welfare vs wages

[Danzig]

Raising the minimum wage as a tool for economic growth
The immediate benefits of a minimum-wage increase are in the boosted earnings of the lowest-paid workers, but its positive effects would far exceed this extra income. Recent research reveals that, despite skeptics’ claims, raising the minimum wage does not cause job loss.6 In fact, throughout the nation, a minimum-wage increase under current labor market conditions would create jobs. Like unemployment insurance benefits or tax breaks for low- and middle-income workers, raising the minimum wage puts more money in the pockets of working families when they need it most, thereby augmenting their spending power. Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.

Increasing the federal minimum wage to $10.10 by July 1, 2015, would give an additional $51.5 billion over the phase-in period to directly and indirectly affected workers,7 who would, in turn, spend those extra earnings. Indirectly affected workers—those earning close to, but still above, the proposed new minimum wage—would likely receive a boost in earnings due to the “spillover” effect (Shierholz 2009), giving them more to spend on necessities.

This projected rise in consumer spending is critical to any recovery, especially when weak consumer demand is one of the most significant factors holding back new hiring (Izzo 2011).8 Though the stimulus from a minimum-wage increase is smaller than the boost created by, for example, unemployment insurance benefits, it has the crucial advantage of not imposing costs on the public sector.

Assessing the economic benefits of a minimum-wage increase
Showing that raising the minimum wage would be a tool for modest job creation requires an examination of the stimulative effects of minimum-wage increases. Because minimum-wage increases come from employers, we must construct a “minimum-wage increase multiplier” that takes into account the increase in compensation to low-wage workers and the decrease in corporate profits that both occur as a result of minimum-wage increases. Raising the minimum wage means shifting profits from an entity (the employer) that is much less likely to spend immediately to one (the low-wage worker) that is more likely to spend immediately. Thus, increasing the minimum wage stimulates demand for goods and services, leading employers in the broader economy to bring on new staff to keep up with this increased demand.When economists analyze the net economic stimulus effect of policy proposals (e.g., tax rate changes that boost income for some and reduce it for others), they use a set of widely accepted fiscal multipliers to calculate the total increase in economic activity due to a particular increase in spending. In applying these multipliers, economists generally recognize a direct relationship between increased economic activity and job creation. This analysis assumes that a $115,000 increase in economic activity results in the creation of one new full-time-equivalent job in the current economy.9

Using these same standard fiscal multipliers to analyze the jobs impact of an increase in compensation of low-wage workers and decrease in corporate profits that result from a minimum-wage increase, we find that increasing the national minimum wage from $7.25 to $10.10 per hour by July 1, 2015, would result in a net increase in economic activity of approximately $32.6 billion over the phase-in period, and over that period would generate approximately 140,000 new jobs (see Appendix for methodological details).10 In fact, the hike in the federal minimum wage would create jobs in every state, as seen in Appendix Table 1. (Detailed state-level breakdowns of the demographics of workers who would be affected by the increase—and the degree to which the wages of various types of workers would rise—are available here.) Though the resulting employment impact is modest in the context of the millions of workers currently unemployed nationwide, creating tens of thousands of jobs would be a step in the right direction and would boost the economy.

The benefits of a minimum-wage increase in a weak labor market
Examining the positive effects of a minimum-wage increase leads to an overarching discussion of the economic case for increasing the earnings of the lowest-paid workers while the labor market is weak. In the current economic climate, nearly everything is pushing against wage growth. With 3.4 unemployed workers for each job opening (Shierholz 2013), employers do not have to offer substantial wages to hire the workers they need, nor do they have to pay substantial wage increases to retain workers. Indeed, between 2009 (when the last minimum-wage increase took place) and 2011 (the most recent year for which data are available), nearly every state experienced wage erosion at the 20th percentile (according to an analysis of Current Population Survey data).

Even conservative economists suggest higher wages might help speed the recovery. American Enterprise Institute scholar Desmond Lachman, a former managing director at Salomon Smith Barney, told The New York Times, “Corporations are taking huge advantage of the slack in the labor market—they are in a very strong position and workers are in a very weak position. They are using that bargaining power to cut benefits and wages, and to shorten hours.” According to Lachman, that strategy “very much jeopardizes our chances of experiencing a real recovery” (Powell 2011).

