Carpe Diem

The real tragedy is that many Americans earn $0.00 per hour and live in poverty, because of the minimum wage law

minwage

Cartoon by Henry Payne.

President Obama (from last night’s State of the Union speech): “We know our economy’s stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.

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 an hour.”

As I wrote recently about the minimum wage, the president is recycling a liberal narrative that there are millions of struggling adults working full-time and trying to raise a family, but are stuck in jobs that pay only the minimum wage, which then justifies increases in the minimum wage to “help the poor.”  But consider these facts about the minimum wage based on BLS data here and here:

1. In 2011, there were 112,564,000 Americans working full-time, and 111,821,000 of those workers, or 99.4%, were earning more than the minimum wage. Only 743,000 of those full-time workers were earning the minimum wage (or less), or 0.66% of the full-time workforce.

2. There were almost 45 million workers nationwide who were paid hourly wages and working full-time (40 hours or more) in 2011. Of those full-time hourly workers, 98.3% were earning more than the minimum wage, and only 743,000 (and 1.7%) were earning the minimum wage or less.

3. There were 3,936,000 teenagers (16-19 years) working at an hourly wage in 2011, and more than 3 million (3,037,000), and 77.2%, of those hourly teenage workers were earning an hourly wage higher than the legally-mandated minimum wage.

4. For the age group 25 years and over, there were 59,490,000 hourly workers, and 57,557,000 (and 96.75%) were earning more than the minimum wage, and only 1,933,000 (and 3.25%) were earning the minimum wage or less.

Bottom Line: The notion that there are millions of full-time workers struggling to raise a family, but are stuck in jobs paying the minimum wage for long periods of time is more myth than fact.  Almost all full-time workers (99.4%) are earning  more than the minimum wage, and almost all full-time hourly workers (98.3%) are earning more than the minimum wage. Most importantly, the fact that more than three out of four teenagers (77.2%), who are the least skilled and least educated group of workers, earned more than the minimum wage in 2011 would suggest the minimum wage is mostly an entry-level wage for beginning workers with no skills. The reality of the labor market is that even a large majority of previously unskilled teenage workers are earning more than the minimum wage as soon as they acquire minimal jobs skills and work habits, and can demonstrate their value to employers.

If more than three-quarters of teenagers earn more than the minimum wage, then any hardworking adult certainly can, and it must be a false narrative that full-time workers “are stuck” in minimum wage jobs and trying to raise a family, but mired in a life of poverty. The real issue is that there are many unskilled workers who desperately need that first job that allows them to acquire the skills and experience that leads to higher wages as the teenage data demonstrate. But the minimum wage law prices many of those unskilled workers out of the labor market (especially minority populations), and they are denied the employment opportunities they desperately need (see cartoon above). The real tragedy isn’t that some full-time workers are initially earning $7.25 per hour and supposedly “living in poverty,” but that there are millions of unemployed Americans willing to work but are earning $0.00 per hour and living in poverty because of the minimum wage law.

130 thoughts on “The real tragedy is that many Americans earn $0.00 per hour and live in poverty, because of the minimum wage law

          • The problem is that conservatives have a terrible track record when it comes to this stuff.

            Remember when child labor laws were going to kill jobs?
            Somehow business got by without infant employees.
            Rural electrification? What a lot of chaos that was!
            What about when the smoking bans were going to close bars and restaurants? Now there’s nowhere to eat or drink in New York City.

          • The problem is that conservatives have a terrible track record when it comes to this stuff“…

            Wrong pylonboy, R.I.N.O.s have a bad track record…

      • Note that Bush is seen as bad even if he did exactly the same wrong thing that Obama did.

        Lefto-losers like rjs don’t care ‘what’ is done, but rather ‘who’ did it.

    • Obama has done more to harm black people than all white Republican Presidents combined.

      Note that Abe Lincoln was a Republican, while the KKK has always been closely tied to the Democrats.

  1. ” Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.”

    wow is there some bad logic here.

    what is wrong here is the assumption that someone who has such a complete lack of skills and experience that they earn minimum wage (when you can make $10-12/hr and $24k a year as a counter guy at in an out burger) has any business trying to support 2 kids by themselves.

    even if we accept the ludicrous proposition that adults with families are working for minimum wage in any real numbers, this logic is completely backwards.

    obama seems to be supporting the right to have as many kids as you like regardless of whether you can afford them and then blaming society for not paying you enough.

    people used to save up to get married, buy a place, and have kids. you had kids when you could afford them. you did not have kids and then demand that they be paid for.

    if you have literally no job skills, sorry, you cannot be a solo breadwinner for 2 kids and perhaps a spouse. nothing is going to change that. get some skills, earn some money, then think about having kids.

    it is not the duty of the society to backstop bad choices made by individuals, it is the responsibility of the individual to make sensible choices.

    • Morganovich,

      “it is not the duty of the society to backstop bad choices made by individuals, it is the responsibility of the individual to make sensible choices.”

      Yeah, but then who would need the Democrat party?

      • paul-

        i’m not a big fan of either party. let’s face it, both would happily sell you the shirt off someone else’s back for votes.

        our founders from adams to jefferson to washington repeated warned us against the evils of political parties, particularly a 2 party system.

        as so many of their remarkably far sighted political insights have, this one has played out just as they predicted.

        both parties court and purchase favor from portions of the electorate, generally by taking the liberty and treasure from another part.

        to my mind, the real question is why do we need either party or any parties at all?

        political parties emerge and persist for the same reason that prison gangs do: brute force to protect members and bludgeon opponents.

        political parties are essentially a prisoner’s dilemma:

        we would all be better off without them and if we can all chose to disavow them, we all win, but, if you fear others will form a party first, your best course is to beat them to the punch.

        and, of course, as in a prisoner’s dilemma, the more players you have and the less trust between them, the more likely you race to the bottom as opposed to make the optimal choice.

        just as capitalism becomes robust and antifragile through the plurality of individual decisions, so too does democracy. if 2 parties come to dominate and through the rigorous enforcement of party lines efface cross cutting cleavages from the electoral bodies creating instead monolithic voting blocks, then we have already lost. such a system is not robust and becomes fractures, divisive, and dogmatic. that is that path to tyranny, not liberty. every election i find myself faced with the choice not of “who will i trust to champion my liberty” but rather “which of my liberties do i prefer to be trampled upon this time?”. that is the inevitable consequence of a 2 party system. each tries to steal liberty and lucre from the other to buy votes.

        • Morganovich,

          “i’m not a big fan of either party. let’s face it, both would happily sell you the shirt off someone else’s back for votes.”

          Generally speaking, I agree there are alot of huckster politicians on both sides. However, only one side has a Tea Party. The other side paraded Sandra Fluke around like a modern day Joan-of-Arc.

          The real villains, however, are the mindless and corrupt voters who demand fiscal responsibility just as long as their own particular honey pot is left alone. Milton Friedman nailed it when he said, “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or it they try, they will shortly be out of office.”

