Firsthand Account of What Higher Minimum Wages Do

Increasing the minimum wage is retarded. There are so many problems with raising the minimum wage, one of which being inflation. When you increase demand, the cost of products and services increase.

As far as the myth about how well Australia is doing increasing the minimum wage:

A few weeks ago, the Australian government raised minimum wage to A$15 an hour (about $15.30 USD). It's more than double the federal minimum wage in the United States.
Statists say that Australia is proof that minimum wage laws help workers. They point to Australia's 5.1% unemployment rate. On my last show, Steven Greenhouse, the author of "The Big Squeeze: Tough Times for the American Worker" said "the economy of Australia probably, right now, is doing better than the economy of the United States."
But statists ignore the details.
Most people who earn minimum wage are young, unskilled workers. How are they doing in Australia?
In June, Australia's unemployment rate for workers age 15 to 19 was 16.5%.
Last December, 63% of all jobs lost were jobs for young, unskilled Australians.
It's simple: when the price of something goes up, people buy less. So when the price of labor goes up, employers hire less.

http://www.foxbusiness.com/on-air/stossel/blog/2012/07/13/australian-minimum-wage-myth

Increasing minimum wage causes FAR more problems than it fixes.

 

FALSE! US economic history shows no history of inflation after minimum wage raises. Did you flunk Microeconomics 101 ? Business owners can't raise prices on their products. Generally, it is impossible for them to do that.

 

So, what about if we decrease minimum wage? No one has ever tried it but according to opinions here it would lead to a new economic boon and it would also hurt the poor.

In contrast, raising the minimum wage should cause an economic crash and help the poor.

If we do nothing the poor still remain poor and the economy doesn't move very much, which in this economic lag isn't necessarily good but it isn't bad either.

I don't know what's best. Why don't we lab test it between the states. Texas can be the control group.

 

What does demand for a product have to do with raising the minimum wage ? History shows no inflation after minimum wage raises.

 

FALSE! Raising the MW does not harm the economy, and in fact it helps it by increasing disposable income, which increases sales$$, which increases re-investment,including hiring more workers, thereby creating more sales$$$, bolstering the economy.

 

If Minimum wage isn't strong enough to affect the economy, harmfully, then how do you know it will have much benefit either?

Businesses are in a fragile state right now . They need to expand to get new customers coming in, but they need to do so on the cheap. We are in a weak economy on the precipice of the next recession. Whether it will be mild or not I don't know.

Businesses made more money by down-sizing during the height of the recession and doing more with fewer employees. It's how the surviving businesses turned a crunch into a profit This is a new trick, not soon forgotten, and it will be at least a decade before businesses start hiring at pre-recession rates. The profit potential just isn't there right now. More workers doesn't mean more sales.

 

This article is about 18 months old. The minimum wage in Australia has sat at $15.96 since last year and has been raised to $16.35 in July of this year.

A couple of things you (and the article) have over looked.

1. I doubt there is one industrialised country where youth unemployment is not substantially higher than full adult unemployment.

2. The full adult minimum wage doesn't kick in in Australia until the worker is about 20 years of age.

Another interesting fact is that a 16 year old apprentice is on a higher hourly rate than 16 year old worker, meaning the Australian government is doing what it can and encourage young people to seek training before moving up to the minimum wage by the time they reach 20 years of age. Naturally, many young people either continue with high school and further education where part time jobs are the norm, or they 'fall through the net', leave school at 15 or 16 and take on menial employment (when it's available) at around $6 to $7 per hour.

Also,, the unemployment figures are always much higher in country and rural areas than in the city.

http://mywage.org.au/main/salary/minimum-wage

 

I love these pseudo-arguments that it's obvious we should just raise the minimum wage, and everything will get better. Raise it to $15 - hey, why not raise it to $60? Yeah, I know, raising it to $60 sounds ridiculous if you stop to think about it, but there's no explanation as to why raising it to $15 would improve things but raising it further wouldn't.

