Good news from Arkansas! (Minimum wage increase)

[DanS]

The CIA has old numbers.

In any event, you would have to normalize these figures for the business cycle to learn anything of significance.

[Imran Siddiqui]

Originally posted by Sandman
Ok - why is Britain different? Invoking vague, undefined differences doesn't strike me as a good argument. Especially since those making it usually know exactly what sort of economy poor countries in the developing world should adopt - hardcore capitalism. Despite the presumably much greater differences.

Who knows exactly what economic effects social/political/moral differences have various countries? However, it doesn't take a rocket scientist to realize that the economies are not the same due to political, social, and moral considerations (look at universal health care for an example, or the Anglican Church, or military spending as a % of GDP). A country may have some quirk (ie, lack of universal health care in the US) which makes direct comparison difficult, if not impossible.

I mean there is no one that says if Zimbabwe adopts the entire economic structure of the US, it'll make the same in per capita GDP a year. There is more to it than simply that.

[Ogie Oglethorpe]

Exactly results of a given population universe can not be compared to results of another population universe. Duhhh what do they teach these days?

[Kidlicious]

Originally posted by Donegeal
Here Kid:

As someone who owns and runs a small business (no employees... yet ), this is what I would do if I did employ minimum wage employees and the min went up...

A) Raise prices (inflation)
B) Downsize (unemployment)

Try not looking at it just from the viewpoint of the people getting the raise... look at it from both sides.

Well a lot of people who run businesses into the ground.

I wouldln't follow what you learned in economics when making a decision like that. If you have any business training follow that. Maximizing profit in the short run is not the same as maximizing it in the long run. If you raise prices or downsize you are going to lose customers to your competitors.

[Adam Smith]

Originally posted by Sandman
The UK minimum wage is £5.05, or about $9, with lower unemployment that the US. How is this possible, minimum wage haters?

You might start with the fact that the UK apparently has a minimum wage that varies with age (proxy for experience / productivity), while the US does not. You quoted only the top tier rate. This is only one of several factors that have not been held constant in making the comparison across countries.

http://www.dti.gov.uk/er/nmw/

The minimum wage is a legal right which covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different groups of workers as follows:
The main rate for workers aged 22 and over is currently set at £5.05 an hour. On 1 October 2006 this will increase to £5.35

The development rate for 18-21 year olds is currently set at £4.25 an hour this will increase to £4.45 on 1 October 2006

The development rate for 16-17 years olds. This rate is £3.00 an hour. This will increase on 1 October 2006 to £3.30 an hour

On 1 October 2006 the rate of the accommodation offset will increase to £29.05 per week (£4.15 per day). The current rate is £27.30 per week (£3.90 per day)

[lord of the mark]

Originally posted by Kidicious


It's an income tranfer so the overall effect is probably minimal, just as it is with increasing the minimum wage.

edit: I'm assuming that you don't believe that people will work less because to the higher taxes.

If you believe the supply of highly skilled labor (and all other factors for which people are paid high incomes) is perfectly inelastic, than increasing taxes on those with higher incomes would NOT have a deadweight loss. Compare that to the claimed inelasticity of demand for low wage labor. We're talking competing elasticities here. An empirical question, not answerable a prior as I said.

[Sandman]

Originally posted by Imran Siddiqui
Who knows exactly what economic effects social/political/moral differences have various countries? However, it doesn't take a rocket scientist to realize that the economies are not the same due to political, social, and moral considerations (look at universal health care for an example, or the Anglican Church, or military spending as a % of GDP). A country may have some quirk (ie, lack of universal health care in the US) which makes direct comparison difficult, if not impossible.

I mean there is no one that says if Zimbabwe adopts the entire economic structure of the US, it'll make the same in per capita GDP a year. There is more to it than simply that.

Well, now I feel a bit aggrieved that US posters regularly offer their true and accurate views of what France should do, but I'm not allowed to make similar pronouncements regarding the US because of handily vague differences.

[Sandman]

Originally posted by Adam Smith
You might start with the fact that the UK apparently has a minimum wage that varies with age (proxy for experience / productivity), while the US does not. You quoted only the top tier rate. This is only one of several factors that have not been held constant in making the comparison across countries.

That's correct about the UK, although whether six years at the most really matters is debateable. Besides, the US minimum wage is reduced in certain circumstances as well.

[Kidlicious]

Taxes and costs really don't drive business decisions much in the relevant range. Consumer demand is a much stronger factor. Higher wages and taxes affect prices in the long run, but not production decisions and decision to work in the short run.

It's a good think that we have minimum wage laws. Otherwise people would be getting paid as if they lived in a third world nation and there wouldn't be much more employment at all. Probably there would be less because there would be less immigration.

[Velociryx]

I actually agree with Kid about something.

I am in favor of minimum wage laws, and wish they were greatly strengthened, including an immediate push to offer a higher wage floor (to something that would actually resemble a living wage), and annual adjustments for inflation--an even better idea, peg the minimum wage to politician salaries. Make it so they can't vote themselves a raise without raising the minimum wage.

Unfortunately, that's about the only part of Kid's post I agree with. Especially

Otherwise people would be getting paid as if they lived in a third world nation and there wouldn't be much more employment at all. Probably there would be less because there would be less immigration.


which is pure tripe.

It's a start tho...

-=Vel=-

[Imran Siddiqui]

Originally posted by Sandman
Well, now I feel a bit aggrieved that US posters regularly offer their true and accurate views of what France should do, but I'm not allowed to make similar pronouncements regarding the US because of handily vague differences.

You are confusing two issues. Posters who say what France should do are focusing on France with all of its economic differences. Same with those who say what the US should do. It is an intraeconomy viewpoint.

This is vastly different than saying if X country has Y law, then Z measure should be exactly the same as AA country's Z measure, and if not then I've proven something.

Ie, saying decreasing min wage will raise employment in France is a far sight different than saying since France has such a large min wage compared to the US, it will always have more unemployment than the US as long as the wage is so high.

although whether six years at the most really matters is debateable

A majority of min wage earners are in their teens. So 6 years does matter a lot here.

[Gibsie]

Originally posted by Darius871
I'm saying it's possible because I did live it for several years. From your attitude I can tell you never have.

I lived at the UK's minimum wage, which was hard, but not impossible (But then it is nearly double the US's) for a year. But then my rent was about double yours.

But anyway, yes, of course, minimum wage is easy for everyone, form all walks of life. People who are poor are like that out of choice, too.

[Darius871]

I never said any such thing and you know it. Of course genetic assets and environmental influences during early acculturation affect one's ability to responsibly manage a budget and not knock somebody up/get knocked up. That's not in dispute.

I was merely disproving the assertion by you and Jon that you can't "live" on U.S. minimum wage. You can both live on it and produce a surplus to save, as long as you have the right personality. That's all.

[Jon Miller]

Originally posted by Darius871
I never said any such thing and you know it. Of course your genetic assets and environmental influences during early acculturation affect one's ability to responsibly manage a budget and not knock somebody up.

I was merely disproving the assertion by you and Jon that you can't "live" on minimum wage. You can live on it and have a surplus to save, if you have the right personality. That's all.

no you didn't

you live in some cheap part of the country

you can't live in the area where I go to school, and find those sort of prices...

JM

[Imran Siddiqui]

This attempt to basically demonize Darius is quite strange. He was just pointing out that in some situations a person can live on the min wage. It does happen.