          • “Generally speaking, I agree there are alot of huckster politicians on both sides. However, only one side has a Tea Party. The other side paraded Sandra Fluke around like a modern day Joan-of-Arc. ”

            yet that first side passed the “patriot” act, as nasty a piece of fascist legislation as i can recall and some truly awful medicare part b legislation in a naked attempt to purchase votes.

            of course, the current gang, who railed against such things (and drone attacks etc) are now thrilled to be wielding such power and seek to deepen it further.

            there is no moral high ground on team red or team blue, and even a well meaning faction be they blue dogs or libertarians cannot get anyhting done because of the nature of the prisoner’s dilemma.

            they can defect and go a third way, but that just splits a party and ensure that the one they like least wins (a la perot).

            i would love to have a solution and a roadmap out of the box we are in, but once the party apparatchiks are this entrenched, it would be easier to root the racial gangs out of a prison than get rid of these jokers.

            it is tempting think that there really ought to be a way to coalesce something fairly centrist and constitutional out of the middle of both parties and banish the red and blues to the fringes where they belong, but the reality seems to be just the reverse.

          • “yet that first side passed the “patriot” act, as nasty a piece of fascist legislation as i can recall and some truly awful medicare part b legislation in a naked attempt to purchase votes.”

            IMHO, the Patriot Act is overrated as a Big Brother boogie man. Agree Medicare Part D was a travesty, and I was against it, but it was the greedy geezers who demanded it after Bill Clinton and Al Gore started propagandizing for it. The Democrats had their own version ready to go that was 2x as expensive as the one that ultimately passed.

            The politicians may be out trying to “buy votes” as you put it, but only because the voter swine are so eager to put their votes up for sale. As Mencken put it, “People deserve the government they get, and they deserve to get it good and hard.”

            “…and even a well meaning faction be they blue dogs or libertarians cannot get anyhting done because of the nature of the prisoner’s dilemma.”

            You know what a blue dog is? It’s a Democrat that has a high NRA rating, but votes for Obamacare.

          • Paul

            IMHO, the Patriot Act is overrated as a Big Brother boogie man.

            Maybe so, but I find it hard to watch this without throwing up a little bit in my mouth.

            And I can’ think of anything more frightening than the idea of a government agency being able to write its own warrant, without any judicial oversight, to obtain information from my local library about what books I’ve checked out.

            Mind you the library can’t refuse, and they can’t tell me or anyone else that it’s happened.

            Please don’t say that if I’ve done nothing wrong I have nothing to worry about. We ALL should be worried about this.

            Agree Medicare Part D was a travesty, and I was against it, but it was the greedy geezers who demanded it after Bill Clinton and Al Gore started propagandizing for it. The Democrats had their own version ready to go that was 2x as expensive as the one that ultimately passed.

            While I agree about the greedy geezers, it’s hard to blame anyone for enjoying bread and circuses, or accepting a “free lunch”. I would, however, blame politicians who failed to justify such a monstrosity on constitutional grounds. It’s certainly not for the “general welfare”, as it only applies to seniors and not everyone. Of course it’s only one in a long line of such travesties.

            I think we are screwed.

          • paul-

            if you do not find the patriot act frightening, then i’m not sure what to say to you.

            just the banking provisions alone are surreally invasive and punitive. it literally changed banking for the whole world. anyone who touches the US is screwed. what do you think they used to pry open UBS etc?

            add to that the sheer, overwhelming latitude granted for secret and records search, warrantless surveillance etc and it’s a nightmare.

            it would be difficult to point to another piece of legislation that violates so many provisions of the constitution. section 215 alone beggars belief.

            team red loves the drug war too and the unconstitutional search and seizure laws that come with it. for purported protectors of property, they sure seem fine seizing it if you are even thought to be associated with a drug crime or someone might think that you might have thought about maybe being a terrorist.

            we can argue about who are the bigger dirtbags, hypocrites, and horrors as a government, and ultimately, i’d probably agree with you that team blue seems worse, but that does not make either one good. most frightening, we seem to be a in downward spiral, particularly in congress. bush 1 was worse than reagan, clinton was worse than bush 1, bush 2 was worse still, and now we have obama, worst of the lot.

            congress is even worse. there have been a few bright spots, but the current crowd is simply horrifying.

            add to that all the additions ashcroft and co rammed through about extra judicial detention and killing, extraordinary rendition, torture, etc and it’s pretty tough to line up behind team red. of course, now that they are in power, team blue sure seems to want to keel and expand all this powers they railed against so vehemently when they were in opposition.

            claims like “team A would have done something twice as bad as the terrible thing team B did” do not excuse or justify anyhting. we really need to aim a bit higher than “well, it was just a bite from a doberman, not a crocodile”.

            the supreme court died under fdr and we have been sliding into the abyss since. that was where the constitution was supposed to be defended.

          • Morganovich,

            Overall, I’d say we agree more than we disagree.

            “the supreme court died under fdr and we have been sliding into the abyss since. that was where the constitution was supposed to be defended.”

            And how did the voters react to FDR’s treachery? They re-elected him two more times. Somehow “The People” always get off scot free when blame is being passed around.

          • Paul

            And how did the voters react to FDR’s treachery? They re-elected him two more times. Somehow “The People” always get off scot free when blame is being passed around.

            You’re right, but I understand he offered jobs for votes, and I don’t know how long I could stand on my principles if my kids had nothing to eat.

        • “… if 2 parties come to dominate and through the rigorous enforcement of party lines efface cross cutting cleavages from the electoral bodies creating instead monolithic voting blocks, then we have already lost. such a system is not robust and becomes fractures, divisive, and dogmatic. that is that path to tyranny, not liberty.” — morganovich

          I’m wondering, did the divisive “cleavages” and “fractures” associated with the two party system result in greater or lesser liberty with regard to the issue of slavery? Women’s suffrage? Civil Rights?

          It seems to me that a multi-party parliamentary system, which supposedly allows for greater choice, can be far more tyrannical. Ruling coalitions under such a system often endow minority parties with far greater political power than their numbers would otherwise warrant. Even in the absence of political parties, the need for coalition in order to effect change can result in the imposition of extreme minority views.

          American political parties are often composed of competing factions working within a broader ideological framework. The “rigorous enforcement of party lines” within the Republican Party has allowed for the divergent views of Ron and Rand Paul, Susan Collins and Scott Brown, and Tom Coburn and James Inhofe. I’m sure that one could draw the same type of ideological lines with regard to factions within the Democrat Party.

          The power and influence of factions within the two parties waxes and wanes over time. The ideas and causes of broader political movements within society at large are often adopted by the parties, if those ideas find traction with a large part of the general public. The fact that no political party represents the kind of ideological purity that any one individual may ascribe to does not mean that they are without purpose or necessarily represent a threat to our liberty.

          Far greater threats to our liberty are manifest in the one party nature indicative of our media, educational and other cultural institutions. Political outcomes are often simply the expression of education and culture and have nothing to do with the way that people choose to organize themselves politically.

          • che-

            1. you cannot compare a parliamentary system to our in the way you seek to. they are set up in completely different ways.

