Oso planning to go pro
What are the horrible consequences of free markets that you fear? If there are abuses (child labor, monopolies that restrict competition, etc.,) societies are free to enact common sense laws for its citizens protection.
Regarding your earlier post, how do you define "free market principles?" To me that seems exceptionally vague. So vague that one could find "free market principles" at work in nearly every country on earth. Even the most socialist countries on earth, particularly in the Western world, have extensive free market elements.
Glad to see you coming out of the closet in favor of regulation
If you think that voluntary interactions between free people (consumers and businessmen) generally produce better results than government decrees you believe in free market principles.If you think that individuals will spend their own earned income more wisely and carefully than government bureaucrats you believe in free market principles.If you think competition is more likely to produce innovation and prosperity than government or government/private "partnerships" (crony capitalistic quasi monopolies) you believe in free market principles.I could go on and on, but hopefully you get my drift. That doesn't mean that government can't protect its citizens from businesses (or individuals) who would do them harm. That's government's most vital role, so you can't shoot somebody or poison them with toxic waste - etc., etc., etc.We are imperfect and so is our world. That vexes us so we want to eliminate those imperfections. If you think that the world, as imperfect as it is, is a better and more prosperous place when men and women are most free, you believe in free market principles.
TAMUI do know, Newsie is right on you knowing ball.
Going back to the original topic. I think everyone should be paid a living wage. I question that raising the minimum wage is an effective way to do that. Reading this thread has been for the most part enjoyable because I have gotten to hear a lot of different perspectives.
Going back to the original topic, I think that demanding employers pay a "living wage" (enough to support a family of 4) for unskilled, entry level workers is one of the reasons (along with a monopolistic, failing public school system, draconian drug prohibition laws and various welfare programs) for the cycle of inner city poverty we still see today. Good intentions, bad results to me = bad policy.
So you think living wages and welfare programs are responsible for the cycle of inner city poverty, but no mention of a few centuries of institutiional oppression based on race? No mention of voter suppression, school segregation, unequal treatment by the justice system, redlining, workplace discrimination, etc.I mean, there's some truth in what you say ... the schools are bad (why?) and the drug war has inordinately targeted inner city users/dealers (again, why?). But while you're pointing out that the house needs a new paint job, you're ignoring the crumbling foundation and collapsing roof.
Ok, so you agree in principal that worrying about a living wage (painting the house) while allowing the institutional issues to continue (crumbling foundation) is a pointless exercise. Good, so let's get the politicians to focus on the foundation first shall we?
Clever rhetorical trick, but that's a complete bastardization of what I wrote.That said, if there were a way for Washington to magically do away with the consequences of institutional racism in one fell swoop and they could only do that or deal with stagnant wages among the working classes, then I would choose the former. But it's not possible for Washington to magically do away with the consequences of institutional racism in one fell swoop, and if there were, there's no reason they couldn't do that and deal with stagnant wages among the working classes.See: False dilemma.
But again, the bigger issue is getting more money into the middle earners. The median household income in the US went down 2.5% from 1999 to 2015. Cumulative inflation during that time was 42%. So how do we get the median household income to go up? My opinion is that raising the median household income will spur the economy by getting more money into the hands of consumers.
The solution is to make money worth more in the long term - to raise interest rates.Yeah that would suck in the short term. Borrowing would cost more which means people would buy less things. Furthermore people would be incentivized to save money versus spending it. But in the long run, I think that is the only way to push wages up. And that mortgage payment becomes relatively cheaper. And the saved money earns more interest and would eventually be injected back into the economy.And I'm not talking about going back to the 80s and early 90s when it was around 9 or 10. But around the late 90s, early 2000s when it was around 8. Right now it is at 4.25.
Here's the thing: Not every worker needs a living wage. I'm talking about students, retirees, and 2nd income earners like a stay at home mom or dad. These workers are looking for a little extra cash, a little work experience for students, and sometimes in the case of the retiree or stay at home parent, something to do.There main source of income is parents, retirement savings, or a financially successful spouse. So there is a market for workers that do not need a living wage.
It may be just another study, but found it remarkable it was done by University of Washington, commented on by the Washington Post, and if the article was read, backed as very credible by MIT. That is why it has received the coverage it has, even in left of center periodicals.What struck me is wages go up, which is not surprising. However, total take home pay goes down, which is also not surprising. A business has to make money to survive.Those that challenge this notion here, where a fixed cost (labor) rises unfettered by a gov't action without the ability to recoup those costs in a market environment (raising prices suppresses demand), leads me to believe those individuals have never had to meet a payroll, owned a business. Merely my opinion.
