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The fact is that the market is not working. If the market allows a price for labor that is below the cost of living, and if it is supported by the government with food stamps and other aid, then the market is already being tampered with in favor of the employer.
The low cost of living only occurs because of government debasement. The counter argument to that is to increase people's wages, but that doesn't work either.
It used to be back in the day you could work at a fast food restaurant is still earn a livable wage, however, due to the debasement of our currency this is no longer the case. This is even starting to effect white collar jobs as well.
So the solution to the problem isn't minimum wage standards it's to simply stop debasing the dollar.
marcus
2014 Feb 2, 4:17am
It used to be back in the day you could work at a fast food restaurant is still earn a livable wage
Tha'ts not really true. Minimum wage was never a livable wage. Which is also the reason why raising it, not even enough to keep up with inflation, should not even be an issue. It's just a minimum that is way below what one can live on.
marcus
2014 Feb 2, 4:22am
The low cost of living only occurs because of government debasement. The counter argument to that is to increase people's wages, but that doesn't work either.
Actually, when inflation occurs, wages must go up.
IF you want to argue for ways to prevent inflation from occuring, that's a separate discussion. What you seem to be arguing here is in favor of currency debasement. You are saying what ? That by totally fucking over all workers, by not allowing their wages to keep up with inflation, we may finally be able to put an end to inflation ?
Actually the opposite is true as far as I can tell.
It seems you are in favor of the net outcome of inflation being more wealth moving up to the top.
It used to be back in the day you could work at a fast food restaurant is still earn a livable wage
Tha'ts not really true. Minimum wage was never a livable wage. Which is also the reason why raising it, not even enough to keep up with inflation, should not even be an issue. It's just a minimum that is way below what one can live on.
Yes it is true. Remember the days where only the father was needed to work to provide a family of 7? Besides my father who is in his 70's remembers working at one of these places and still being able to provide for himself.
Btw, many McDonald employees get discount foods which means they pay less than the customer, which is just another added cost to the business.
They still make money on their employees. Don't be so naive. Even if you raised their pay to 12 dollars per hour, you would see little effect on the cost of big macs.
Show me the math that your statement is true. Please go visit McDonald corp, policies, finanicial statements, and etc and show me the math that this is true.
Otherwise you're just making up numbers.
Where is this low cost of living, Einstein? Because of speculation, hoarding and all, the cost of living is way higher than in the 1990's. The cost of living is so high that it is like a tax.
Government debasement of currency is only a part of it. Speculation and QE that goes to the wealthiest to speculate on commodities is the prime reason things cost more.
So you do understand that this is the problem. Yet you seem to think that minimum wage is the answer? Umm, shouldn't your answer be to stop QE and currency debasement?
Actually, when inflation occurs, wages must go up.
No this is a fallacy. Inflation occurs when the mone supply increases. Inflation has everything to do with prices rising as a economy as a whole. Sure some products will experience rising prices due to temporary high demand for the product which can be caused by sudden market changes (i.e. shovels prices for the California Gold Rush). But when the everything rises in prices that's due to monetary inflation not the laws of supply and demand. Therefore in this sense wages do not increase, since there is no new demand or rise in productivity in all the products. And that in a summary is why wages have not increased but prices have.
Once again Minimum wage is not the solution to currency debasement, getting rid of currency debasement is the only solution to currency debasement issues.
marcus
2014 Feb 2, 4:34am
Yes it is true. Remember the days where only the father was needed to work to provide a family of 7?
Yes. But what does that have to do with minimum wage ?
I had a minimum wage job in 1973 as a teenager. It paid $2.25/hr. It was just part time. But I would have had a tough time living on that full time.
Sure, it would have been a little better than $7.25 is now. But not all that much.
According to this http://www.bls.gov/data/inflation_calculator.htm
$2.25 in 1973 had the same buying power as $11.81 now. And the bureau of labor and statistics is thought by many to underestimate inflation.
Yes it is true. Remember the days where only the father was needed to work to provide a family of 7?
Yes. But what does that have to do with minimum wage ?
I had a minimum wage job in 1973 as a teenager. It paid $2.25/hr. It was just part time. But I would have had a tough time living on that full time.
Sure, it would have been a little better than $7.25 is now. But not all that much.
According to this http://www.bls.gov/data/inflation_calculator.htm
$2.25 in 1973 had the same buying power as $11.81 now. And the bureau of labor and statistics is thought by many to underestimate inflation.
