaii are the only states fully on a pay schedule here, but why would every other state break it down since it's cheaper to live in Northern Michigan than it is Detroit, Michigan. But you are more obsessed about...a state as a whole. Where the only states where that is relevant are Alaska and Hawaiii because not only are they not a part of CONUS, but they have to ship much of their resources there from quite some mileage away making many of the things they need much more expensive on general use principal.
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  11. #11

    Default Re: Minimum Wage - Living Wage - What Wage?

    https://www.americanactionforum.org/...ation-in-2013/

    As shown in the following charts, the analysis finds that in 2013, a $1 increase in the minimum wage was associated with a 1.48 percentage point increase in the unemployment rate, a 0.18 percentage point decrease in the net job growth rate, a 4.67 percentage point increase in the teenage unemployment rate, and a 4.01 percentage point decrease in the teenage net job growth rate. Consequently, high state minimum wages increased unemployment by 747,700 workers and reduced job growth by 83,300 jobs.
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  12. #12

    Default Re: Minimum Wage - Living Wage - What Wage?

    One can easily play with numbers to create the situation where increasing the minimum wage automatically increases unemployment rate. In reality, unemployment rate relies heavily on a wide variety of factors. Employment cost is just one of them.

    There also many studies that claim raising minimum wages do not really cause ride in unemployment:

    Why Does the Minimum Wage Have No Discernible Effect on Employment?
    Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.
    Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data
    Traditional estimates that often find minimum wage disemployment effects include controls for state unemployment rates and state‐ and year‐fixed effects. Using CPS data on teens for the period 1990–2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and not robust to the source of identifying variation. Including controls for long‐term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but very small disemployment effects. Dynamic evidence further shows the nature of bias in traditional estimates, and it also rules out all but very small negative long‐run effects. In addition, we do not find evidence that employment effects vary in different parts of the business cycle. We also consider predictable versus unpredictable changes in the minimum wage by looking at the effects of state indexation of the minimum wage.


    In fact, after 2009, a year later, job creation under Obama with the new higher minimum wage managed to turn the bad tide that was created towards the end of the Bush presidency.

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  13. #13
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    Default Re: Minimum Wage - Living Wage - What Wage?

    Having a minimum wage works for Australia but compared to the US we are a simple marketplace. We are like three fifths of Texas economy and population spread over three fifths of the continental US, so federal controls and mandated wealth redistribution make sense here.

    My guess is a minimum wage might suit a state like Texas as it is fairly wealthy, a lot of wealth is drawn from public land and semi-privatised utilities, so there's straightforward taxable sectors to pay for these measures. Politically I'm guessing it would be near impossible though.

    Obviously the tremendous complexity of the US federal/state system complicates analysis. Overall the system is very powerful but it'd be nice if there was less naked plutocracy but that's just feelings: things are still way better than China or Russia.

    The fact Walmart and Amazon etc have business models based around employing people who also receive welfare stinks a bit.

    I think things like minimum wages and social security are to some extent anti-riot measures. They take a while to work, the benefits are indirect and some sectors will end up subsidising others, so you'd have to satisfy the losers as well as the winners. It would probably put a brake on the stock market so there's be screaming trust fund babies and traumatised billionaires to pacify if the US did bring in a decent minimum wage system.

    I think it might need time to work, and some amount of bipartisan support. You'd need a catchy name like "trickle up economics".
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  14. #14
    antaeus's Avatar Simplism
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    Default Re: Minimum Wage - Living Wage - What Wage?

    If you're going to have a minimum wage, then it should reflect it's purpose. It should be there to protect the most vulnerable employees from exploitation. As exploitation is relative to economy, the minimum wage should also be relative to a measure of the economy's performance.

    In this respect it can be automated - it can go up and down in response to something like fluctuations in wages or the cost of living. Because the price of goods changes with the economy, poverty is relative and no fixed measure is going to be accurate for long, and is just inviting another debate.

    I don't know what the best metric to tie minimum wage to is. Inflation is one measure that allows it to move with the price of goods, median wage might be another measure. Either way, it should allow the minimum wage to drop or climb relative to the economy in the same way that the poverty line moves.

    Otherwise it is pointless and we should let the market decide.
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  15. #15

    Default Re: Minimum Wage - Living Wage - What Wage?

    Unfortunately, the real minimum wage is zero. If your labor is worth 10 dollars an hour and the government imposes a minimum wage of 15 dollars an hour, you're not going to get a raise - you're going to get fired. And there's a lot of people out there whose labor is worth less than 15 dollars an hour.
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  16. #16
    antaeus's Avatar Simplism
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    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by Prodromos View Post
    Unfortunately, the real minimum wage is zero. If your labor is worth 10 dollars an hour and the government imposes a minimum wage of 15 dollars an hour, you're not going to get a raise - you're going to get fired. And there's a lot of people out there whose labor is worth less than 15 dollars an hour.
    You're kind of correct, but not in the way I think you intend. You're right, labor has no inherent value. People's labor is worth what they will accept to do the job - which is relative.

    I wouldn't clean toilets unless I was paid a lot - Because I have a job that leaves me feeling valued for my contribution. But if I didn't have a job and was desperate and hungry, I would accept almost anything to clean a toilet - which is where abuse can and does happen. There is always someone who will pay as little as possible to have their toilet cleaned - literally - there are people who would enslave someone to do it. Which is the point of a minimum wage - it protects those who are too desperate to be able protect themselves, because when we let the market decide, whenever there is a downturn, the market will decide on abuse.

    Regarding whether minimum wages actually harm employment prospects, PoV addressed your point more directly three posts above this. Certainly, if you raise the minimum wage, some people will lose their jobs, but in the longer term it ends up being chicken and egg. People at the employment fringes earn more -> they spend more -> businesses do better -> businesses can hire more. And there are more people at the employment fringes than there are at the top of the wage chain so small contributions to their wellbeing go further for the economy than they do for high earners. So by empowering their spending, theoretically, you're improving the economy.


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    Last edited by antaeus; February 28, 2021 at 06:29 PM.
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  17. #17

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by Prodromos View Post
    Unfortunately, the real minimum wage is zero. If your labor is worth 10 dollars an hour and the government imposes a minimum wage of 15 dollars an hour, you're not going to get a raise - you're going to get fired. And there's a lot of people out there whose labor is worth less than 15 dollars an hour.
    What job is worth less than 15 dollars an hour?
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  18. #18
    alhoon's Avatar Moderator
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    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by PointOfViewGun View Post
    What job is worth less than 15 dollars an hour?
    Apparently being a Postdoctoral researcher with Teaching Assistant duties in Greece.

    Anyway, I assume the poster means people that are simply bad in their job.
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  19. #19

    Default Re: Minimum Wage - Living Wage - What Wage?

    Quote Originally Posted by alhoon View Post
    Apparently being a Postdoctoral researcher with Teaching Assistant duties in Greece.

    Anyway, I assume the poster means people that are simply bad in their job.

    If your only skills are being physically fit and willing to do dirty routine manual labor such as digging ditches or shoveling coal, your labor might be worth well less than $15 per hour.

    The market decides what labor is worth based on the other associated costs of production, expected profit margin, and the costs to automate the labor as an alternative to using human labor.
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  20. #20

    Default Re: Minimum Wage - Living Wage - What Wage?

    The market includes the customers. If the majority of the customers want people who do simple manual labor to be able to live with dignity they do make that desire manifest through politics. So, basically, having a minimum wage is what the market decides.
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