Economic illiteracy and the Minimum Wage
Posted by: Hemingway (IP Logged)
Date: February 22, 2014 01:17AM
Many people on the Right are criticized by the Left for being impervious to reason and fact on certain issues such as Evolution. Yet, on issues such as the minimum wage the Left shows it’s own granite headed disregard for reason and fact.
Our President is actually telling us that the Congress can legislate away poverty. According to the President, all that needs to be done to lift millions out of poverty is for the Congress to increase the minimum wage and poverty for full-time workers will go away.
“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour.”–President Obama State of the Union 2014.
Does anyone on this forum actually believe that raising the minimum wage to $9 or $10 per hour will cause every full time worker in the USA to not be in poverty? Does anyone believe this nonsense?
The minimum wage is popular because people don’t see that it’s a trade-off of costs and benefits. The benefits are that many people will get a raise but the costs will be that many people will also lose their jobs. Another cost is that is a minimum wage hike is inflationary; so the bump in pay will eventually evaporate in a few months by inflation.
If this minimum wage bill passes, the people it ostensibly is designed to help will be hurt–and that is a cruel irony.
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Re: Economic illiteracy and the Minimum Wage
Posted by: Gary_Rosati (IP Logged)
Date: February 22, 2014 10:39AM
Hemingway Wrote:
——————————————————-
> Many people on the Right are criticized by the
> Left for being impervious to reason and fact on
> certain issues such as Evolution. Yet, on issues
> such as the minimum wage the Left shows it’s own
> granite headed disregard for reason and fact.
You’re comparing apples to oranges. While Evolution is an established scientific fact the effects raising the minimum wage are nuanced.
> Our President is actually telling us that the
> Congress can legislate away poverty.
This is a false and a gross over statement of what was said.
> According to
> the President, all that needs to be done to lift
> millions out of poverty is for the Congress to
> increase the minimum wage and poverty for
> full-time workers will go away.
Certainly millions of minimum wage workers are below the poverty index now, and there is no question that raising the minimum wage would help million to raise out of poverty.
> “Tonight, let’s declare that in the wealthiest
> nation on Earth, no one who works full-time should
> have to live in poverty, and raise the federal
> minimum wage to $9.00 an hour.”–President Obama
> State of the Union 2014.
>
> Does anyone on this forum actually believe that
> raising the minimum wage to $9 or $10 per hour
> will cause every full time worker in the USA to
> not be in poverty? Does anyone believe this
> nonsense?
Again, this is a gross over statement. No one said anything about “every full time worker in the USA” being raised out of poverty.
> The minimum wage is popular because people don’t
> see that it’s a trade-off of costs and benefits.
No, too often many people criticize things like raising the minimum wage based on ideology, and spin nuanced facts to fit their black and white dogma.
> The benefits are that many people will get a raise
> but the costs will be that many people will also
> lose their jobs.
The latest CBO Report found that raising the minimum wage to $10.10 an hour (and then indexing it to inflation) would reduce employment by only about 500,000 workers. At the same time, the report found that about 16.5 million minimum wage workers would see an increase in their earnings as a result of the hike. The repost also found that a number of higher-wage earners would also see a jump in income.
> Another cost is that is a minimum
> wage hike is inflationary; so the bump in pay will
> eventually evaporate in a few months by inflation.
Hardly. Inflation has actually stayed surprising low even after a long period of gradual economic improvement.
> If this minimum wage bill passes, the people it
> ostensibly is designed to help will be hurt–and
> that is a cruel irony.
The vast majority of those intended to benefit will benefit, and so will the economy as a whole through increased demand. Is raising the minimum wage a panacea to all our economic problems? No, of course not, and no body said is was. But, on balance its the right thing to do.
But I would agree more needs to be done. The problem is the old ideas — trickle down and government stimulus — have failed. (Actually the former has failed miserably and the latter has had only modest success.) Its time for some new ideas and new approaches. Does anyone have any? I mean, besides me…
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