            2. i think you misunderstand what i mean by cross cutting cleavages. i mean that you and i may each have 10 opinions on 10 topics. to the extent that we agree or disagree on all 10, we have few or no cross cutting cleavages. that is to say, we are in opposition or agreement ob everything.

            if we agree on 5 and disagree on 5, then we have numerous cross cutting cleavages. i am in a coalition with you on tort reform but disagree about unions or whatever.

            the issue with a 2 party system is that it is the party, not the individual rep that sets a platform. it forces compliance through money, bullying, ostracization, etc. you vote the part line or you are really in for it.

            this takes all the diversity out of a system of government and makes it non representative.

            even if the majority of people are, say, fiscally conservative and socially liberal, such an agenda cannot ever emerge as neither party will allow such and the reps that get elected overwhelming cannot do so without the party and cannot get meaningful posts without the party.

            it forces monolithic behavior.

            if an economy has only 2 possible business models, it is not robust and winds up very fragile and poor.

            why would politics be different?

            forced adherence to party lines means that there is no diversity and no ability for fluid and cross cutting coalitions to build.

            i did some considerable work on the politics of divided societies as an undergrad and looked at ways to set up governance in places like cypress, northern ireland, south africa, etc to figure out how to prevent ethnic majorities from becoming tyrannical. it was always the political parties that made this so difficult.

            when tribe = party = monolithic voting on every issue, you get a very nasty, divided society.

            a quick perusal of the last US election reveals just how tribal we are becoming and i think few would argue that we are not undergoing some of the nastiest partisan politics in generations.

          • i’m not sure i explained that very well. let me try again.

            imagine a parliament with 100 seats. (note that this works even better if we call it an economy with 100 companies)

            there are 2 extremes:

            1. all 100 members belong to one party.
            2. none of the 100 members belong to a party and each makes up his/her own mind about each issue without regard to what others choose.

            i system 1, we have a situation like a communist country. the parliament is basically a rubber stamp for party leaders.

            if we split it to 2 parties, at least we get some choice (unless one is far larger than the other, but this rarely persists as the smaller one will adjust its platform and drive toward parity except in cases of overpowering ethnic affiliation)

            if we add a 3rd party, we may or may not get more choice and representation. it can be hard to tell at low numbers. we might also get a small group that wind up vastly overrepresented.

            lets’ say we have 45% conservatives, 45% socialists, and 10% green. green becomes a kingmaker and tends to get disproportionate voice. of course, one of the other parties might adjust to this too and decide the greens are too difficult and change their platform to become more inclusive (or to buy more voters) and get to 51% by itself. such a possibility tends to keep green demands in check as a coalition partner.

            thus, there is really no way to be sure if going from 2-3 is better, worse, or indifferent. frankly, going to 10 does not matter if the big 2 still have 90%.

            to get the real advantages of cross cutting affiliation and the robust and collaborative system it creates, you need to have the majority more broken up.

            if we had 4 parties of 30/30/20/20 now you have some real coalition building to do. you need either the 2 biggest or 3 of 4 to govern.

            we can see how moving from 2 to several, as in germany, has led to some considerable stability. no group holds even 1/3 of the seats in the bundestag and 6 hold over 10%.

            italy, by contrast, has 2 parties that comprise over 70% of the seats, and cannot keep a government in power on a bet.

            if you have 10 parties each with 10%, you get far more flexibility and fluid as opposed to static coalitions. of course, it can also be difficult to get things done. (though one can argue that would be a feature, not a bug)

            the issue in a democracy is that government has the power to take from others against their will and give to the folks who voted for it. this creates a sort of state of nature where you need a gang to survive the predation of the other gangs.

            i do not think there is any way consistent with basic liberty and freedom of association to prevent gang formation in a democracy nor the predatory practices and nastiness that comes with it.

            this is precisely why i i dislike the granting of much power to anything democratic and view liberty as coming from rights. pure democracy is just a particularly nasty form of tyranny.

            for all that we focus on the executive and legislature, it was the supreme court that was always the most important branch of us government and it is there that we have lost the battle for liberty.

        • “While I agree about the greedy geezers, it’s hard to blame anyone for enjoying bread and circuses, or accepting a “free lunch”.

          Once it becomes law, yeah, you’d be stupid to not indulge. But you’d be an ethically bankrupt cretin to demand it in the first place, and then defend it as a birthright once it becomes a reality.

          “I think we are screwed.”

          Agreed. We lost the war. We’re simply negotiating the terms of surrender now.

    • You’re not following Liberal Logic very well. Someone who earns the minimum wage is presumed to be capable of making decisions as to whether he should have a family. But he is incapable of deciding how big a soda to buy or whether a teeter-totter is safe. Got it?

    • Two people who earn minimum wage could have a combined income of $29,000. In many parts of the U.S., it is possible for a family of four to live on $29,000 a year. Think it’s not possible to raise two kids if both parents are working? Millions of Americans have done so. They do so by: working different shifts; getting relaitves to look after the kids; finding inexpensive day care arrangements.

      American liberals would designate the lifestyle of a $29,000 family as “poverty”. But that lifestyle would likely represent a better standard of living than that of 2/3 of the earth’s population.

      • And those folks are not likely to remain at that low income level for long. Opportunities abound for those with that kind of common sense, determination and a willingness to work hard. They don’t need a higher min wage that could result in one or both of them becoming unemployed.

    • And, of course, the “poverty line” is completely arbitrary as well. Maybe they could throw two darts every year. One for the poverty line, and one for minimum wage. It would likely work as well as the current system.

  2. Washington state ranks #1 in minimum wage and #5 in youth unemployment.

    The WA state legislature is now considering the “Washington State Training Wage Bill”

    The Training Wage Bill would allow employers to pay 75% of minimum wage. The sponsor of the bill, Rep. Cary Condotta, says: “We have an extremely high unemployment rate for youth and the idea is, is to re-open these entry level training positions…”. Rep. Condotta is a Republican.

    • The trouble with that Training Wage idea is that it requires those who vote for it to admit that the min wage increases they voted for every year for the last 13 years has harmed unskilled entry level workers. Rep. Condotta admits as much when he claims his bill will “re-open those entry level training positions”.

      While more palatable than an outright call for eliminating min wage, this may be a tough sell.

      If I were cynical (and I am) I would wonder who Rep. Condotta’s financial supporters are, and what they would gain from passage of this bill. While unskilled teens might be potential voters, they aren’t likely to be financial supporters.

        • Well, he certainly doesn’t seem to be particularly popular with anyone based on that collection of token contributions. Is he supported by any PACs?

          It’s possible he’s actually one of the good guys, but there are so few of them!

          His voting record looks fairly good, although he has voted for some things that grow the size of government.

          OK, I will remove him from my “can’t be trusted” list – for now. :)

  3. I’m sorry, but you’re correct and wrong. While many workers do make more than minimum wage, they’re not making much above minimum wage. The many shitty jobs I have had paid a quarter above the minimum wage. I’d like to ask you, commentator, what percentage of workers you cite are making a living wage?

    • Why did you have many jobs which only earned $7.50 an hour? Did you not learn skills at any one of those jobs? skills which would have qualified you for a better-paying job? If not, did you consider going to a trade school to acquire such skills?

    • Here’s some real data about wages in some of the lowest wage occupations in the U.S.. From the Bureau of Labor Statistics:

      Cashiers
      number – 3,314,870
      median wage – $9.05

      Retail salespersons
      number – 4,270,550
      median wage – $10.10

      Office clerks
      number – 2,828,140
      median wage – $13.07

      Customer service representatives
      number – 2,212,820
      median wage – $14.72

      Janitors and cleaners
      number – 2,068,460
      median wage – $10.75

      Nursing aides and orderlies
      number – 1,466,700
      median wage – $11,63

      http://www.bls.gov/oes/current/oes_nat.htm#41-0000

      If you’re not satisfied with your current job, Enrique, perhaps you should try on of the low-skilled occupations above. All seem to be paying more than the $7.50 you’ve been making.