1973 isn't a good time period. Cost of living increased dramatic in the 70s thanks to the removal of the gold standard. If we go back to the 1960 and before that's when standard of living was much better.
Back in 1956 the minimum wage was $1.00 paid in real stable dollars or even in silver. A $1.00 in 1956 is worth $25 today. That's how bad the U.S. government has debased our currency since then.
marcus
2014 Feb 2, 4:43am
Inflation has nothing to do with prices rising
I see.
I'm reminded of this http://patrick.net/?p=1237705
I'm not interested in that argument. I use the purchasing power definition of inflation. Your definition which presupposes the cause of purchasing power erosion is useless to me, since even if you are correct, it could take a decade for money supply to affect prices, and by then other deflationary forces such as credit market or foreign currency imbalances may have kicked in to offset things.
I'll stick to the real world application level economics and shy away from nebulous theoretical definitions. Besides, for the sake of argument, all that matters is agreement for discussion purposes of what it is we mean by inflation.
it could take a decade for money supply to affect prices,
I edited that statement. I meant inflation everything to do with rising prices, not nothing.
it could take a decade for money supply to affect prices, and by then other deflationary forces such as credit market or foreign currency imbalances may have kicked in to offset things.
It usually doesn't take decades. But it really depends how much expansion there is.
marcus
2014 Feb 2, 5:03am
Here, this is a good commentary and statistical analysis. I'm still reading it. See the graphs which show that the cause and effect relationship between money supply increase and inflation is not by any means a tight as some think (in the short and medium run).
indigenous
2014 Feb 2, 5:05am
See the graphs which show that the cause and effect relationship between money supply increase and inflation is not by any means a tight as some think (in the short and medium run).
Like right now for instance because the velocity of money is so low.
That does not mean it does not cause inflation as by definition it does.
tatupu70
2014 Feb 2, 5:46am
Back in 1956 the minimum wage was $1.00 paid in real stable dollars or even in silver. A $1.00 in 1956 is worth $25 today. That's how bad the U.S. government has debased our currency since then
Again--what the hell is wrong with you?? When one argues with you guys, it's an argument over facts, not opinions. $1.00 in 1956 is worth $8.56 in 2013.
http://www.usinflationcalculator.com/
Cost of living increased dramatic in the 70s thanks to the removal of the gold standard.
Actually it was more due to demographics, but that's neither here nor there.
If we go back to the 1960 and before that's when standard of living was much better.
And you say this because? The real reason that time period was preferable to now is because the income and wealth inequality was MUCH better than today.
tatupu70
2014 Feb 2, 5:50am
Umm, shouldn't your answer be to stop QE and currency debasement?
A weaker dollar is actually good for the US right now. It would bring jobs back here.
You seem to be under the false impression that real wages would perform better under flat or deflationary time periods. Do you have any evidence that leads you to this conclusion?
I decided i was dumb and didn't understand it so I called the Who's Who of the folks who've been around it and I said, "Why won't everybody go South?" They say, "It'd be disruptive." I said, "For how long?" I finally got them up from 12 to 15 years. And I said, "well, how does it stop being disruptive?" And that is when their jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it's leveled again. But in the meantime, you've wrecked the country with these kinds of deals. We've got to cut it out.
Ross Perot when asked about trade agreements with Mexico. Funny how, we've taken all our good jobs, sent them to Mexico, and replaced them with jobs somewhere around oh....six dollars an hour.
Like right now for instance because the velocity of money is so low.
That does not mean it does not cause inflation as by definition it does.
Yes, but there is plenty of velocity and inflation in certain sectors, such as housing (and healthcare), but for some very odd reason it's called "recovery" instead. Sounds much better anyways! ;)
indigenous
2014 Feb 2, 6:42am
Like right now for instance because the velocity of money is so low.
That does not mean it does not cause inflation as by definition it does.
Yes, but there is plenty of velocity and inflation in certain sectors, such as housing (and healthcare), but for some very odd reason it's called "recovery" instead. Sounds much better anyways! ;)
True but not what you would think after printing 6 trillion dollars.
Because the bulk of the money is in excess reserve funds because it is not being lent out. So the credit market is much less than it was.
