How much would you work for?

[Buck Randall]

What is the reason to have a government set minimum wage? Should the government set a minimum price for feeder cattle? For gasoline? For a pair of shoes? For ammunition? For filling a tooth? For baling hay? All these should be set by supply and demand, not the government. Suppose there was a minimum price for feeder cattle, say $1.45/lb. After all, the farmer is entitled to make a living from his work. Can't do that at $0.80/lb. Now suppose you had a limping, sick looking one that you take to the auction. Minimum bid is $1.45. Guess what - no one bids. You need to come pick up your calf. What are you going to do with it. Could have sold for $0.70 except that there is a minimum price. Same principles apply to wages. Some people are not capable of producing at the $15/hr level. They will not be hired. Pricing based on supply and demand will straighten it all out.
Do we need the government setting all the prices? A free market is about supply and demand, not minimums, maximums, subsidies, credits, etc. Those all screw up the supply and demand. Maybe all farm loans should be forgiven. Maybe a free new farm truck every 10 years - electric of course. The limit we do need is term limits for our "rulers".

If you want a free market based on supply and demand, then government needs to break up big businesses that are able to distort the market.

If fat cattle only bring 1.10/lb. is that because they're only worth that much, or is it because there are only two buyers that have a gentlemen's agreement to stop bidding at 1.10? If there were dozens of small packers at the auction and they didn't know each other, I guarantee the price would start going up. Sure, some farmers can work around this by selling freezer beef, but that isn't going to work for the majority. They have to market their cattle for the price offered. If somebody told Tyson they were required to pay for cattle based on cost of production, they'd cry that it's impossible and you'll run them out of business. Would you believe them?

The labor market works the same way. Walmart, McDonalds, Amazon, etc. can offer any lowball number they want because they're big enough to dominate the labor market. Sure, some qualified individuals will go elsewhere and make more money, but that's not an option for everyone. It ends up working like a boat anchor on the whole labor economy. The big boys pay as little as they can get away with, and the little boys pay a little more. Any discussion of raising that minimum gets all of the businesses crying that it's impossible and they'll be run out of business. Hogwash. If everyone has to play by the same rules, they'll find a way. People aren't going to stop buying products and services. Jeff Bezos isn't going to be in the free soup line.

 

[Little Joe]

If you want a free market based on supply and demand, then government needs to break up big businesses that are able to distort the market.

If fat cattle only bring 1.10/lb. is that because they're only worth that much, or is it because there are only two buyers that have a gentlemen's agreement to stop bidding at 1.10? If there were dozens of small packers at the auction and they didn't know each other, I guarantee the price would start going up. Sure, some farmers can work around this by selling freezer beef, but that isn't going to work for the majority. They have to market their cattle for the price offered. If somebody told Tyson they were required to pay for cattle based on cost of production, they'd cry that it's impossible and you'll run them out of business. Would you believe them?

The labor market works the same way. Walmart, McDonalds, Amazon, etc. can offer any lowball number they want because they're big enough to dominate the labor market. Sure, some qualified individuals will go elsewhere and make more money, but that's not an option for everyone. It ends up working like a boat anchor on the whole labor economy. The big boys pay as little as they can get away with, and the little boys pay a little more. Any discussion of raising that minimum gets all of the businesses crying that it's impossible and they'll be run out of business. Hogwash. If everyone has to play by the same rules, they'll find a way. People aren't going to stop buying products and services. Jeff Bezos isn't going to be in the free soup line.

The problem with raising the minimum wage is all products have to go up in price to compensate for the wage increase which basically did nothing but make the people who were already above minimum wage take home less money because it usually takes several years for their wages to increase by the same percentage that minimum wage went up. For example if minimum wage doubles from 7.50 to 15.00, most goods are going to darn near double to compensate for the wage increase because Wal-Mart or their suppliers are not gonna just eat that increase, they're gonna pass it on to the consumer. If I was making 25/hour and my wages don't go up because I was already well above minimum wage then I'm gonna keep less money in my pocket because I'm now spending more at the grocery store, the gas station and so on than what I was when minimum wage was 7.50, yet I seen no increase in my pay. If I was worth 3x what minimum wage was before, my employer can't afford to just give me 45/hour now just because minimum wage went up. Therefore people who have taken on more responsibility to get that higher wage are gonna be second guessing that because they guy that don't know crap is making close to what he is.