  4. The funny thing is that people who make 15K do pay Federal Tax unless they have kids.

    15K – 5900 (std ded) – 3800 (exemp) = 5300 subject to tax of 10% = 530.00 (minus the EIC).

    The earned income credit that Ronald Reagan hugely supported is what tips the scales for those in the lower incomes especially if they have kids.

    $46,227 ($51,567 married filing jointly) with three or more qualifying children

    $43,038 ($48.378 married filing jointly) with two qualifying children

    $37,870 ($43,210 married filing jointly) with one qualifying child

    $14,340 ($19,680 married filing jointly) with no qualifying children

    the EIC is graduated so if you think about it – increasing the minimum wage might actually reduce the earned income credits which currently costs about 80 billion in expenditures in the budget.

    so increasing the minimum wage might wipe up 80 billion in the budget, eh?

    • No, Larry. Raising the minimum wage to $9.00 will just wipe out jobs. Some employers will find ways to automate the jobs. Some employers will offshore the jobs. Some employers will decide that the increased cost of labor will just make their business too unprofitable to stay open.

    • To raise the minimum wage to a level to “wipe [out] 80 billion [EITC] in the budget,” it would probably have to be a $15 minimum wage. Maybe more.
      QUESTIONS:
      * Who pays for the massive unemployment that would follow?
      * Would the damage perchance exceed the $80 billion “saved”?

      • re: who pays

        well.. in our society.. if someone works a lifetime and barely makes a living wage – we take care of them when they need health care, food, and then no longer can work.

        the question is – is it cheaper to have a minimum wage and pay less lifetime entitlements or the other way around?

        honest question.

        • the question is – is it cheaper to have a minimum wage and pay less lifetime entitlements or the other way around?

          honest question“…

          No its a stupid question, one you’ve been schooled in dozens of times…

          • re: ” No its a stupid question, one you’ve been schooled in dozens of times…”

            “schooled” by those who have biased libertarian agendas is not “schooling”.. it’s just more blatant propaganda masquerading as something besides junk.

            besides.. according to folks like you Juandoze the whole damned world is wrong… so I’m in good company.

          • “schooled” by those who have biased libertarian agendas is not “schooling”.. it’s just more blatant propaganda masquerading as something besides jun“…

            You really take an inordinate amount of pride in your abysmal ignorance don’t you larry g?

            See if you can find someone who isn’t as delusional as yourself and maybe they can explain the following to you: Why Don’t People See

  5. The information you present in the article is incomplete.

    One can’t know how many workers wages would be increased by a minimum wage law if you don’t report the percentage currently make less than the newly proposed minimum.

    Please update the post to include numbers of workers making less than 9/hour. Otherwise the discussion will remain incomplete.

    • More

      Even if you do the work as John Dewey suggests and provide us with a number, it won’t necessarily reflect the actual number of workers whose pay would increase, because we can’t know in advance how many of them would remain employed.

      But it should be interesting to see what number you come up with. Thanks in advance.

  6. Where is Peak Trader’s obligatory pasted comment on this issue? I’m anxious to see that up-sloping demand curve for labor once again.

  7. Twenty states – including California, where 1 in 7 Americans live – currently have a minimum wage rate above the federal minimum wage rate. That fact alone completely undermines the point this article is trying to make.

  8. What this author fails to realize is that teenagers aren’t getting the jobs they used to. Hamburger flippers these days have 2 kids, a mortgage, food bill and college debt. Teenagers are vastly unemployed. And yes, employers will pay .25 more than minimum wage and it’ll be counted technically by the definition; that the wage is not the minimum wage – but pretty darn close. .25 more doesn’t qualify as a “living” wage.

    • Beth,

      Please look at the median wage data from the Bureau of Labor Statistics I provided above. Employers are paying more than 25 cents above the minimum wage for cashiers, for retail salespersons, for hospital orderlies.

      As for your argument about “living wage”, I have to assume that everyone who is working at whatever wage in the U.S. is actually living. Perhaps not living the lifestyle you believe they should be living. But they are living a better lifestyle than at least 2/3 of the people on the planet.

    • Beth

      While a person’s life and their choices are certainly their own, and I wouldn’t advocate interfering in those choices in any way, one can’t help but have their own private thoughts and questions as to why and how a hamburger flipper gets a mortgage in the first place, and why they have that, two kids and college debt all at the same time without a higher paying job? Are they just stupid, or what?

      And no, teenagers are, regrettably, denied the jobs they used to get, in part because other folks, who aren’t directly involved have demanded and gotten child labor and work limit laws and minimum wage laws that prevent a teenager from learning the basic job skills they will need when they enter the full time work force.

      On your other subjects, I have to ask why you don’t believe an employer should be able to pay an amount at which they value the job, and at which they and a willing employee agree? Do you or someone else know better than the parties involved what the correct wage should be?

      Then there’s that “living wage” bugaboo. Just what, exactly, is a “living wage? I think it has vastly different meanings to different people. Do you or someone else other than the parties involved have some special knowledge about this that’s denied to the rest of us?

  9. “Hamburger flippers these days have 2 kids, a mortgage, food bill and college debt.”

    And how did that become our problem? If you have 2 kids, a mortgage and a college degree and the best you can do is a job flipping burgers then you have made some horrible life choices.

    But you position is that forcing others to pay you $9.00 an hour will solve those problems?

    • re: ” And how did that become our problem? If you have 2 kids, a mortgage and a college degree and the best you can do is a job flipping burgers then you have made some horrible life choices.”

      on this I agree. But the tax code, entitlements and even public education encourage it.

      tax code: EIC – a refundable credit:

      $5,891 with three or more qualifying children
      $5,236 with two qualifying children
      $3,169 with one qualifying child

      plus another $1000 tax credit per kid

      plus free public education
      plus free food stamps
      reduced or free school lunches
      free health care – SCHIPS and MedicAid

      check out this CBO chart that details these entitlements and their costs to the general fund:

      http://www.cbo.gov/sites/default/files/cbofiles/attachments/43907-BudgetOutlook.pdf

      and don’t blame just the Dems… none other than Ronald Reagan and other GOP support these things to “help” kids.

      but yes – if you look at the tax code as well as the enumerated list of entitlements to include public education, the government is encouraging having kids even if you cannot afford them – they’ll just let others pay for them.

      At the local level in most places in the US, the largest entitlement by far, bar none is public education – at the rate of 10,000 per kid – gratis from those who do not have kids as well as businesses who pay hefty taxes to help fund local schools.

      this situation is similar to the idea that National Defense is a constitutional justification for a Central Govt then when you add to it the idea that – that central govt is elected govt – then if enough people agree to add new stuff to the original central govt mission – then it happens.

      same thing with education – if you decide that public education is a public good that we all pay for – then when others say that kids need, in addition to education, health care, food, shelter, etc, we expand than mission.

      Every one of these entitlements has a voting constituency – at the local level – enough supporters of public education exist to provide far, far more than just basic academic education. It extends to all manner of elective courses and extracurricular activities like many different kinds of sports, band, proms, etc, etc… and it shows -because we pay more than most other countries for education – and because we also focus resources on more than core academics – our core academics themselves lose priority to all these other extras that parents and kids want – way beyond what the original premise that led to Public Education was based on – core academics – reading, writing and arithmetic.

      we have met the enemy and….