Jon Stewart did a good editing of the show:
>> http://schiffradio.com/b/The-Daily-Show:-Intellectually-Dishonest-about-the-Intellectually-Disabled/-525361918630098994.html
The first group -- which was edited out -- was the unpaid interns who tend to value work experience and connections more than pay. (In fact, “The Daily Show†staffer who booked me, and who was present during the interview, had been thrilled to start there as an unpaid intern). Since many interns work for free, $2 per hour would be an improvement. Some interns are even willing to pay to work. Since employers are afraid to hire them without pay for fear of violating labor laws or inviting lawsuits, they often hire young people working for college credit. These individuals are forced to pay college tuition to get a job they could have had for free had there been no minimum wage.
Again--what the hell is wrong with you?? When one argues with you guys, it's an argument over facts, not opinions. $1.00 in 1956 is worth $8.56 in 2013.
Wow seriously going to use the CPLie? If you want to use the CPI sure a dollar back then is worth $8. But if you were to use GDP per capita $1 back in 1956 compared with 2012 would be almost $20. If you compare it to the overall economy it's over $36.
CPI is not a good indicator of standard of living since it has been changed so many times throughout its history.
Here are some more numbers when compared to 1956:
In 1960
$1 from CPI $1.09
$1 from GDP Per Capita $1.12
$1 from total economic output $1.21
In 1990
$1 from CPI is $4.81
$1 from GDP per capita is $8.93
$1 from total economic output $13.30
2000
$1 from CPI $6.34
$1 from GDP per Capita is $13.60
$1 from total economic output $22.90
2012
$1 from CPI $8.45
$1 from GDP per Capita $19.30
$1 from total economic output $36.10
http://www.measuringworth.com/uscompare/relativevalue.php
Edit: I find it odd that CPI stays relatively low for over 50 years but the other economic indicators tell a much different story.
tatupu70
2014 Feb 2, 8:42am
Edit: I find it odd that CPI stays relatively low for over 50 years but the other economic indicators tell a much different story.
It's called productivity.
tatupu70
2014 Feb 2, 8:44am
Wow seriously going to use the CPLie?
lol--yes, I prefer to go with actual facts and data. I prefer that over pulling numbers out of one's ass. Seriously--where did you get $25??
Edit: I find it odd that CPI stays relatively low for over 50 years but the other economic indicators tell a much different story.
It's called productivity.
Yet people's wages and purchasing power have stagnated for the last 30-40 years. If real productivity was increasing then people's wages would have increased as well. But that's not the case at all.
Wow seriously going to use the CPLie?
lol--yes, I prefer to go with actual facts and data. I prefer that over pulling numbers out of one's ass. Seriously--where did you get $25??
CPI isn't telling the real story it doesn't include things like home sales and energy or even food for the matter. It tends to subcategories food and even homes in a different manner.
So yes the data they present is factual but it doesn't tell the story of higher cost of living since they're not using the right variables in the data.
tatupu70
2014 Feb 2, 9:00am
Yet people's wages and purchasing power have stagnated for the last 30-40 years. If real productivity was increasing then people's wages would have increased as well. But that's not the case at all
In aggregate, they have. The problem is that inequality has also grown dramatically so medians don't show it.
tatupu70
2014 Feb 2, 9:03am
CPI isn't telling the real story it doesn't include things like home sales and energy or even food for the matter. It tends to subcategories food and even homes in a different manner.
Yes it does. As I've posted on here numerous times--CPI includes housing costs, food costs, and energy costs.
There is also something called core CPI which excludes food and energy because they are more volatile and can skew the numbers. But the straight CPI DOES include everything in the basket of goods.
Like I said--I've spent the past 6 posts correcting all your factual inaccuracies. Which is how most debates go on here anymore.
Yet people's wages and purchasing power have stagnated for the last 30-40 years. If real productivity was increasing then people's wages would have increased as well. But that's not the case at all
In aggregate, they have. The problem is that inequality has also grown dramatically so medians don't show it.
Honestly, I think most of the productivity comes from the top, so yes there is inequality in that sense. But productivity in the average worker, I am willing to bet is down considering that real not official unemployment is high and also because most people are on some form of social welfare and not working or if they are only part-time.
But the problems with the inequality we're experiencing are the barriers of entry to form a business. There are too many hoops and barriers for one to cross if they were to start a business and try to compete with the big dogs. Since they remain at the top and stay at the top thanks to government policies and bailouts income inequality will always remain. Truth is there is no competition with wall street and that's why the wealth gets concentrated to the top.
tatupu70
2014 Feb 2, 9:45am
Honestly, I think most of the productivity comes from the top
lol--I'm sure you do.
