Monday, July 27, 2009

I just don't understand this one...

I wonder if raising the minimum wage will hurt a big chain store more, or a mom and pop store?
I also wonder if raising the minimum wage will slow down how quickly the people right above minimum wage will get raises? 
...and - if minimum wage increases, then the cost of goods will increase (it has to, don't be naive) so will that hurt rich people more, or poor people?  Let's factor in that the great majority (over 2/3rd's) of people aren't making minimum wage, and the great majority of the people making it are in the food service and rely on tips.  We're already at a historic low in the number of people earning minimum wage - and that number is cut by 2/3rds when you factor in tips.
Last thing - Oregon is #2 in the nation in unemployment.  Oregon?  But they don't have the crazy industry blow up thing that #1 Michigan has...what's different about them?  They lead the nation in highest state mandated minimum wage.  So if you care about small business or folks struggling to pay their grocery bills and find a job, would you increase the minimum wage?
To quote Al Gore on another subject, "This is a moral issue" (side note - I thought he was against legislating morality)


  1. Murph,

    As a native Oregonian (and longtime expatriate), perhaps I can speak to that issue a bit. What's happening in Oregon now is, I believe, the fallout resulting from about 30 years of Californication. To keep this short and non-rant-ageous...people from California discovered Oregon in the early 70s, came up there with lots of cash and started buying real estate. Pretty soon the locals found themselves priced out of the home-buying market in their own neighborhoods. The CA folks also brought with them new ideas about resource conservation, politics, etc, etc. My family (and most others) had for generations relied on logging and farming to live. Now the farms became subdivisions, and logging became a crime. Jobs disappeared and never came back. This directly impacted my own family(loggers & farmers) I don't think there has ever been a recovery from that. Add the current economic problems to that and it's not hard to see why they are hurting. I'm sure this is grossly oversimplified, but that's my take on it. Now...what was this about?

  2. I've NEVER understood how raising minimum wage does ANYTHING AT ALL to help people making minimum wage. Inevitably, prices must go up to pay the workers who work for minimum wage, resulting in inflated prices due to the minimum wage increase. Seems ike a vicious circle - and very unwise - to me.

  3. Doesn't every country legislate morality to some degree or another?

    I just never got that one..

  4. I'm not smart like you guys are. Maybe supply and demand should indeed set wages, but how do you balance an ebb and flow of seasonal market changes without exploiting the most vulnerable workers?

    As for wage hikes contributing to inflation, how is that going to affect the current situation of unemployment when the government's consumer price index has fallen in the last 12 months?

    Like I said, I'm not smart so you might have to keep the answer simple for me. All the stuff I wrote above was influenced by the NPR coverage of the issue.

  5. dk
    it's always been a dumb argument

  6. Braggalicious,
    I'm still not comfortable calling you that, but if you insist...
    I'm not sure I see how wage hikes affecting unemployment (just going on history on that one...and a little bit of logic)is changed by the cpi falling? Unless we don't want them to fall...or we think that the cpi falling is going to help mom and pop stores make a profit, & the wage increase won't hurt them. That seems unlikely.
    I'm also not sure I consider high school kids, part time workers or waiters our most vulnerable (or certainly desperate) workers. I do think this will increase the cost of the cereal/shoes/rent/fill in the blank for anything else people buy

    that's gotta hurt the guy making $8 an hour more than it'll hurt your butler (do you still pay him $11 an hour?)

  7. I suppose you are correct about the relationship between (un)employment issues and the CPI. But overall we're talking about $5 billion in a $14 TRILLION economy.

    Since this is going to affect high school students, part timers, general laborors, and other non-exempt employees who need to buy shoes, cereal, and pay rent, don't we want to give them some extra $$ to spend while the prices are (probably) temporarily lower due to the CPI having declined so they can spend more money and strengthen an already strengthening economy?

  8. And my butler is not aware of current fair labor practices because I keep him illiterate and away from any media which will inform him of social justice. It makes things easier in the long run.

  9. Sean,

    Why do you hate poor people?

  10. Bragg,
    I'm not sure if giving part time employees/students/whoever a raise now that will drive up prices forever is a smart move in the long run. A bigger check at first might seem better, without further examination...I just htink we owe it to everyone to maybe look a layer or two deeper.

  11. I think raising the minimum wage hurts midsize companies (100 to 500 employees) the most; at least in the manufacturing sector. This increase is $350 per hour for an employer with 500 people. Sure the business will try to increase pricing where they are able but a group of these small businesses will price themselves out of the market. This loss of business will make it more difficult for these guys to operate in a tough economic climate. That’s how this type of thing causes layoffs. They need to increase efficiency and reduce head count to compete. Not that I think the minimum wage should never be raised. I just think you need to time these things. Interesting brief.

    Bridging the Low-Wage -Livable-Wage Employment Gap