      I know very, very few people that are opposed to ALL entitlements including Public Education… most folks who say they are opposed to entitlements – are opposed to the entitlements they don’t need.

      So you can have mostly white middle-class parents of kids who receive entitlements being totally opposed to entitlements for geezers or minorities receiving entitlements – and vice versa..

      • Larry, education isn’t a public good. It doesn’t meet the description, which has a clear economic definition. You can’t just “decide” that something is a public good. Food, shelter, education, health care, etc. are not public goods.

        You can decide to take money from everyone to pay for them, but they don’t become public goods.

        • re: public goods

          are there different views of what public goods are and are not? I seem to find some sources that believe that universal education is – that all of society including those that pay for it – benefit from it.

          if public education is not a public good is it instead a wealth transfer or what?

          what happens if a majority of people consider public education a pubic good regardless of the pure economics definition?

          • are there different views of what public goods are and are not?

            No there are not. They are clearly defined for a reason. Did you read the reference I gave you?

            A public good is something that is nonexcludable and nonrivalrous.

            That means that you cannot provide that good to some while denying it to others. National defense is such a good. You cannot defend some people in your country from invasion without defending everyone. At the same time, more people being defended doesn’t lessen the amount of defense anyone else gets.

            A view of the full moon would be another example. Each person gets full enjoyment no matter how many other people view it.

            I seem to find some sources that believe that universal education is – that all of society including those that pay for it – benefit from it.

            That has nothing to do with whether or not it’s a public good. Not everyone can get a public education so it’s excludable. More importantly it is rivalrous because adding students means you must increase the supply of the good, therefore it’s not a public good.

            f public education is not a public good is it instead a wealth transfer or what?

            Yes. It transfers wealth from those who have produced it to those who haven’t. The few benefit at the expense of the many.

            what happens if a majority of people consider public education a pubic good regardless of the pure economics definition?

            Nothing happens. Calling a dog a cat doesn’t make it so.

          • re: ” That has nothing to do with whether or not it’s a public good. Not everyone can get a public education so it’s excludable.”

            if it is universally available to every child, it’s still not?

            not sure of the distinction here between national defense and public education although I acknowledge they are not exactly the same.

            how about natural disaster response?

          • if it is universally available to every child, it’s still not?

            Read the definition at the link I gave you earlier. public education is not a public good.

            not sure of the distinction here between national defense and public education although I acknowledge they are not exactly the same.

            Read the definition at the link I gave you earlier. National defense is a public good, public education is not.

            how about natural disaster response?

            Read the definition at the link I gave you earlier. Natural disaster response is not a public good.

            Here’s what wiki says about public goods.

            “In economics, a public good is a good that is both non-excludable and non-rivalrous in that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.[1] Examples of public goods include fresh air, knowledge, lighthouses, national defence, flood control systems and street lighting.”

            “A fireworks display is a public good because it is non-excludable (impossible to prevent people from using it) and non-rivalrous (one individual’s use does not reduce availability to others).”

          • I’ve read the link before and now again.

            if public education is universally accessible to kids and the law requires that each kid get equivalent resources then how is it different from say flood control which is clearly not universally available to all.

            re: wiki: ” … and education are commonly misclassified as public goods, but they are technically classified in economic terms as quasi-public goods because excludability is possible, but they do still fit some of the characteristics of public goods”

            how is “excludability” possible in a country where every child has automatic access to education, and in fact, is required to get an education?

            I think the pure definition does not include countries that have policies of universal accessibility and saying that things like street lights, light houses and fireworks are a public good seems bizarre because they are not “free” to the folks who pay to provide them even if free riders perceive them as “free”.

            as with so many other examples – you have a basic theory that assumes no “interference” from external things like govt or greed.

            in practice – lighthouses are not truly public goods nor are fireworks because both cost someone money and in reality both are wealth transfers to those who benefit but don’t pay. That’s why light houses are often built by governments and not individuals trying to be charitable.

          • I think the pure definition does not include countries that have policies of universal accessibility and saying that things like street lights, light houses and fireworks are a public good seems bizarre because they are not “free” to the folks who pay to provide them even if free riders perceive them as “free”.

            Tell me honestly, Larry, are you just pretending you don’t understand this, and are you just trying to be disagreeable about this?

            as with so many other examples – you have a basic theory that assumes no “interference” from external things like govt or greed.

            Ahh. One of your standard responses when you are out of meaningful things to say. there are no theories here, Larry, only a standard, universally understood definition of an economic concept.

            Will you now ask me how many developed countries in the world use this definition? All of them do, Larry.

            in practice – lighthouses are not truly public goods nor are fireworks because both cost someone money and in reality both are wealth transfers to those who benefit but don’t pay. That’s why light houses are often built by governments and not individuals trying to be charitable.

            Check that wiki article again. It’s pretty good on this subject.

            The term “public” in public good refers to who enjoys the benefit, no matter who provides it or who pays for it. Public goods aren’t necessarily free, and may not be available to everyone, everywhere. That’s not part of the definition. You’re getting further away from the meaning of the term “public good”.

            A dam built for flood control isn’t free. A beautiful sunset is. Both are public goods. The flood control provided by building a dam can’t be denied to some people downstream if they don’t help pay for it. Everyone downstream benefits. The good is nonexcludable. No matter how many additional people build houses downstream of the dam, the amount of flood control is not diminished for anyone already there. It is nonrivalrous.

            The sunset is available to anyone who chooses to look at it, and who has a line of sight view of the western sky. Your enjoyment of the sunset isn’t diminished by thousands of other people choosing to look at it also.

            This is pretty straight forward, Larry. I can’t think of any simpler way to explain it. I’ve given you references, and you can find plenty more on your own. Figure it out.

      • Larry, Education is an investment good. One example is that parents have always been ahead of the curve on the education of their children. Before there were public high schools there were private acadamies for all income levels. The child labor laws were preceded by a preference of parents to send their children to school because they themselves knew they couldn’t find a job without basic skills.

  10. Raising the minimum wage to $9 an hour will have a very small positive or negative economic effect (which I’ve shown before and supported empirically), and have a huge positive political effect for politicians like Obama.

        • You mean raising wages, e.g. to 30 cents an hour in Haiti, attracts better workers.

          That would be YOUR argument, based on unemployed Haitians having a high reservation wage.

      • Conservatives don’t care a whit about teenagers or unemployment.

        In fact, conservatives like unemployment.
        It keeps workers desperate.

        Everyone knows these conservative protestations are nothing more than crocodile tears.

        • Everyone knows these conservative protestations are nothing more than crocodile tears“…

          You of course of some credible information to back up that inane statement up, right pylonboy?

  11. John Dewey says: “…about “living wage”, I have to assume that everyone who is working at whatever wage in the U.S. is actually living.”

    And Cutler’s CEO said when asked if the 28-cent-an-hour wages they paid in Haiti were subsistence wages:

    “Well, the workers are alive aren’t they? So they must be subsistence wages.”

  12. Peak

    And Cutler’s CEO said when asked if the 28-cent-an-hour wages they paid in Haiti were subsistence wages:

    “Well, the workers are alive aren’t they? So they must be subsistence wages.

