Minimum wage/Livable Wage

It's a simple case of job mobility and guaranteed health coverage.

I think you underestimate the impact of universal healthcare on the poor, or even those among the middle class who become poor because of health crises.

Besides the economic stability it brings individuals, guaranteed healthcare also provides job mobility in that workers need not fear losing their health insurance if they wish to seek new employment (especially important where they are also seeking increased income). Having no guarantee of health coverage means taking risks for many who would rather work elsewhere.

I think the bigger issue is how the working poor make their money. Multiple jobs, fluctuating work hours, and the costs of childcare and transportation are all problematic factors compounded by low wages.

This is a separate issue. I don't know the deal with housing prices in the U.S. I know there are affordable housing issues here as well. One of the persistent problems related to this is wealth/income inequality.
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Because it's their capital.

Not an argument; perhaps an observation. The world isn't often fair.

The rules of the game were changed by the U.S. government, who, historically, favours business and industry with nanny state protections. In the end, labour always loses the most.

I'm assuming you don't have a problem with reciprocity.
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If the U.S. were a true free market, you'd likely be dead. (Don't take it personal.)

Sweden's "high suicide rate" is actually a myth.

 

I think we can safely say the cattle metaphor (it was a metaphor, right?) has failed.

I think perhaps we should get back to people.




Like so:

Capitalism is about maximum value and minimum waste—or something.

Except "maximum value" and "minimum waste" have no real limits.

This is why there is no such thing as a free market, nor will there ever be.

Even though there are practically "human feedlots" in Third World countries, those economies are hardly free.

Truly free markets are only desirable to two kinds of people: 1) the independently wealthy, and 2) the delusional.

 

Oh, I understand it, which is why I said it failed.

However, if I don't understand it after all, it must be because you're being unnecessarily cryptic. (Which wouldn't be a first.)

As always, I'd rather talk in real terms. It's less confusing.

The mean hourly wage of childcare workers is $0.15 below the Democrats' proposed $10.25 minimum wage, so your $300 per week up to $350 per week isn't very likely.

Also, in Canada, many support subsidized childcare benefits for low-income workers. I'm not sure what the situation for this is like in the U.S., but the benefits of such programs should be obvious. (Though I think such programs deserve more funding for more coverage.)

Before we go further, we should start at the beginning. I have yet to see any valid counterarguments.

We do have a number of studies suggesting a positive overall impact (that don't deny costs). You even have places like Australia, where people warn against cutting minimum wage lest they create a class of "American-style" working poor.

That's not my point. My point is that in an environment of purely maximized value and minimized waste, labour loses big time. It's generally unsustainable for a number of reasons. The lack of a truly free market isn't due to a lack of trying.

As much as libertarians like to rail against it, if it weren't for the welfare state (and a host of other "government meddling"), things wouldn't be as good as they are now.

 

I imagine they would feel a bit cheated or cheap, or whatever. But this is a misconception. It's not that they are now worth less or anything; it's that undervalued workers are now worth more. It's also misleading to say that many minimum wage jobs are low stress. That was seldom the case when I worked at low wages. I can't see a childcare worker (who usually has some kind of education geared towards the position, plus any training and experience) will directly compare themselves to dishwashers or line cooks or cashiers. These are completely different jobs. I can't see a childcare worker thinking they'd possibly wash dishes, possibly sling hash, possibly push through people's transactions instead of being a childcare worker. I think they'd see their job as more rewarding than those other ones. They may think they're worth more than these workers to warrant a raise, but it's a specious argument since the jobs are unrelated in terms of skills and responsibilities.

On the other hand, the services industry and other employers who use low-wage/minimum-wage workers will now be competing more directly with potential employees. It's easier (and much cheaper) to get a job as a dishwasher, and so if the wages are similar between relatively unskilled jobs vs. childcare workers, then the labour pool will likely shrink for childcare workers. This is what will put upward pressure on wages for childcare workers. However, at the same time, the demand for childcare workers will likely increase as well because more people will want to work with a higher minimum wage that would make it more feasible.