Furthermore, the national unemployment rate currently stands at 7.7 percent and is not expected to return to prerecession levels for several years. Considering the past year’s sluggish job growth rate, a minimum-wage increase that creates about 140,000 net new jobs would help strengthen the recovery.Conclusion
The multiple positive effects that would result from a higher minimum wage are clear: It would boost the earnings of working families hardest hit by the Great Recession, spur economic growth, and create about 140,000 net new jobs. In an economic climate in which wage increases for the most vulnerable workers are scarce, raising the minimum wage to $10.10 by July 1, 2015, is an opportunity that America’s working families cannot afford to lose.

[Rudeboyelvis]

I'm trembling at the thought that we are witnessing the reincarnation of Riot.

You keep quoting the same flawed labor-union sponsored, labor-union paid for study. It is complete biased crap that says only what the labor unions want it to say. Common sense dictates that an imposed rise in labor costs will be passed on to the consumers - If corporations thought they would increase profit by paying higher minimum wages, do you honestly think they wouldn't? Do you honestly believe that they do not have economists staffed to determine precisely what wage scale would generate the most return on investment? To assume that Employers are either too naive or short-sighted to see how great/profitable their companies would operate if they paid unskilled labor higher wages - is ironically naive and short-sighted.

Economic Policy Institute:

EPI advocates for low- to moderate-income families in the United States. EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.

that doesn't make them bad, it just makes them biased.

Funding:

Eight labor unions made a five-year funding pledge to EPI at its inception: AFSCME, United Auto Workers, United Steelworkers, United Mine Workers, International Association of Machinists, Communications Workers of America, Service Employees International Union, and United Food and Commercial Workers Union.

http://en.wikipedia.org/wiki/Economic_Policy_Institute

It's disingenuous to keep cutting and pasting quips from this document like it is some sort of "independent" study.

Free markets cannot survive when employers are coerced and strong-armed into paying higher than market-priced wages for unskilled labor. Instead of encouraging this behavior, perhaps these folks clamoring to be overpaid might be better served to be encouraged to take accountability for themselves instead. That's the way it used to work at least.

[Danzig]

Originally Posted by Rudeboyelvis

I'm trembling at the thought that we are witnessing the reincarnation of Riot.

You keep quoting the same flawed labor-union sponsored, labor-union paid for study. It is complete biased crap that says only what the labor unions want it to say. Common sense dictates that an imposed rise in labor costs will be passed on to the consumers - If corporations thought they would increase profit by paying higher minimum wages, do you honestly think they wouldn't? Do you honestly believe that they do not have economists staffed to determine precisely what wage scale would generate the most return on investment? To assume that Employers are either too naive or short-sighted to see how great/profitable their companies would operate if they paid unskilled labor higher wages - is ironically naive and short-sighted.

Economic Policy Institute:

EPI advocates for low- to moderate-income families in the United States. EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.

that doesn't make them bad, it just makes them biased.

Funding:

Eight labor unions made a five-year funding pledge to EPI at its inception: AFSCME, United Auto Workers, United Steelworkers, United Mine Workers, International Association of Machinists, Communications Workers of America, Service Employees International Union, and United Food and Commercial Workers Union.

http://en.wikipedia.org/wiki/Economic_Policy_Institute

It's disingenuous to keep cutting and pasting quips from this document like it is some sort of "independent" study.

Free markets cannot survive when employers are coerced and strong-armed into paying higher than market-priced wages for unskilled labor. Instead of encouraging this behavior, perhaps these folks clamoring to be overpaid might be better served to be encouraged to take accountability for themselves instead. That's the way it used to work at least.

for starters, let's try to stay on topic. i'm not riot, and never will be.

do you wish to continue to subsidize low paid workers thru welfare?
and why is it that before, corporations could pay a living minimum wage, but now they can't?
overpaid? below federal poverty level is correct pay? living at poverty level is overpaid?
as for unskilled-define unskilled. as has been shown, many of these 'unskilled' workers are in these jobs because of layoffs in their previous field, many have a skill, a degree, or at least some college.

as for corporations, they are like racetracks, they only consider their own slice of the pie without looking at the bigger picture. and since we taxpayers help these same corporations thru tax deals, subsidies and the like, the least they could do is pay their workers enough that we wouldn't have to subsidize both employer and employee.




it's a simple question-do we want corporations who make billions in profits to pay their workers enough to get off welfare, or do you want to continue to help these people get by via welfare?


'EPI advocates for low- to moderate-income families in the United States. EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.' sounds good to me, since i'm a member of a working family-the backbone of this country.