First, lets look at students. Yeah, what you say may be true for students that come from upper middle class/wealthy families, that their main source of income may be their parents, but for the majority of the population (and myself growing up) that is not the case. For the poor, if they want anything in life, the kids are on their own. In that regards, in 1979, working minimum wage you could pay for an entire year of tuition working less than 400 hours in the year. That means you could pay tuition and have extra cash for spending by just working a full-time summer minimum wage job. Today, to pay for college you would have to work 3400 hours at minimum wage. So almost 2 full time jobs year round. Add in attending school full-time, and every waking hour of your day would be spent in school or at work...forget studying.For 2nd income earners/retirees the minimum wage is so low that it does not make economic sense for them to enter the market, and because of this they are a rarity in the labor pool. An example would be a 2nd income earner. Child care averages $200 per week. Working 40-hours a week at minimum wage will make you $290 before taxes. It is a losing proposition. Even if you worked part-time, simply getting child care for after school (after-school baby sitter) costs $214 a week. You lose either way.Bottom line is, your statement has no merit for the bulk of the population. The minimum wage is absurdly low.
[...] In that regards, in 1979, working minimum wage you could pay for an entire year of tuition working less than 400 hours in the year. That means you could pay tuition and have extra cash for spending by just working a full-time summer minimum wage job. Today, to pay for college you would have to work 3400 hours at minimum wage. So almost 2 full time jobs year round. Add in attending school full-time, and every waking hour of your day would be spent in school or at work...forget studying.[...]
Your comparison doesn't work, simply because very few students pay for all college out of pocket. Inevitably loans are taken out at a minimum for tuition. That means for an in-state student at UW Madison the worst case scenario is a student would have to cover the real time cost of ~$14,860 a year so 2050 hours which would be the equivalent of a full time job. OK, so that's not good, I agree. However, why is the solution to increase wages as opposed to reducing the cost of college? Furthermore, the types of jobs college students can do during the year or in the summer are preciously the types of jobs that are ripe for automation and most likely impacted by a wage increase.This is a primary example of acting the symptom without impacting the root cause. And usually when you treat symptoms instead of the cause you get side effects that are usually not good.
That may have something to do with the divergent increase* in the cost of tuition relative to other goods/services rather than the relative decrease in the earnings of minimum wage jobs.*An increase made entirely possible by the federal guarantee of student loan debt, but that's a whole 'nother argument for a whole 'nother day.
The question is, how do you reduce the cost of college without impacting education? Remember, when you use a state college as an example it is heavily subsidized by taxes/state government. So that is well below actual cost. One solution is to increase the amount paid by the state. People will balk at that, but state funding for colleges have not kept up with inflation. Cutting costs is not as trivial as you think it is, and people are working on it. When it comes down to it, using the college example, there are two problems. College has outpaced inflation, and minimum wage has not matched inflation. I would also argue that inflation is not a good metric for matching how one would expect college/healthcare to increase in cost (GDP is a better metric as these entities are a microcosm of the entire economy). Tuition still outpaces GDP, but largely because of a massive increase in demand.
Let me clarify, students should have been high school students. I'll edit the above. College students are another matter.
For high school students it largely doesn't work anymore either. The majority of high school students no longer work. There was another thread discussing this. It is largely because of how much the time constraints of school have expanded and the expectations of massive extra curricular activities. In 2015, high school aged students (16-19) made up only 5.6% of those making minimum wage. 80% were 25-years or older. 74% of all minimum wage workers were working FT at minimum wage. It used to be more true, that high school students made up the bulk of minimum wage workers, but not anymore.
Which brings up a point - Has anyone posted anything regarding the trend of the percentage of people working at minimum wage vs. the workforce as a whole? For example, my kids did not have minimum wage jobs in high school - they had jobs that paid more than the minimum wage.Also, the tighter the job market, the more employers have to pay - even if it is something that is traditionally a minimum wage job. When I lived in Boston in the mid-80's, during the so-called "Massachusetts Miracle", I would often see signs posted at McDonald's that said they were paying $7 -$8 an hour. At the time, Massachusetts Minimum Wage was $3.65. I had friends back in Milwaukee who were Marquette grads who weren't making that.