 

Printing money by the billions doesn't rise inflation , minimum wage will do ... funny people.
Capitalism is about supply and demand , let's see how killing demand will work for you.

 

he said they would have more money to consume with and pay to rents with. that equals more demand. Connect the dots.

 

Not really.

When you raise the minimum wage, businesses STOP HIRING. In fact, if they can possibly do so, they either reduce hours or lay people off. So sure, the lucky ones will make more money -- the ones who after their "raises" still get 40 hours a week and still have jobs. Their increased income is more than offset by the majority of unlucky workers who either have their hours cut (meaning that if anything they're making less money than before) or laid off completely (meaning no job at all, and since the increase in minimum wage means no one else is hiring, no prospects of finding even a part time job at all). So for the majority of these people, they're going to be cutting back on spending, not increasing because now they're forced into part-time work (less money) or no work at all (no money). Unless 1/3 of the former minimum wage earners are going to triple their spending, (and actually to get a boost, they'd have to do better than that) there's a net decrease in spending.

Try math sometime. Numbers are fun.

 

Decreasing minimum wage would be far better, even for poor people. If, of course, we took away all the entitlement programs so that they'd have to work.

This is not really debatable. We have raised the minimum wage many times in this country. What happened when we did so? Not only do the minimum wage people get increased but so does everyone else. That combined with more demand increases the costs for goods and services which causes the cost of living to increase. Once the cost of living increases those poor people are RIGHT back in the same position they were in before or worse and they're crying about how we have to rIse the minimum wage some more.

No the answer is if you didn't make the right choices growing up to prepare yourself to make money in the future and you are living off of minimum wage then you will need to get two or three jobs to support yourself and your family. That is the consequences of not taking school seriously and living in the now and not preparing for the future like the rest of us did.

 

You keep saying this but that's bs. If it were not we wouldn't have to keep raising the minimum wage. Inflation happens over time. Not overnight.

 

Ohhhh so you were being dishonest when you used Australia. Because they don't ACTUALLY have a true $16 minimum wage do they? They're only providing that level of a minimum wage to employees who are past a certain age. So that means mcdonalds can hire their burger flippers and cashiers at $6 or $7 an hour. But see that's not what you're advocating for here. You're advocating for a COMPLETE minimum wage and you just conveniently forgot to mention this part about it's nto a TRUE minimum wage in Australia.

Second... how long do you think they can keep this up? Per the article, they raise minimum wage essentially every year. How long do you think that can continue? Can they get up to $40, $50, $80, $100 an hour for minimum wage? Eventually it will have to stop... and why will it have to stop?

Third... this is KILLING small business in Australia. It's an absolute massacre. Not only are small businesses closing by the barrelfulls... but new small businesses are not opening up. Do you know why? Because a startup cannot afford the massive labor union costs for minimum wage. Either they hire a young person with no skills and no experience and no skin in the game so they can just quit tomorrow without caring. But see, they can't afford to pay their cashier $16 an hour when the cashier is only producing $9 an hour worth of income for the business. It's simply a mathematical impossibility.

This is a HORRENDOUS policy and mark my words, will end up DESTROYING Australia's economy.

 

Yes they would, at least some of them, as the cost of living would be recalculated as would the poverty line. I could support some modest MW increase but it all levels out in the end. Going from $3.35 an hour to $7.25, however, did not end poverty or make the poor any less poor--it just drives up the cost of living. Anybody who gets trapped into a minimum wage job does because their job does not provide them with marketable skill sets or experience that other employers find useful. As for the OP, a MW increase doesn't affect food prices so much because fuel costs are the larger cost driver there. It would certainly raise prices elsewhere due to increased demand for a fixed supply of other things.

 

Are you arguing with me or the facts? I have never advocated an across the board minimum wage.

