effect of minimum wage

[jmcon007]

I've been wondering..

If the minimum wage is increased from it's current poverty amount to something like $8 or $9, wouldn't that increase Social Security revenues in a significant way? Or would that just be a wash because of something else?

I know Republicans would say raising the minimum wage would be regressive and that there would have to be layoffs...which I seriously doubt. But, I would think that what a business would "lose" with a bigger payroll would be made up by increased productivity due to employee moral and, frankly, that money is going right back into the economy which should increase sales.

The thing I have never had explained to me by the trickle-down theorists is: If I'm running my business lean and mean with production exactly meeting demand, why would I hire more employees just because the government gives me a big tax break? The tax break doesn't increase demand, except for maybe the peanuts we get and turn around and spend once a year.

I believe most of us would spend more if we had more. So if the minimum wage isn't considered by the Republicans as just simply the decent thing to do, let them call it a tax break for the lower income workers amongst us. It makes good economic sense to me.

[Warpy]

1. Yes, it would increase FICA payments

It would also put more money into a lot of pockets, money which would increase demands for goods and services, which means it would increase the robustness of the 66% of the economy of the US that is consumer driven.

Unfortunately, DEMAND SIDE ECONOMICS is being ignored by both parties in Congress, who side with business owners who scream poverty, not realizing they'd see an increase in business that would wipe out what they would have to pay in increased wages for their marginal staff.

While they all cling to the ficiton of supply side economics, there will continue to be downward pressure on wages from HB-1 visa abuse and outsourcing, along with a fight on both sides of the aisle against giving full time workers enough of a wage to live on, if not save on.

[jmcon007]

2. amen

[dcfirefighter]

3. increasing demand

There are some economic situations where raising the minimum wage would not mean less employment, but the overall effect is uncertain. Raising the minimum wage is a treatment of a symptom, not the root cause.

Segway into part a Dem 'Fix' for SS...all of the natural wealth owned by the federal gov't should be rented out at auction, with the proceeds divided equally amongst citizens. This is not a trivial amount, and most of it is currently given away at sub-market rates as political favors to the well-connected. This would include mineral rights, timber rights, grazing rights, fishing rights, broadcast rights, even patent rights and pollution permits. Such auctions would not raise prices at current use levels, as the producers merely charge market rates for their products and pocket the windfall. If we reduced usage, as in pollution permits, prices would go up, but so would revenue . . . and those who consumed less, including the poor, would largely be subsidized for having a smaller than average economic footprint. In other words, they'd receive more in dividends than they'd pay in higher prices.

Alaska does a similar thing for it's state residents, based on oil royalties, to the tune of ~$1000 a year per person.

Having a basic universal income, even if the amount is sub-poverty level, would go a long way to feeding the demand, which would then improve wages and returns to investment.

[hfojvt]

5. I would love to see a study of labor costs

For example. I worked in a factory putting cups into a machine. If the machine was running decent, I could load about 10 boxes per hour. There are over 1000 cups in a box. I would be surprised if a box cost less than $10, but even at $5 a box, the cups cost $50 an hour and my wages only cost $8. Therefore, isn't my wage a very minor part of total costs? With even a $2 increase, it is still a minor part. Then there is the whole temp thing. Since they were paying a temp agency some $2 an hour for every hour I worked it seems like they could hire me and pay me the $2 in the form of benefits and have no change in their total costs. But why should they do something logical like that?

[uberotto]

4. Don't call it a tax break...

Refer to it as "Increasing the Tax burden on the Working poor" by raising the minimum wage.

Every Republican knows that the poor don't pay enough in tax...

You might even try saying that "You are transferring the Burden of Welfare from the Middle Class by forcing Welfare Recipients to accept a higher salary and in turn pay more into the Welfare system in the form of increased tax revenues from the Working Poor".

Again, Republicans like to try to "Force" the poor to stop being poor. All Republicans know that poor people are poor because they choose to be (or they couldn't get that really great, high paying job they deserve, because the government requires all of those jobs to be given to minorities).

[jmcon007]

6. great points....

I appreciate the great points made.

George Bush was quoted once as saying, "Poor people are poor because they are lazy."

That would have gotten this fool a bloody nose if he would have ever said something like that around my dad in the 50s. I could define "lazy" as Bush spending at least 40% of his time either at Crawford or Camp David. He's never turned a tap in his life and he thinks he's qualified to lecture about laziness?
Is it possible we can have someone so hopelessly shallow and ignorant in the Oval Office?