CBO Says The Obama Plan To Raise Minimum Wage...

[KingOrfeo]

It has various forms.

Mainly it comes down to social conservatism vs. economic conservatism. The difference is, economic conservatives are not always wrong, and social conservatives are not always evil.

 

[about_average]

You have all the facts, right?

Nope, and never claimed to, but unlike you I did read the report and am not blinded by ideology so I can see what it actually says.

 

[dan_c00000]

Nope, and never claimed to, but unlike you I did read the report and am not blinded by ideology so I can see what it actually says.

Vette, like all conservatives, has lived outside the reality based community since at least 2000.

 

[unregistered]

 

[about_average]

I'm not blinded by ideology either, I'm not a liberal. Economic law is carved in rock. Ask yourself a question, do you flock to the fucking store when prices got up? Now shut the fuck up, you blind bat.

Well, I see you still haven't really read the report, even when its suggested you should.

 

[Sean Renaud]

I'm not blinded by ideology either, I'm not a liberal. Economic law is carved in rock. Ask yourself a question, do you flock to the fucking store when prices got up? Now shut the fuck up, you blind bat.

Economic law is hardly carved in stone lot of it are simply to complicated or vital to life for these kinds of changes to happen. Nobody goes flocking to stores when prices go up is a grand example. Prices go up all the fucking time, they just don't advertise that and it doesn't cause them to lose swaths of customers. In some cases (water, food, electricity, gasoline) the customer doesn't have a whole lot of choice in the matter and simply go along with the flow.

 

[about_average]

I'm not blinded by ideology either

That's laughable.
You state: "CBO Says The Obama Plan To Raise Minimum Wage will cost 500,000 jobs" when in fact it doesn't say that.

 

[KingOrfeo]

Economic law is carved in rock. Ask yourself a question, do you flock to the fucking store when prices got up?

Sometimes overpricing the goods is an effective marketing strategy. Has been at least since the 1980s. Snob-appeal, you know.

 

[Sean]

I'm not blinded by ideology either, I'm not a liberal. Economic law is carved in rock. Ask yourself a question, do you flock to the fucking store when prices got up? Now shut the fuck up, you blind bat.

You and the other scared idiots did when ammo went up. One of those economic laws is supply and demand. As demand goes up, so do prices.

 

[Sean Renaud]

That's laughable.
You state: "CBO Says The Obama Plan To Raise Minimum Wage will cost 500,000 jobs" when in fact it doesn't say that.

It could be more it could be less. We should probably move forward with the expectation that it will cost us those jobs which is what? Three months give or take?

 

[KingOrfeo]

Economic law is carved in rock.

TVTropes again:

Useful Notes: Economics

The nice thing about Mathematics and other Hard Sciences is that there is no question that 2 + 2 = 4.

The complicated thing about Sociology and other Social Sciences is that there's room for interpretation and debate. note Are '2' and '2' satisfactory evaluations based upon sound criteria? Is there a margin for error? Are '+' and '=' the correct operations to be accounting for? Is the product of the process, 4, the problem or the solution? Are we even asking the right question in the first place (or is someone out to prove something)? And, why ask at all when the answer is so obvious? This could be an indication that someone else should be chosen to ask the questions in future - they're wasting our time - though then again, this happened back in '07 and no-one batted an eyelid. We should really look into that..

The horrifying thing about Economics is that both of these are true.

This violent collision leaves a few absolutes to take refuge behind, and a wide open mine field for catastrophic assumptions and mistakes, and prime Flame Bait. There are a fair number of widely divergent economic schools of thought, each with a reasonable claim to accuracy, and each which believes the others to fail economics forever. This is probably one of the reasons Thomas Carlyle called economics "the dismal science". (And few agree on that term... Economists will claim their science isn't dismal, and many other fields will claim it's not a science. The dance goes on.) note Actually the reason why Carlyle called the economics "the dismal science" was because John Stuart Mill and his fellow economists supported the equality between all men and the abolishment of the slavery, and Carlyle was afraid that the economics would cause the decadence of the society.

The following fallacies are always accepted as fallacies, but only if the following two points are true about the economy in question:
• First, the economy is healthy. Schools of economic thought greatly differ on matters relating to an unhealthy economy. For instance, a Keynesian would only accept Fallacy 1 (the Broken Window Fallacy) is a fallacy in a healthy economy. In an unhealthy economy, committing this fallacy is (according to Keynesianism) a potentially beneficial thing. Thus, all the following fallacies are controversial in an unhealthy economy.
• Second, any given thing is worth only what its purchaser will pay for it. These fallacies are based on Neoclassical economics, which is a broad designation that refers to all economic schools that accept the consensus formed in the wake of the "Marginalist Revolution" caused by the work of Leon Walras, William Jevons and Carl Menger. Basically, this approach to economics emphasizes economic subjectivism; the belief that a good is valued by a subject and that market prices for a good only come about when subjects desire them. This is a great contrast to the Classical economists like Adam Smith and Karl Marx, who argued the value of commodities are related to the labor to produce them (the labor theory of value, a theory derived from the philosophy of John Locke).