Australia has had an adult minimum wage since January 1910, it was made law in October the previous year. So far the sky hasn't fallen in and Australian workers enjoy some of the best wage conditions in the developed world, and some of the highest standards of living on this planet. Feeling a tad jealous are you?

Small business is hurting around the globe. Prime case America. Where has most of your manufacturing industry gone? China, India and other Asian countries by the looks of it, even though your wage for the bottom rung process workers is a pittance. Your working class doesn't exist any more and your middle class is rapidly disappearing.

Australia has never really been a manufacturing giant like the US or European countries. We export very few manufactured goods, and most of Australia's manufactured goods are for the domestic market. Australia is mostly a primary producer.

Citation please.

 

Ahhhh, so you DON'T think we should have an across the board minimum wage in America? Make your point clear because you haven't said a damn thing about "adult minimum wage" until I called you on it.

WTF does that have to do with anything? We've had minimum wage since 1938.

This is false. Certainly not in the USA and certainly not because of manufacturing lol Manufacturing usually is not a small business venture. It's usually large businesses that engage in manufacturing.
http://upstart.bizjournals.com/reso...businesses-rose-since-recession.html?page=all

No problem at all.
http://au.ibtimes.com/articles/302479/20120222/small-business-closures-australia-up-48-2011.htm 2011 small business closures up 48%
http://www.heraldsun.com.au/news/vi...-statistics-data/story-fni0fit3-1226692393716 August 2013... 44 small businesses closing their doors every day.

On a different and not unrelated note, the carbon tax (which the retards in the US are advocating for) is also destroying small business in Australia.

 

I may have suggested lowered minimum wage, but I'm also a realist. We can't cut entitlement programs in such a case, not unless the government slashes taxes to the bone to try bring prices down across the board. Lack of revenue causes debt and debt causes government shutdown, it's a bad spiral of debt.

No, lowering the minimum wage wouldn't be better for the poor. The problem isn't that they don't work. They do. The problem is that they're working for minimum wage. And, then their income would be cut.

I just think the poor will suffer if the minimum wage is dropped. It's just unavoidable. It would take a social engineering super genius to somehow make this work for society.

 

Without government intervention, the market would correct itself. For instance, if you took their entitlements away and decreased their pay, their demand would decrease which means that supply would increase. When supply increases, the price of goods and services will decrease. It's simple supply and demand. Will there be some pain at first until the market corrects itself? Of course, but when you've made decisions in your life to where you're now forced to live off of minimum wage and you refuse to get 2 or 3 jobs to support yourself, there will be consequences to that type of behavior eventually. No amount of bellyaching will change that. Pain is coming... regardless. The question is, do we allow the massive amounts of pain that is coming from the market to dictate where our society moves? Or does our society inflict a smaller amount of pain and then WE dictate where our society goes.

 

The market won't fix itself on its own... because the government is involved in every part of the market: taxes, subsidies, and right down to the dollar in your pocket. Contrary to what the capitalists think the government IS the market. There's no market without the government and there's no separating the two. That's why I say it would take a social engineering genius to make it work, to manipulate all the variables to have a positive outcome.

 

Isn't this what I said in post #32? Repeating it doesn't make it any more true.

and this.

I did no such thing. I mentioned that the minimum wage kicks in at around 20 years of age. Re-read post #32.

I have never advocated the minimum wage for junior workers. Point me to where I advocated the adult minimum wage for junior workers.

 

You're absolutely correct. My apologies. I thought you were the OmegaEnigma guy who originally posted those pictures that I originally replied to in the first place. I stand corrected.

 

Are you aware that the current spending / buying power of the minimum wage job, is lower than it was in 1960?

Shouldnt min wage at the very least keep up with inflation? Which it has not? Otherwise there really isnt a point in having a min wage.

 

Accepted

 

My point isn't that its "fair", merely that it won't have any affect on the problem. When you pay everyone double, but also charge them double for goods and services what have you accomplished?