Minimum Wage flip-flop

Subtopics:  Inflation, minimum wage, taxation, perks, entitlement

Found #2 EE recommendation from a major contributor as:

Minimum Wage?

Posted on 2014-06-13

 https://www.experts-exchange.com/questions/28455551/Minimum-Wage.html

 Solution by: BigRat 2014-06-18 >  basically for a minimum wage

What is your question ?

{Note: One need not review this supplemental comment to answer MQ. It is provided to assist any seeking background or alternative ideas.

 Having begun working at 1/hour or less had set goal of 10k annual, much in favor of minimum wage benefits.

 So had much recent disfavor of any proposing to not only not allow increase but to either keep it very low or to totally eliminate it.

 There have since been demands to double it or more. That stirs up the neurons rather uncomfortably.

Also disturbed by those having more perks/benefits, while limiting work week to 35 hours, and remaining dissatisfied demanding reduction for hours of work with increase in compensation.

 Wondering about acts to reduce all earnings by 10 percent across the board as well as costs (how?) by 10%, combined with firm enforcement of 10%  for all taxes (combined) with no deductions available ('pork', intrusion).

 One, what would results be (numbers used can slide). Evaluations and opinions are solicited; points provided here can be inflated. }

John Hurst > What is your question ?

 MQ: Do offer some pro/con and recommend how to address inflation of wages earned.
(Concerning subject of minimum wage)


{ Footnote: In USA the movement is toward current arbitrary goal of $15/hour, without consideration of either differing costs of living such as rural vs urban or ramifications, such as for the many whose wage lies between current minimum and the goal, a likely result of increase in cost of living, along with so many who get exempted from the increased minimum such as those living off of tips. Would really not care to answer own question or even supply leading comment. The web itself can be more resourceful.}

A large, visible fraction of jobs given as examples that need higher minimum wages seem like "red herrings". E.g., I've seen numerous references to young workers entering the job force (e.g., starting at McDonald's or wherever). And I've seen other examples that simply assert that a worker cannot maintain a home and family at some given minimum wage job.

But I'm not aware of any time in history when either of those held true. From that, I'm not aware that any society that guarantees that those both be true could permanently survive unless at least a large majority of the entire world did the same.

Apparently for some unspecified reasons, it's become unacceptable for low-level entry jobs for youth (McDonald's) to give less than enough to maintain a home and family. It wasn't a problem for me nor my friends when we were young, and it wasn't a problem for my parents/grandparents. Actually, it wasn't a problem even for my daughter. At that age, there's no reason to expect to be so financially secure. We all had a friend or two to share expenses, and our own "home and family" came later. Why is that suddenly no longer acceptable?

For the other group of low-level jobs, I can agree that such jobs probably don't pay enough. But the first thing that strikes me is that a couple can each have such a job and get by okay. Minimum wage where I live is $9.47/hr, so for two it's getting close to $20US/hr. Maybe they can't afford HD TVs in every room nor smart-phones for both nor two new cars, etc.; but none of those is really a requirement. All of them, though, are starting to feel like expected entitlements

Technically, my wife and I are "millionaires" with enough future income to meet all of our expected needs for the foreseeable future. We got here by lives of working, starting with minimum wage jobs. And we both have cell phones (in addition to two land-lines at home). But the phones only cost us $15US to buy and $8.35/mo each to use. There's no reason to need the latest smart-phones nor unlimited data downloads. We also have a DSL internet connection at home (best available at this location). But believe it or not, I also pay a separate $10/mo for a dial-up account. It's actually possible to survive without needing to live-stream movies, concerts and TV shows. Why has it recently seemed like the fanciest items must be part of any life for it to be acceptable? (And why do practically all of the hardest off people I know always seem to need smart-phones plus new laptops? This Core i7 Lenovo laptop cost me approx $100US after I added 24GB more memory, and it works great even if it was a few years old and bought used.)

Sure, it's not solid logic to think "We did it, so anybody else can do it." I'm well aware of that. But it's also not well founded to say "Things are hard for some, so we need to make laws to fix it for everyone."

It's not possible to continually force raises in minimum wage without subsequent demands in other jobs for higher pay. Costs then rise for everyone, and the result is demand for higher minimum wages.

At least one potential alternative is to seek a few ways to lower costs of basic necessities. We can look to food, shelter, clothing, transportation, health care, child care and possibly others as areas where cost reductions for many might be achieved. If costs can be lowered, expenses don't require incomes to be higher. In the U.S.A., for example, the federal Department of Agriculture might begine to coordinate between smaller, struggling farmers and more widely distributed farmers markets, both to help farmers with more dependable income and to make quality food available to more needy individuals at reasonable costs. That's actually a fundamental reason for it to exist. Together with the Departments of Labor and Transportation, efforts could create a lot of jobs in a self-supporting structure.

If the desired objectives are held in mind, other expense areas might provide other opportunities. Regardless, IMO, alternatives to ever higher "minimum wage" levels should be preferred.

The first question one must ask oneself is what level of poverty is acceptable in society today? Do we accept the possibility of living out of a cardboard box exposed to the elements? Or is there a minimal level of support coming from the state? There is an argument which says that private charities will provide a stop, but the historical evidence shows that this has never worked in a universal manner. That is, it tends to act against either just one type of poverty or is only locally effective. I think that ultimately the state must in some way or another attempt to provide some level of support against absolute destitution.

That said the question is how. Providing a social security check is all very well, but it does not lead to a solution. It fosters an attitude of entitlement and it makes it very difficult to get back into the system where one ultimately has to do some kind of work for self sufficiency.
So one comes to wage-support systems or negative income tax. The only problem I have with negative income tax, or in work benefits, is that it encourages businesses to pay an absolute minimum knowing that the tax payer will provide the rest. If one likes this sort of system, then the logical extension is a system whereby everybody gets a fixed "salary" from the state - whether they work of not - that is capable of being "topped-up" by work or other means. In work benefits ultimately means a transfer of tax revenues to the rich whereas tax revenues ought to be used pro bono publicum. And I'm not sure that heaving people out of poverty by allowing people to offer work at rock bottom prices is a good idea, basically because they are not heaved out of poverty - they remain the working poor or that lovely acronym JAMS (the Just About Managing) I think therefore one has to have a minimum wage, which, not incidentally, has to be capable of paying for contributions to social security and taxation. The idea of taking people out of such systems is attractive, in that they get to keep all the money they earn, but causes people to become disassociated from the state and its systems.

There is no evidence in Europe to suggest that the introduction of a minimum wage causes other costs to rise. Only in certain sectors of the service industry has such costs risen - like for example hairdressing - and of course the emplyer is not worse off than before, unlike the emplyee.