    OK, now that I’ve wiped away the tears I have to ask: Couldn’t those Haitian workers, if they were unhappy with a 28 cents/hr wage, gone back to whatever they were doing, or continued doing what they were doing before Cutler came along?

      • Peak

        You mean starving or being a slave?

        Yeah. Those are the only 2 possible choices. Farming, fishing, picking through the dump and prostitution are all vocations that are denied to Haitians.

        Compared to starving or slaving, $0.28/hr sounds like a fortune.

        By the way, you’re aware that a slave makes subsistence wages, right?

          • If that’s true, why were so many replaced by machines?

            Incentives matter. A slave has no incentive to work any harder than necessary to survive, as they see no future. A free person making the same equivalent subsistence wage can strive for a better future and will work toward it.

            You could always hire some Haitians yourself, and pay them whatever you wish.

  13. Mark,

    What are the numbers if you include the workers earning between minimum wage and $2 more?

    Because chances are that if you increase mw you will also increase their pay.

    • Moreover, it’s possible, you’ll increase real GDP. I stated before:

      The higher wage attracts better workers, with higher reservation wages, to increase productivity.

      Minimum wage workers have high marginal propensities to consume. So, a higher minimum wage increases consumption.

      Only a portion of the higher minimum wage may be passed along in higher prices, because portions will be absorbed by “excess” wages of other workers and “excess” profits.

      Weak or poorly managed firms will lose business or fail. However, stronger or better managed firms will gain their business, and also gain from the increased demand.

      • There is is at Last!!

        Thanks Peak.

        And as an extra bonus, there’s this nonsense!

        Only a portion of the higher minimum wage may be passed along in higher prices, because portions will be absorbed by “excess” wages of other workers and “excess” profits.

        Didn’t you say you studied economics?

        • You know I did or should know.

          Has the disparity between upper and lower income workers increase or decrease?

          Are profits above or below the historical average (e.g. compared to GDP)?

          Economies aren’t static. In the 1960s, union workers were grossly overpaid and non-union workers were grossly underpaid.

        • You know I did or should know.

          I know you have claimed great econ chops, but sometimes your comments don’t reflect it.

          Has the disparity between upper and lower income workers increase or decrease?

          It has increased, and that’s a good thing. It means there’s more opportunity for low income workers.

          Are profits above or below the historical average (e.g. compared to GDP)?

          Profits are above historical averages, which is a good thing.

          Economies aren’t static. In the 1960s, union workers were grossly overpaid and non-union workers were” grossly underpaid.”

          As you would expect. Some can only make higher wages at the expense of other workers at any given time. Just like min wage. If you increase the price, demand drops, unlike in the Peak Trader Labor Model.

          The real minimum wage is lower today than in the 1960s.

          Good. That means more opportunities for unskilled entry level workers. However, it apparently isn’t low enough, as there is high unemployment in that group.

  14. When I read the BLS tables, I read that 3.8 million workers over the age of 16 earn hourly rates at or below the minimum wage. This is more than 0.6% of the workforce. Are you excluding those below the minimum wage because many (not all) work in the service field with the potential (not guarantee) for tips that exceed the minimum wage?

    • I’m looking at “full-time workers” because those are the workers that Obama specifically mentioned in his speech.

      In 2011, there were 112,564,000 Americans working full-time, and 111,821,000 of those workers, or 99.4%, were earning more than the minimum wage. Only 743,000 of those full-time workers were earning the minimum wage (or less), or 0.66% of the full-time workforce.

  15. It would be politically feasible to eliminate the minimum wage if, instead of printing $89 billion a month and giving it to the banks, the government were to make a payment $1000 to each employed person.

    This would ensure every worker a living wage, and it would create a pool of cheap labor that would make it possible once again for Americans to make shoes and shirts, car parts and computers for one another, rather than buying everything from China or elsewhere.

    The increase in GDP would swell government revenues and substantially cut welfare spending, and the costs of crime, incarceration of criminals, mental illness, etc. that are associated with unemployment.

    As necessary, some portion of the cost of the program could be clawed back with, say, a 10% surtax on incomes from 12 to 132 K.

    • Hopefully that’s sarcasm – it’s hard to tell in blog comments.

      If not, you should be aware that this is an *economics* blog, so you might want to write something that makes economic sense.

        • Not at all. I had hoped you were joking. Your failure to understand the role of money makes your whole comment nonsensical.

          What do you think giving each employed person an extra $1000/mo in counterfeit money would do to retirees living on savings and investments, or unemployed teens, or anyone else who isn’t employed for whatever reason?

          We produce goods and services and exchange them with others for their goods and services. Money is only
          a convenient medium of exchange in these transactions, and represents something of value, but has no intrinsic value.

          If an extra $1000/mo would be good why not make it $100.000/mo? We would all be incredibly wealthy in no time and no one would need to work anymore, right?

          • Oh, I thought you had seen an irremediable flaw in the argument, but in fact you merely make a number of unjustified assumptions.

            First, I did not advocate counterfeit money, although since the Fed is currently counterfeiting, as you would say, $89 billion a month to buy treasuries, I suggested using that money for the purpose I proposed.

            In fact what I proposed is a version of Milton Friedman’s negative income tax, a scheme that he abandoned chiefly because it seemed to require a high marginal tax rate on those earning just above the minimum wage, unless one were to extend the benefit to everyone.

            The modification I have proposed is to extend the benefit to everyone and claw it back from those with higher incomes rather gently. Of course that makes it costlier, but if you are pissing away $89 billion a month anyway, why not do something useful with it.

            And if, by means of such a scheme, you get some tens of millions of part-time workers into full-time work and you get several tens of millions of unemployed and discouraged workers back into the work force you recover much of the cost through savings in many other programs, while significantly growing the economy.

            A comment on a blog is no place to do the numbers but they are not as outlandish as you might suppose and would not necessitate money printing.

            Canada, has a rather similar program for the elderly, a payment of around $500 a month to which everyone is eligible, but which is clawed back 100% from those with incomes in excess of I think it is $95,000.

            Canada does this without printing any money, and thereby reduces the number of the elderly who are in dire poverty. It seems reasonable to do the same for those of working age, on condition that those who are able bodied, actually work.

          • Oh, I thought you had seen an irremediable flaw in the argument…

            I did. You have confused money with income. You have suggested that more money by itself, not related to any production of something of value will somehow make everyone more prosperous.

            Perhaps you are relying on the tired old Keynesian notion of “stimulus”, which can’t possible cause more than a temporary increase in economic activity, but which advocates hope will cause that stalled engine to magically roar back to life. It should be painfully obvious by now that stimulus isn’t working as hoped in the US, but the neo-liberal economic policy acolytes won’t admit failure and keep pouring $89 bn/mo onto that hole in the ground so that when the US economy actually DOES return to normal – if ever – they can claim credit.

            …but in fact you merely make a number of unjustified assumptions.

            What are those unjustified assumptions? You didn’t list or address any of them. You only objected to my use of the word *counterfeit*, but I’m unable to find a better word to describe the creation of money out of thin air. If you or I did it, we would go to prison.

            “First, I did not advocate counterfeit money, although since the Fed is currently counterfeiting, as you would say, $89 billion a month to buy treasuries, I suggested using that money for the purpose I proposed.”

            How does handing people more money make them richer? I would expect that it just dilutes the value of the money they already have. Just as with any other commodity, if you increase the supply without a higher demand, the price will drop.

