Minimum Wage Increase Blocked in Senate

[Ogie Oglethorpe]

What other 100 hour initiatives have passed so far seeing as this was the major one?

Leadership

[Imran Siddiqui]

All of them have passed the House, IIRC.

[Fake Boris]

Originally posted by Kuciwalker

The net effect is indeed negative towards employment growth. That effect, judging by numerous studies, has been greatly exaggerated. The real effect is small if the increase is small and since there has been no increase in the minimum wage in 10 years the net effect is likely to be quite small. The reason is the labor market has already passed the price point which would be the new minimum wage. Nearly everyone already makes more then the proposed $7.25 per hour wage. Thus the effect will be small.

Thus, the minimum wage is damaging to exactly the degree it has any influence at all. This is a great recommendation for it how?

It helps the unfortunate who earn the minimum wage.

[Fake Boris]

Originally posted by DinoDoc
Well I'm sure the teenagers are very pissed at the GOP right now but they'll forget it in the morning.

I love that line. As if a McDonald's owner desserved the money more than a middle class teenager.

[DinoDoc]

I'm sure he'll be real happy with his government mandated raise when he gets fired.

[Jon Miller]

But if the company can pay more, and are making money (which most are), they won't fire him. As that would cause them to make less money.

The higher minimum wage = higher unemployment only works if there are people who switch from making the business more profitable to less profitable as the wage is increased.

Basically things aren't that simple. If there are very few businesses were having an extra person for X dollars is worth it but having an extra person for Y dollars is not (where X->Y is the wage increase) then very few people will become unemployed based on this and a lot of incomes will rise.

JM

[Kuciwalker]

Originally posted by DinoDoc
Well I'm sure the teenagers are very pissed at the GOP right now but they'll forget it in the morning.

They ought to be pissed at the Dems.

[Kuciwalker]

The higher minimum wage = higher unemployment only works if there are people who switch from making the business more profitable to less profitable as the wage is increased.

Nope. It means there's a lower ROI on an investment in a McDonald's store, which means investors will invest in something else fire, which means fewer new McDonald's (skip the snarky comments please).

[Jon Miller]

Umm, if there is money to be made there, generally someone will fill the nitch. The fact that it is a bit less money won't cause a decrease in investment as long as a decent amount of money is being made.

I agree, if it dropped profits enough there would be negative results. But that isn't a sure thing.

JM

[Kuciwalker]

Umm, if there is money to be made there, generally someone will fill the nitch. The fact that it is a bit less money won't cause a decrease in investment as long as a decent amount of money is being made.

Yes it will. Obviously. If something is less profitable fewer people will invest in it.

[Jon Miller]

Not necessarily. There is such a thing as saturation. For example, for many markets McDonalds is saturated.

There are people who would invest in McDonalds (based upon profit margins), but higher investment won't increase profits and so they don't.

So if McDonalds is (slightly) less profitable, some people who did invest in it would quit (as it no longer was profitable enough for their investment), but others who were eager to invest at that profit return now can.

Jon Miller

[Zkribbler]

Originally posted by Shogun Gunner
Its well established in Economic circles around the world that putting a price floor on labor (minimum wage) results in unemployment. Its a bad move.

That's what the Repugs said the last time the minimum wage was increased -- and we got a stronger economy. We've since raised the minimum wage in California, and again, we got another economic surge.

The bottom line is, that if you put more money into the pockets of consumers, they will spend it.

[Ogie Oglethorpe]

At the evil wahlmart buying Chinese goods.

[Zkribbler]

Originally posted by Ogie Oglethorpe
At the evil wahlmart buying Chinese goods.

Ha! With the extra cash, they'll be able to afford upscale stores, like Target.

[Admiral]

The McDonalds argument is bogus, because the fact is that the minimum wage would apply across the board, not just to McDonalds. And foreign markets don't really qualify, because there are tons of political reasons why investors might be reticent to move their money to third-world markets.