There are plenty of good jobs out there that pay more than minimum wage with room to grow with more experience, problem is not many want to put forth the effort. I deal with tradesmen and people in the service industry daily, the consistent story I hear is they can't find any help. These are good paying jobs. Most don't start out paying top dollar, but with a little experience the sky's the limit as to what you can make. Most trades in my area are weeks behind on work because they can't find people that want to work. Making a McDonalds worker make as much as a starting plumber is not gonna help the situation, it's only gonna hinder it. I actually seen a guy complaining about minimum wage being too low say " maybe I don't want more responsibility, don't mean I shouldn' t make more money" when he was asked if he'd considered learning a skill that paid more than minimum wage. That's the problem, they don't want to learn how to better themselves, they just want it given to them.

 

[FungusProudKY31]

High labor costs always increases the speed of automation. Fast food will become more of a vending service or go out of business. A lot of groceries stores are already closing and merging. That is also a labor issue at the root. The expansions are groceries sitting on the floor or on a shelf in the boxes and prepackaged fruits and vegs. The government ought to play fair and let employers print up extra money, too. That would be fair! Internet sales are an advantage on lack of store investment and sitting inventory but also is a lessening of labor in shipping, handling, stocking, sales and such. Buy from Walmart or Target online and get 4 boxes for 4 products from 4 places. Walmart and Target likely never touches most and just gets a % for the website presence. But whatever, China has cheap labor. SC is in the process to issue $550 mil in bonds for better rail capacity for the port at Charleston. Quite a setup now but 100,000's more sea containers will leave the post without a semi pulling it in the future. Labor issue in the short run and infrastructure maintenance (highway) costs decrease in the future.

 

[D2Cat]

The $15 minimum wage is for Federal employees. States determine their minimums.

Questions and Answers About the Minimum Wage

www.dol.gov

 

[JParrott]

The problem with raising the minimum wage is all products have to go up in price to compensate for the wage increase which basically did nothing but make the people who were already above minimum wage take home less money because it usually takes several years for their wages to increase by the same percentage that minimum wage went up. For example if minimum wage doubles from 7.50 to 15.00, most goods are going to darn near double to compensate for the wage increase because Wal-Mart or their suppliers are not gonna just eat that increase, they're gonna pass it on to the consumer. If I was making 25/hour and my wages don't go up because I was already well above minimum wage then I'm gonna keep less money in my pocket because I'm now spending more at the grocery store, the gas station and so on than what I was when minimum wage was 7.50, yet I seen no increase in my pay. If I was worth 3x what minimum wage was before, my employer can't afford to just give me 75/hour now just because minimum wage went up. Therefore people who have taken on more responsibility to get that higher wage are gonna be second guessing that because they guy that don't know crap is making close to what he is.

There are plenty of good jobs out there that pay more than minimum wage with room to grow with more experience, problem is not many want to put forth the effort. I deal with tradesmen and people in the service industry daily, the consistent story I hear is they can't find any help. These are good paying jobs. Most don't start out paying top dollar, but with a little experience the sky's the limit as to what you can make. Most trades in my area are weeks behind on work because they can't find people that want to work. Making a McDonalds worker make as much as a starting plumber is not gonna help the situation, it's only gonna hinder it. I actually seen a guy complaining about minimum wage being too low say " maybe I don't want more responsibility, don't mean I shouldn' t make more money" when he was asked if he'd considered learning a skill that paid more than minimum wage. That's the problem, they don't want to learn how to better themselves, they just want it given to them.

I don't think prices have to go up but I agree with your point. Milton Friedman opened the door fifty years ago to every shareholder feeling like they're consistently owed a profit so every time wages go up, prices go up. In my opinion, even if prices for goods remained close to the same, growth would be incredible but until supply caught up the increased demand generated from the expendable cash flow in the economy all of a sudden, prices would go up anyway.

The past year has demonstrated what happens to prices when the supply chain reserves are depleted. Production capacity for many raw materials is maxed out and the demand isn't subsiding. I still think it's going to be at least 12-18 months before equilibrium is close to being achieved.

I also see a higher amount of people not willing to work for the wages offered here locally. We can't find folks willing to show up consistently or at all for any length of time. I agree that attitude, work ethic, and the accepted decrease in shame for not having a job are strong contributing factors.

 

[Craig Miller]

Last year I was making 850 a day. I wouldn't have rolled out of bed for less than 400 a day. Then I got laid off and took a job making 10/hr part time. Different seasons of life.