 

[RobDownSouth]

Economic law is carved in rock.

"Economic Law"? What in the hell is that, Grampa Urine?

This oughta be good.....

 

[KingOrfeo]

"Economic Law"? What in the hell is that, Grampa Urine?

This oughta be good.....

This, would be my guess.

 

[ZiggyTheHutt]

The actual cost of a wage increase.

Just to give some perspective, here are some real, non-partisan numbers from the real restaurant business which employs me.

Your average day at this particular location brings in $3,000 gross income.

The crew costs about 15% of this number, which is on the high end, compared to a business such as a supermarket or big box store which typically has a much higher sales-to-associate ratio. (Consider the total gross purchases for one register at wal-mart in an 8 hour shift compared to the total sales for a food delivery person and you'll see that other business models enjoy lower labor percentage costs)

With management included, the labor cost jumps up to 21%, or about 640 dollars of the $3,000 dollar gross sales.

Your average employee is making around 8 dollars or 8.50 per hour.

A minimum wage increase to 10 dollars an hour means an additional 132 dollars in labor cost for the crew, and let's say the managers get a similar raise, so let's give those 2-3 guys another 2 dollars an hour, and spend another 50 dollars or so.

So our total labor cost increase is 182 dollars out of 3,000 in sales.

This represents a 6% increase in labor cost.

To offset this, and make things even-steven for the business (which is what they'll do, they won't eat the cost), prices will increase by about 6 percent.

So, that meal you purchased for 10 dollars will now cost $10.60.

Because the business passed the cost increase on to the consumer, no one had to lose their job, because the business is precisely as profitable as before.

Consumers will react to this price increase the same way they reacted to the price of gas doubling: They will continue to be consumers, and pay the new price.

And life goes on, contrary to supply-side doomsayers, whose memory of previous increases in the price of milk, insurance, gasoline, and even cigarettes seems to be completely absent.

=========================


Bullshit counter-argument:

"It will not help the worker. Because prices will increase due to inflation and they'll end up right back where they started."

Several reasons why this is bullshit:

1) Prices already increase independently of the minimum wage. Remember, gasoline prices shot through the roof without anything to do with the minimum legal wage. Insurance premiums rise on their own. Rent rises on its own. That means that the cost of living will continue to increase whether or not the minimum wage increases. At one time, the minimum wage, one full 40-hour work week, was enough to sustain not only a single person, but a family on a budget. Now, minimum wage workers absolutely must have two jobs or split expenses with someone to come up with both rent and food. That is because the minimum wage has been stagnant while prices have not been stagnant.

2) Notice, the wage increase of 8 dollars to 10 dollars represented a massive percentage increase in real wages to the employee, while the consumer price increase was only 6 percent, which means the wage increase far, far outpaced the consumer price increase. So the argument is not even mathematically correct that the worker gains zero ground.

3) The objective is not for minimum wage workers to suddenly be able to afford 4 bedroom homes and 5 cars in the driveway. The objective is merely to allow the minimum wage worker to MAINTAIN the CURRENT level of poverty they are in, correcting the wage periodically when prices increase. Which is what has been happening ever since the minimum wage became a thing. Eventually it needs to be corrected, and why is that? Because it no longer represents the minimum needed to afford to live, requiring workers to get two or more jobs just to pay the bills.

4) An additional 1-2 dollars per hour will be noticed by the worker whose budget shortfall each month is in the neighborhood of 100 dollars. Because now that budget is balanced. Keeping in mind these workers have a budget resembling 1,000 dollars, one hundred or two hundred dollars is absolutely everything to these workers. Even if, theoretically, prices eventually reached the point where the entirety of their wage increase had been offset, the period between when they got the wage increase and the eventual price increase offset it entirely could be a period of years or a decade. I promise you that a decade of relief from being destitute matters, even if in 5 or 10 years the minimum wage needs another increase, and labor-related price increases by another 6 percent.

And again, I refer you to the fact that the business model I am working under assumes a much, much higher labor cost than the average business model. Which means the vast majority of businesses will be able to afford the labor price increase with a smaller percentage price increase to the consumer. Perhaps as low as 3 percent, or 1 percent.