            The only way to produce more of something is to produce more of something. The money is only a medium of exchange.

            In fact what I proposed is a version of Milton Friedman’s negative income tax, a scheme that he abandoned chiefly because it seemed to require a high marginal tax rate on those earning just above the minimum wage, unless one were to extend the benefit to everyone.

            Friedman advocated a graduated negative income tax, similar to to the current US Earned Income Credit as a replacement for all other assistance programs. He didn’t think it was a good idea, only a better idea.

            And, as you pointed out, he abandoned that idea when he grew up and realized that it was just social engineering in the form of income redistribution and there was no good economic argument in favor of such a scheme.

            The modification I have proposed is to extend the benefit to everyone and claw it back from those with higher incomes rather gently. Of course that makes it costlier, but if you are pissing away $89 billion a month anyway, why not do something useful with it.

            And where will that money come from eventually? Will we all just become richer by fiat? You need to explain how that will work.

            And if, by means of such a scheme, you get some tens of millions of part-time workers into full-time work and you get several tens of millions of unemployed and discouraged workers back into the work force you recover much of the cost through savings in many other programs, while significantly growing the economy.

            That sounds a lot like the stimulus argument. Where oh where will the actual value come from? You’ve figured out the money part, but where’s the rest?

            A comment on a blog is no place to do the numbers but they are not as outlandish as you might suppose and would not necessitate money printing.

            Actually a blog comment seems like an ideal place to do the numbers. How complicated can it be? How about putting them up at YOUR blog? if your afraid of offending our host here, but I can tell you he tolerates, some pretty long posts. Surely this isn’t rocket science.

            Canada, has a rather similar program for the elderly, a payment of around $500 a month to which everyone is eligible, but which is clawed back 100% from those with incomes in excess of I think it is $95,000.

            Just another entitlement program, but without the pretense that people have earned it as is the case with Social Security benefits in the US.

            But other than redistributing income, how does that Canadian program produce increased prosperity and economic growth like the program you’re proposing?

            Canada does this without printing any money, and thereby reduces the number of the elderly who are in dire poverty. It seems reasonable to do the same for those of working age, on condition that those who are able bodied, actually work.

            Newsflash: Socialism hasn’t worked well anywhere it’s been implemented. Your “on condition that those” is the problem. No one will work as hard for others as they will work for themselves. Incentives matter.

  16. One aspect of the minimum wage is seldom discussed — many earning minimum wage ALSO receive tips. Many states mandate a full minimum wage for such workers. In CA we mandate a $8 wage.

    Hence in CA we have waiters easily making $15-$30 (or more) an hour. That’s why you’ll find so many college educated people waiting on you in CA restaurants — a huge misallocation of human capital. And this was going on BEFORE the recession hit.

    And catch this — states requiring minimum wage for such “tip” employees force restaurants to raise their food prices. Given that 15% is the minimum “non-insulting” tip expected, patrons are expected to pay a tip on the minimum wage of the employee (hidden in the restaurant bill).

    Thanks to quality prepared dishes available in Costco and grocery stores, my family seldom eats a “sit down” meal outside the home any more.

    That trend doesn’t bode well for restaurants and their employees. Oh well.

    • Uhh employees that make tips like waiters and bartenders are exempt from minimum wage because it is assumed they will make it in tips. Most make around $2 per hour without tips. A bartender that never gets tipped would actually end up making negative money because they are charged for every drink they pour.

      • Russian, it varies from state to state. In CA, tipped employees get the $8.00 minimum wage PLUS tips.

        Your assertion is the application of common sense, as opposed to labor law. I like your version better!

        • Ok, I didn’t realize that about California waitstaff, looking into it more I found out they are taxed at a higher rate because it is assumed that they are getting a large amount of unreported cash income.

  17. In addition, let’s remember all the welfare subsidies for low income families. These many benefits combined with a modest wage provide a comfortable living. TOO comfortable.

    Moreover, earning more reportable pay results in less benefits, amounting to a 100% or MORE tax in increases in salary up to $65K or more.

    • What one surely want’s to do is incentivize work. Therefore, any benefits for the able-bodied should be conditional on accepting work. With a guarantee of a living wage for full-time work, most welfare payments can be eliminated.

      • With a guarantee of a living wage for full-time work, most welfare payments can be eliminated.

        How do define a “living wage”? It means different things to different people don’t you think?

        And what if someone is unable to produce a value to an employer equal to or greater than the “living wage” they must be paid? Who will subsidize the worker, the employer? The taxpayers?

        • How do define a “living wage”? It means different things to different people don’t you think?

          I defined it, implicitly, at around the mimimum wage for a full-time job. Define it some other way if you want. Who cares? Obviously its not some fundamental concept. Its a term that has a practical and political definition that must be seen by most people as more or less reasonable –if it is to be accepted as a working definition.

          And what if someone is unable to produce a value to an employer equal to or greater than the “living wage” they must be paid?

          That is the point of guaranteeing a “living wage” to everyone who has a job. They then have a chance to be paid paid the value of their labor down to zero plus one cent. What’s so difficult about this?

          • I defined it, implicitly, at around the mimimum wage for a full-time job.

            Of course the minimum wage is an arbitrary amount pulled out of the air by politicians, so that’s no help.

            Define it some other way if you want. Who cares? Obviously its not some fundamental concept.

            Hmm. Obviously not.

            Its a term that has a practical and political definition that must be seen by most people as more or less reasonable –if it is to be accepted as a working definition.

            Wow. That’s really vague. I still don’t have any idea what a living wage is, or why it’s called a living wage. Apparently it’s just a buzzword politicians can use to show that they’re compassionate. Some amount others have decided a person can live on, irregardless of their actual needs or circumstances.

            That is the point of guaranteeing a “living wage” to everyone who has a job. They then have a chance to be paid paid the value of their labor down to zero plus one cent. What’s so difficult about this?

            But who pays for this “living wage? Obviously there can be a difference between what a person produces and what they’re paid. Who makes up that difference?

      • Good deal. So all we have to do now is decide how much “living wage” is and we can eliminate poverty. it seems so simple.

        So how much is a ‘living wage” for one person?

        Will the “living wage” be the same everywhere in the USA? The COA for someone living in NYC is 2.5 times as much as someone living in rural TN. San Francisco is obviously much more expensive than Wyoming. So what’s the plan.

          • Yeah, best not to wrestle with such questions. Just let the poor rot.

            Not at all. We are free to help those who are in need in any way we wish – with our own resources. You, for example can hire as many unskilled workers as you wish and pay them whatever you consider to be a living wage, and I will help people I feel need my help in the way I think best. Just keep your grabby hand out of MY pocket, and I’ll do the same.

  18. A higher minimum wage will lead to a burst of innovation in automation, robotics, and information technology.

    Before, a Robot had to be cheaper than $7.25/hour. Now the robot only has to be cheaper than $9/hour.

    The Baxter robot costs $22,000, but can work for $1/hour (since it can operate almost 24/7). A higher minimum wage increases robot sales, and thus more innovation in automation and robotics…

    As often is the case with leftists, the outcome of their ‘policies’ usually have exactly the opposite effect that they claim it will. Worse still, they don’t care.