But productivity in the average worker, I am willing to bet is down considering that real not official unemployment is high and also because most people are on some form of social welfare and not working or if they are only part-time.
So, in your opinion, it's not the lower level workers that are doing more, it's the CEOs? The companies that are doing more with less these days--they are employing fewer CEOs and VPs?? That is really what you think?
smaulgld
2014 Feb 2, 9:45am
Actually, when inflation occurs, wages must go up.
that may be but they don't necessarily rise at the same rate. In the mid and late 70's price inflation outstripped wage inflation creating the phenom of stagflation.
The circumstance are similar today with the fed trying to hit its inflation target in deflationary times, while wages are not rising
smaulgld
2014 Feb 2, 9:55am
Schiff inartfully compared the ability of capitalist and socialist economies to provide goods and services by saying-"people don't go hungry in a capitalist economy." They do.
The point is that lack of goods, food and bread lines are more common in socialists countries like the USSR, Cuba and modern day Venezuela that in capitalist ones.
smaulgld
2014 Feb 2, 10:02am
Yeah do what Singapore is doing, remove minimum wage. It causes more problems than it creates.
Damn you must be a new world order Zionist. You want total destruction of main street don't you?
Singapore from the little I know is a real mixed bag-it has "free markets", yet is very restrictive in personal freedom with plenty of rules on what you can do and say and it has workfare.
Here is a short article on singapore. Would like to learn more
http://www.mws.org.sg/Dispatcher?action=SocialIssueTopic&id=Sc12ce388725076
Yeah do what Singapore is doing, remove minimum wage. It causes more problems than it creates.
Damn you must be a new world order Zionist. You want total destruction of main street don't you?
Singapore from the little I know is a real mixed bag-it has "free markets", yet is very restrictive in personal freedom with plenty of rules on what you can do and say and it has workfare.
Here is a short article on singapore. Would like to learn more
http://www.mws.org.sg/Dispatcher?action=SocialIssueTopic&id=Sc12ce388725076
Singapore looks for market mechanisms to solve any problem involving cost.
Vicente
2014 Feb 2, 10:57am
Schiff inartfully compared the ability of capitalist and socialist economies to provide goods and services by saying-"people don't go hungry in a capitalist economy." They do.
USA USA USA!
Guys like Schiff never want to talk about socialist countries which do a GREAT job of feeding their people. Typical. Still trapped in a Cold War paradigm, socialism=Commie=bread lines. They cannot explain Norway, France, Denmark so they just ignore them. Those aren't "real" countries I suppose.
marcus
2014 Feb 2, 11:22am
70's price inflation outstripped wage inflation creating the phenom of stagflation
I thought stagflation was when we have inflation and recession simultaneously.
marcus
2014 Feb 2, 11:23am
Honestly, I think most of the productivity comes from the top
lol--I'm sure you do.
Of course, didn't you know it's capital that does the heavy lifting.
And watching rents go up is especially strenuous.
Schiff inartfully compared the ability of capitalist and socialist economies to provide goods and services by saying-"people don't go hungry in a capitalist economy." They do.
USA USA USA!
Guys like Schiff never want to talk about socialist countries which do a GREAT job of feeding their people. Typical. Still trapped in a Cold War paradigm, socialism=Commie=bread lines. They cannot explain Norway, France, Denmark so they just ignore them. Those aren't "real" countries I suppose.
The problem is with these definitions, similar to left and right and republican vs democrat. Many of those countries don't have any minimum wage, but their unions and employers usually come to good agreements in most sectors. Rent control has been removed or lifted in a lot of European countries known as "socialistic". Capital gains tax is all over the place but usually less taxed than income (some have no cap. gains tax). If you look at the progressive tax rates, a lot of these "socialist" countries tax less than the US, some have flat taxes. And they don't continuously bai out underwater home owners and bankers, so less socialism there as well. Grouping countries in these terms becomes more and more meaningless.
cannot explain Norway, France, Denmark so they just ignore them
Actually, you should know, Norway has no minimum wage, even though average fast food workers make more over there. Germany also does not have one yet. Even Denmark doesn't have a strict minimum wage. They do have other social programs. But they are not more socialist in every respect.
France does have the highest minimum wage, and we know great French economy has been lately.
Vicente
2014 Feb 2, 2:05pm
Norway has no minimum wage
When something like 1/5th of Norwegians are Union members, you don't need it. The American minimum wage is a pathetic shred of labor protection by comparison.
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