It is conceivable that some business which is already in desperate shambles may not be able to afford the price increase, and will close up shop rather than raise prices. Those businesses are not healthy or competently run, and would likely fold under the pressure of a wal-mart or a costco moving into town anyway, which is a normal part of competitive capitalism.

It may mean that some jobs which are not even a little bit secure will disappear.

It will also mean that millions of families may not have to work two jobs. And then, they will quit their second job, opening up millions of positions to be filled by new hires.

I don't claim that these numbers will perfectly match. But I do know the worker will be vastly better off, the consumer will barely notice any difference, and the vast majority of businesses can easily eat the difference or pass it along to the consumer.



Bottom line: Inaction is not an option. The worker cannot work three jobs. And as they sink deeper and deeper into poverty due to price increases and stagnant wages, they will need bigger and bigger welfare checks to pay for food, and subsidies to housing for the poor will need to be increased.

Just don't increase those things? Sure.

Okay, so if my cost of living expenses are 1400 dollars a month and I work two jobs and earn 1300 dollars a month, what is my motivation to show up to work when I am evicted from my apartment, have no shelter, electricity, or a place to wash myself and my clothes? I guarantee you at that point I quit both jobs and start stealing things.

Inaction is not an option. You have two choices: Increase the legally mandated wage, or increase the legally mandated poverty level and increase the legally mandated government spending to welfare recipients.

Just seems like it's robbing from the middle class to take taxes out of their paycheck to pay for the food and shelter of someone who is already employed.... TWICE.

These businesses are quite profitable and can afford to pay their employees a living wage, but they refuse because Uncle Sam is willing to pay the difference.

Lest you forget, YOU are Uncle Sam.

Stop being willing to pay the difference.

Stop getting your hard-earned pay stolen from you because McDonald's won't pay their worker enough to live without a second job.

Force McDonald's to pay their workers enough that their employees NO LONGER QUALIFY FOR WELFARE ASSISTANCE.

The end result? The worker still gets the money to live. Only it's not coming out of YOUR paycheck.

Forgive me, but doesn't that make a hell of a lot more fucking sense than what we're doing now?

Thanks for listening.

 

[ZiggyTheHutt]

Too long, didn't read?


When someone tells you that giving these employees a raise would cause your 99 cent hamburger to cost 2 dollars, remember, that would be true if the cost of labor was 50 percent of the total sales, and even then, only if the wage literally increased to 16 dollars an hour.

Then, and only then, would your hamburger would be 2 dollars. Right?

Actually, that's not even correct.

If it costs 99 cents for a hamburger, and theoretically 50 cents of that was labor cost, (it is not) and the labor cost doubled to a dollar, the other costs did not increase.

Which means in the COMPLETELY ABSURD example of a 50 percent labor cost and a DOUBLING of the minimum wage, your 99 cent hamburger would cost a buck fifty.

Laugh.

Laugh in the faces of the retarded morons who say giving the minimum wage a bump will significantly increase prices.

They are babbling blithering bumbling blistering idiots who haven't the slightest goddamned clue what in the blue fuck they're talking about.

 

[Sean Renaud]

Hail to the king baby.

 

[KingOrfeo]

[4) An additional 1-2 dollars per hour will be noticed by the worker whose budget shortfall each month is in the neighborhood of 100 dollars. Because now that budget is balanced. Keeping in mind these workers have a budget resembling 1,000 dollars, one hundred or two hundred dollars is absolutely everything to these workers. Even if, theoretically, prices eventually reached the point where the entirety of their wage increase had been offset, the period between when they got the wage increase and the eventual price increase offset it entirely could be a period of years or a decade. I promise you that a decade of relief from being destitute matters, even if in 5 or 10 years the minimum wage needs another increase, and labor-related price increases by another 6 percent.

See the Micawber Principle:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

 

[jeninflorida]

have any of you idiots ever thought about getting real jobs?

 

[ZiggyTheHutt]

have any of you idiots ever thought about getting real jobs?

Many of my co-workers have a college education and/or previously worked in a middle-class job. When the economy turned sour, they were forced to take what jobs were available.

Many of these folks have student loans to repay and kids to support, and had been doing so successfully. So yes, to answer your question, the thought had occurred.

 

[jeninflorida]

Many of my co-workers have a college education and/or previously worked in a middle-class job. When the economy turned sour, they were forced to take what jobs were available.

Many of these folks have student loans to repay and kids to support, and had been doing so successfully. So yes, to answer your question, the thought had occurred.

So they made bad choices and now its my responsibility to support them?