      • You must do wonderful work with the poor and the disadvantaged“…

        Well here’s your chance pylonboy to step up with your money and help those who you have supposedly have compassion for…

      • Yes I do wonderful work with the poor and disadvantaged. I’m starting a new business that will require 3 low skilled or unskilled workers. Imagine that – I’m creating 3 new jobs! What could be better than that?

        Maybe you think I should just hand them the money instead, eh?

  19. Im tire of everything blamed on Bush he is no longer if office .. who is.. who raised the taxes by trillions.. who made housing market crash who said they were going to cut the deficit by HALF a political promise for election. all this and I loss my 24 year career job at the largest toy retailer to be replace by a kid. why because I MADE TOO MUCH MONEY>… now I have to suffer through food bank and part time min wage jobs to raise 3 teenage kids through college and a x husband that dont want nothing to do with them nor pay the proper support for all three he emancipated them all so he wouldnt pay support .. soon the my sons and I will be on the street because THE RAISING TAXES ARE NOT HELPING THEY ARE KILLING US

  20. Hence the growth in unpaid “Internships” in many of the artistic/creative industries for students who do actual, valuable work over the summer to get the boost up the economic ladder.

    With no minimum wage laws, these jobs might actually pay something (probably not $10/hour), but under current laws, they are not allowed to pay anything less. And don’t forget that it costs an employer a LOT more than $400 to pay an employee $400/week.

    • re: public goods

      lighthouses paid for by taxes
      schools paid for by taxes
      fireworks paid for by taxes

      I DID read the links provided and I DO understand the concept of a sunset or clean air or even fish/game gathered from public lands

      but when someone pays for something that benefits others that where things get fuzzy for me – on the theory.

      I guess the linkage between taxes paying for something – and that something being available to everyone is where the glitch is…

      does a public good have to be not paid for by anyone to truly be a public good?

      or if whatever is available IS paid for by others, is it really a public good instead of a investment good?

      If the definition is truly strict – very, very few things actually fall into the “free and no one paid for it” public good category.

      it’s an honest question on my part.

  21. re: public goods

    it’s an honest question on my part.

    OK, I will answer it as such.

    lighthouses paid for by taxes
    schools paid for by taxes
    fireworks paid for by taxes

    A public good isn’t defined by who pays for it, but by who uses it. Public funding doesn’t define a public good.

    The light from the lighthouse can’t be denied to anyone in view of it. the light is available to all ships in the vicinity, so it is nonexcludable. No one can be kept from benefiting. based on whether or not they pay for that benefit. Those who don’t are considered to be “free riders”. (and dirtbags)

    Every ship that sees the light and is guided by it and enjoys the full benefit of the light. Any number of ships can enjoy the full benefit of the light without reducing the benefit to any other ship. It is nonrivalrous.

    A parking space on a public street would be an example of a common good, as it’s available to everyone, but only to one person at a time. It is a rivalrous good because if one person uses it no one else can. It isn’t a public good.

    The table on the wiki page is helpful in understanding these differences.

    Public education isn’t a public good, even though it is paid for with public funds, because it is excludable. Even though it is available to all eligible children, it is a policy decision, that makes it so and not the nature of the good. Public schools do in fact, exclude all those who aren’t in the correct age group for the appropriate grade levels. You or I can’t just show up in class at a local K-6 school and expect to attend third grade. Any child who has already successfully passed third grade won’t be allowed to attend either.

    In this respect a public school is no different from a private school, except that it is obvious that a private school education is excludable to those who pay tuition.

    If teachers shouted lessons from the rooftops or broadcast classes on local free broadcast television so that no one was excluded, that education would be a public good, as everyone listing or watching would get the same benefit regardless of the number doing so.

    I DID read the links provided and I DO understand the concept of a sunset or clean air or even fish/game gathered from public lands

    but when someone pays for something that benefits others that where things get fuzzy for me – on the theory.

    If I present a fireworks display at a local arena I can charge admission for those who want an excellent close up view, but anyone outside the arena can also enjoy the fireworks to a lesser degree. I can’t exclude them or charge them admission, and no matter how many viewers there are, each one enjoys the full extent of the display so the display is a public good for anyone outside the arena.

    If a group of homeowners join together to build a dam on the nearby river to prevent flooding they have created a public good, because that flood control will be enjoyed by everyone who lives downstream, not just those who paid for it. There is no way to selectively control flooding for only those who paid, and each homeowner enjoys full flood control no matter how many others also benefit.

    I guess the linkage between taxes paying for something – and that something being available to everyone is where the glitch is…

    It doesn’t matter how a good is paid for, whether public or private, nor how many of the beneficiaries pay. If no one can be excluded and each beneficiary enjoys the full benefit no matter how many there are, it is a public good.

    does a public good have to be not paid for by anyone to truly be a public good?

    Most, but not all, public goods are paid for. Only those provided by nature through no effort on anyone’s part are free. The sunset for example. It doesn’t matter who or how many pay for a public good, the only requirement is that it be nonexcludable and non rivalrous.

    or if whatever is available IS paid for by others, is it really a public good instead of a investment good?

    An investment good or capital good or an intermediate good or producers’ good are goods used to make other goods intended for consumption. A drill press or a dump truck or a factory could be considered investment goods. A spear you fashion from a tree branch to help you hunt and kill small animals for your dinner is an investment good. You don’t consume it directly, but use it to make other goods that you do consume directly. I don’t see any way you can make a connection to public goods here.

    If the definition is truly strict – very, very few things actually fall into the “free and no one paid for it” public good category.

    But it doesn’t matter, as “free and no one paid for it” isn’t part of the definition of a public good. I only used the sunset example because it is easy to understand it as a public good.

    Perhaps it would be better if we narrowly defined “goods” as things made by people and excluded free gifts of nature such as sunsets from our definition of public goods, as all goods made by people are paid for in one way or another.

    Even though wiki includes “air” as a public good, it isn’t manufactured by anyone, isn’t scarce, and has no market value, so it seems kind of a stretch to call it a “good”.

  22. The author of this article is an idiot. His argument is that 99.4 percent of the population earns more than minimum wage and that for example 75% of teens earn more than minimum wage. But how much is “more”. I would wager to say that a great deal of these people who make “more than minimum wage” do so by only a dollar or two per hour. Even Consider those who make twice minimum wage. Thats still poverty.

    The natural law of society’s structure is that most people don’t make a lot of money.

    • The natural law of society’s structure is that most people don’t make a lot of money“…

      Hmmm, OK…

      Then a corollary to this supposed natural law of society is that people aren’t worth a lot of money, right?

  23. I am sure that Minimum wage earners DON’T Vote,
    Are a Strain on the Welfare system, have many, many children and recieve lots of Free Money from Welfare,Blue Cross Blue Shield,look at April 15th as a day they recieve their Christmas Bonus and rarely aspire to change their lots. The Bigger issue is Why do Both Democrats and Republicans alike IGNORE the Middle Class(they both do, but for different reasons). Under the Obama Administration,Wall Street has NEVER BEEN HIGHER yet Unemployment still soars.Trickle Down has been a myth since FDR Died. When is President Obama going to stop Pandering to the Rich and Lavishing the Poor and Ignoring the Middle Class.
    The Middle Class stares in the window of the Restuarant watching the Poor and the Rich eat at the table and when the bill comes the waitor goes outside and hands it to the Middle Class.This is MADNESS!!!!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>