Studies have analyzed the impact on inflation. There is undeniably some inflationary pressure. I think it's impossible to raise minimum wages without some negative consequences, but many of the studies note a positive overall impact. Generally, what happens is a shift of income distribution to the bottom end, where more spending happens. This, as a result, tends to outweigh the negative consequences.

This is an oversimplification. An economy grows based on a number of factors, one of which is innovation. Think about America's shift from an industrialized economy to a post-industrial economy. The impact of deskilling has been a reality for American workers for decades, and it was especially prevalent in an industrial economy based on manufacturing. With technological innovation and shifting of labour overseas, American manufacturing underwent several difficult shifts. I've criticized this before: Lamenting over the loss of a powerful manufacturing sector doesn't make any sense to an economy like America's. You can't compete with Third World wages. Instead, the American economy should focus on post-industrial aspects such as technology, knowledge, creativity, etc., which are largely service-based. As much as 80% of the American economy is services. Do you think it was that 50 years ago?

Even among companies that do both products and services, consider this example: Apple's market capitalization sits at around $462 billion. Neither the company, nor anything like it, existed in 1975. That same year, IBM's gross income was $14.4 million, a value worth only $62.4 million today. In 2013, Apple's revenues nearly broke $171 billion.

As long as humans have wants and needs, there will be the possibility for economic (and, in turn, job) growth.

In financial planning, accounting for inflation is important. This is why simply investing in bonds doesn't make sense. Bonds are guaranteed income, but the risk to their value is based on inflation. What's the point in being guaranteed a payout in 25 years if high inflation simply makes you break even (or worse)?

Regarding incomes, real wages are flat and have been for a long time despite steady increases in productivity. Translation: The economy is producing ever more but is paying its workers relatively the same over time (accounting for inflation). More specifically, despite steadily increased output, average weekly earnings in 2012 were 14% below those in 1972 (again, accounting for inflation).

So while your concern is a valid one, I don't think it's as grave as you project. I think there will be enough political pressure to keep wages high enough to keep at pace with inflation at the very least, and to push them to decent levels at best.

 

I wonder if this philosophy would translate over to the US?

Would the conservatives allow it...if it took people from the welfare they hate?
Would they push it past their business overlords?

BTW...the current £6.31 pounds = $10.38 dollars (and in London, £8.80 = $14.47 ...adjusted for cost of living)

I still say it should a percentage, per location, adjusted annually...that would allow for GDP flux and local cost of living. (less periodic bickering with %)

 

I'd like to point out again what's going on in the wider economy, besides just the minimum wage.

My past few posts pointed out a crucial bit of information, which I think indicates the need for an government-mandated minimum wage increase.

Have a look at this data: Overworked America: 12 Charts That Will Make Your Blood Boil | Mother Jones

The key thing to look at in this respect is this: Since 1979, productivity has increased by about 80%. Real wages? Around 10% (or, approximately an average of 0.3% per year—meaning they have just barely kept ahead of inflation). If the median household income actually kept pace with the economy since that time, it would be $92,000 instead of $50,000. Think about that for a second. What would it mean if thousands of American households each had as much as $40,000 more each year to do whatever with?

Instead what has happened is that the incomes of the top 1% increased over the same period by over 240%.

Now think about that. What's happened is that more wealth has become "trapped" at the top. It's actually an obscene amount of wealth if you think about it.

Now think about this: The average American household income is around $64,000 with annual expenditures around $50,000. Wealthy households with an average $250,000 in income spend on average $123,000. Households with $250,000+ income account for about 3% of the population.

Wealth trapped among the wealthy doesn't get spent at nearly the same rate as it does among average (or even poor) American households.

A higher minimum wage, despite some of the negative impacts, will have a positive overall impact on the economy, as it will help correct the problem (no matter how minimally) of wealth being trapped so "top-heavily" in the American economy.