 

[4est_4est_Gump]

Sour grapes. The drafters should have been more concise. The Commerce Clause, as written, gives the federal government the power to do just about anything. Like it or not, every (Supreme) Court for the past 90 years has ruled that way.

I just said why. I attached no value judgement to it.

 

[4est_4est_Gump]

The CBO report is not factually correct. It's a premise, a possible outcome.
If you actually read it, they say there could be anywhere from almost no job losses, to nearly one million losses. They arbitrarily chose the midpoint figures.

Yes, no one can predict the outcome in a chaotic system which is why we should be loath to change.

For example, you are a retailer and you hire new inexperienced people at minimum wage and then generally, after 90 days give them a modest raise or let them go based upon performance. Now suddenly, the government says now people, p, must be paid e-x. Now the current employee, e, is back to making near minimum wage meaning that there is now no premium for his experience, so, in effect, he is earning perceptually e-x. To keep him happy, and at his job, the employer is under pressure now to pay him e+x. He is also under pressure to let go e-x after the probationary period to contain labor costs (as well as to cut hours, say from 38 to 36 across tho board. If they do not do this, then their labor cost rises and so do their prices. This makes the gain for the new worker somewhat diminished, fewer hours and higher process, so the gain is only a gain in a political sense, but surely not an economic sense.

Now, the administration is pointing to the 900,000 lifted above the poverty level by the report, but to do that, you have to discount inflation, for we are always raising the bar on what is the poverty level, so between that and the proclivity towards non-retention of new hires, I would think that that number would, over time be significantly diminished.

 

[jeninflorida]

DerP!

Zippie, since you have never employed someone .....



Well thanks for the useless rhetoric

The actual cost of a wage increase.

Just to give some perspective, here are some real, non-partisan numbers from the real restaurant business which employs me.

Your average day at this particular location brings in $3,000 gross income.

The crew costs about 15% of this number, which is on the high end, compared to a business such as a supermarket or big box store which typically has a much higher sales-to-associate ratio. (Consider the total gross purchases for one register at wal-mart in an 8 hour shift compared to the total sales for a food delivery person and you'll see that other business models enjoy lower labor percentage costs)

With management included, the labor cost jumps up to 21%, or about 640 dollars of the $3,000 dollar gross sales.

Your average employee is making around 8 dollars or 8.50 per hour.

A minimum wage increase to 10 dollars an hour means an additional 132 dollars in labor cost for the crew, and let's say the managers get a similar raise, so let's give those 2-3 guys another 2 dollars an hour, and spend another 50 dollars or so.

So our total labor cost increase is 182 dollars out of 3,000 in sales.

This represents a 6% increase in labor cost.

To offset this, and make things even-steven for the business (which is what they'll do, they won't eat the cost), prices will increase by about 6 percent.

So, that meal you purchased for 10 dollars will now cost $10.60.

Because the business passed the cost increase on to the consumer, no one had to lose their job, because the business is precisely as profitable as before.

Consumers will react to this price increase the same way they reacted to the price of gas doubling: They will continue to be consumers, and pay the new price.

And life goes on, contrary to supply-side doomsayers, whose memory of previous increases in the price of milk, insurance, gasoline, and even cigarettes seems to be completely absent.

=========================


Bullshit counter-argument:

"It will not help the worker. Because prices will increase due to inflation and they'll end up right back where they started."

Several reasons why this is bullshit:

1) Prices already increase independently of the minimum wage. Remember, gasoline prices shot through the roof without anything to do with the minimum legal wage. Insurance premiums rise on their own. Rent rises on its own. That means that the cost of living will continue to increase whether or not the minimum wage increases. At one time, the minimum wage, one full 40-hour work week, was enough to sustain not only a single person, but a family on a budget. Now, minimum wage workers absolutely must have two jobs or split expenses with someone to come up with both rent and food. That is because the minimum wage has been stagnant while prices have not been stagnant.

2) Notice, the wage increase of 8 dollars to 10 dollars represented a massive percentage increase in real wages to the employee, while the consumer price increase was only 6 percent, which means the wage increase far, far outpaced the consumer price increase. So the argument is not even mathematically correct that the worker gains zero ground.

3) The objective is not for minimum wage workers to suddenly be able to afford 4 bedroom homes and 5 cars in the driveway. The objective is merely to allow the minimum wage worker to MAINTAIN the CURRENT level of poverty they are in, correcting the wage periodically when prices increase. Which is what has been happening ever since the minimum wage became a thing. Eventually it needs to be corrected, and why is that? Because it no longer represents the minimum needed to afford to live, requiring workers to get two or more jobs just to pay the bills.

4) An additional 1-2 dollars per hour will be noticed by the worker whose budget shortfall each month is in the neighborhood of 100 dollars. Because now that budget is balanced. Keeping in mind these workers have a budget resembling 1,000 dollars, one hundred or two hundred dollars is absolutely everything to these workers. Even if, theoretically, prices eventually reached the point where the entirety of their wage increase had been offset, the period between when they got the wage increase and the eventual price increase offset it entirely could be a period of years or a decade. I promise you that a decade of relief from being destitute matters, even if in 5 or 10 years the minimum wage needs another increase, and labor-related price increases by another 6 percent.

And again, I refer you to the fact that the business model I am working under assumes a much, much higher labor cost than the average business model. Which means the vast majority of businesses will be able to afford the labor price increase with a smaller percentage price increase to the consumer. Perhaps as low as 3 percent, or 1 percent.

It is conceivable that some business which is already in desperate shambles may not be able to afford the price increase, and will close up shop rather than raise prices. Those businesses are not healthy or competently run, and would likely fold under the pressure of a wal-mart or a costco moving into town anyway, which is a normal part of competitive capitalism.

It may mean that some jobs which are not even a little bit secure will disappear.

It will also mean that millions of families may not have to work two jobs. And then, they will quit their second job, opening up millions of positions to be filled by new hires.

I don't claim that these numbers will perfectly match. But I do know the worker will be vastly better off, the consumer will barely notice any difference, and the vast majority of businesses can easily eat the difference or pass it along to the consumer.



Bottom line: Inaction is not an option. The worker cannot work three jobs. And as they sink deeper and deeper into poverty due to price increases and stagnant wages, they will need bigger and bigger welfare checks to pay for food, and subsidies to housing for the poor will need to be increased.

Just don't increase those things? Sure.

Okay, so if my cost of living expenses are 1400 dollars a month and I work two jobs and earn 1300 dollars a month, what is my motivation to show up to work when I am evicted from my apartment, have no shelter, electricity, or a place to wash myself and my clothes? I guarantee you at that point I quit both jobs and start stealing things.

Inaction is not an option. You have two choices: Increase the legally mandated wage, or increase the legally mandated poverty level and increase the legally mandated government spending to welfare recipients.

Just seems like it's robbing from the middle class to take taxes out of their paycheck to pay for the food and shelter of someone who is already employed.... TWICE.

These businesses are quite profitable and can afford to pay their employees a living wage, but they refuse because Uncle Sam is willing to pay the difference.

Lest you forget, YOU are Uncle Sam.

Stop being willing to pay the difference.

Stop getting your hard-earned pay stolen from you because McDonald's won't pay their worker enough to live without a second job.

Force McDonald's to pay their workers enough that their employees NO LONGER QUALIFY FOR WELFARE ASSISTANCE.

The end result? The worker still gets the money to live. Only it's not coming out of YOUR paycheck.

Forgive me, but doesn't that make a hell of a lot more fucking sense than what we're doing now?

Thanks for listening.

 

[jeninflorida]

They can jack min wage up to $300 per hour...as that will only fuel Amazon taking over the retail marlet and McDonalds automating the burger.

Fact is, the jobs are as valuable as being a blacksmith, processor of whale oil for lamps....

Now, we could beach Rob and use some of that fat as biofuel

 

[RobDownSouth]

Yes, no one can predict the outcome in a chaotic system which is why we should be loath to change.

For example, you are a retailer and you hire new inexperienced people at minimum wage and then generally, after 90 days give them a modest raise or let them go based upon performance. Now suddenly, the government says now people, p, must be paid e-x. Now the current employee, e, is back to making near minimum wage meaning that there is now no premium for his experience, so, in effect, he is earning perceptually e-x. To keep him happy, and at his job, the employer is under pressure now to pay him e+x. He is also under pressure to let go e-x after the probationary period to contain labor costs (as well as to cut hours, say from 38 to 36 across tho board. If they do not do this, then their labor cost rises and so do their prices. This makes the gain for the new worker somewhat diminished, fewer hours and higher process, so the gain is only a gain in a political sense, but surely not an economic sense.

Now, the administration is pointing to the 900,000 lifted above the poverty level by the report, but to do that, you have to discount inflation, for we are always raising the bar on what is the poverty level, so between that and the proclivity towards non-retention of new hires, I would think that that number would, over time be significantly diminished.

One of AJ's better word salads. Of course, he doesn't understand basic economic concepts such as "replacement costs" and "price elasticity", and thinks profit margins are sacrosanct, but hai, economics is HARD!