[Danzig]

'In July 2012, EPI joined forces with the AFL-CIO, Center for Community Change, Leadership Conference on Civil and Human Rights, National Council of La Raza and SEIU to propose a budget plan titled Prosperity Economics, a counter to the Republican Party's Path to Prosperity budget plan. The Prosperity Economics plan suggests that major public investment in areas like infrastructure is needed to jump-start the economy.'

thanks for the wiki link. i agree, we need a lot of funding in infrastructure. that's been said for some time, and was something i said a vast majority of the stimulus should have gone to. it would have paid dividends. improved infrastructure in needed areas, while creating jobs for those who would do the work, which would have aided the economy. far better than a bail out of a car maker, and us later selling the stock at a loss.


rudeboy, as for those who are the working poor...if you want to just maintain the current status quo, just say so. i'm saying there's an alternative, that would take that load off the taxpayers backs.
if you have a better plan, i'd love to hear it.

[Rudeboyelvis]

Originally Posted by Danzig

for starters, let's try to stay on topic. i'm not riot, and never will be.

do you wish to continue to subsidize low paid workers thru welfare?

Prove that forcing Employers to overpay wages for unskilled jobs will decrease "workfare". I'm only asking because there are actual studies done by independent sources that proclaim quite the opposite. It would actually, in effect, lead to higher unemployment and hyper-inflation.

and why is it that before, corporations could pay a living minimum wage, but now they can't? overpaid? below federal poverty level is correct pay? living at poverty level is overpaid?

Are we talking about the same thing? I thought this was a minimum wage discussion. This is a completely different discussion


as for unskilled-define unskilled. as has been shown, many of these 'unskilled' workers are in these jobs because of layoffs in their previous field, many have a skill, a degree, or at least some college.

this is a more accurate analogy:

http://www.forbes.com/sites/quora/20...age-to-20hour/

as for corporations, they are like racetracks, they only consider their own slice of the pie without looking at the bigger picture. and since we taxpayers help these same corporations thru tax deals, subsidies and the like, the least they could do is pay their workers enough that we wouldn't have to subsidize both employer and employee.

You keep at this, like somehow these evil employers are forcing us to pay for their sins - please prove this. Show one instance, where a corporate federal tax break / subsidy is directly related to employing minimum wage workers.


it's a simple question-do we want corporations who make billions in profits to pay their workers enough to get off welfare, or do you want to continue to help these people get by via welfare?

This is again, not an accurate representation of how corporate employment works. Employers are not emboldened to insuring a thriving economy - they require people to run their operations and pay what is required to do so. If they require higher quality talent, they pay more to get it.

Minimum wage jobs were never the backbone of our economy - even today, as you continue to try and refute, the overwhelming majority of people working at or below the federal minimum wage are teenagers below the age of 25. This is from the DoL, Bureau of Labor Statistics, not some paid-for organized labor paper.

http://www.bls.gov/cps/minwage2012.htm

'EPI advocates for low- to moderate-income families in the United States. EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.' sounds good to me, since i'm a member of a working family-the backbone of this country.



Sounds good to me too. As I said, it doesn't make them bad, just makes them biased.

...

[Danzig]

Originally Posted by Danzig
for starters, let's try to stay on topic. i'm not riot, and never will be.

do you wish to continue to subsidize low paid workers thru welfare?

Prove that forcing Employers to overpay wages for unskilled jobs will decrease "workfare". I'm only asking because there are actual studies done by independent sources that proclaim quite the opposite. It would actually, in effect, lead to higher unemployment and hyper-inflation.

please post the links, i'd like to see those. seriously.

and why is it that before, corporations could pay a living minimum wage, but now they can't? overpaid? below federal poverty level is correct pay? living at poverty level is overpaid?

Are we talking about the same thing? I thought this was a minimum wage discussion. This is a completely different discussion

no it's not a different discussion. minimum wage isn't above poverty level. businesses paid a living wage in the past, but minimum wage hasn't increased as the cost of living has done so. but profits have risen.


as for unskilled-define unskilled. as has been shown, many of these 'unskilled' workers are in these jobs because of layoffs in their previous field, many have a skill, a degree, or at least some college.

this is a more accurate analogy:

http://www.forbes.com/sites/quora/20...age-to-20hour/

as for corporations, they are like racetracks, they only consider their own slice of the pie without looking at the bigger picture. and since we taxpayers help these same corporations thru tax deals, subsidies and the like, the least they could do is pay their workers enough that we wouldn't have to subsidize both employer and employee.

You keep at this, like somehow these evil employers are forcing us to pay for their sins - please prove this. Show one instance, where a corporate federal tax break / subsidy is directly related to employing minimum wage workers.

my point is that businesses accept subsidies from the federal govt (us) but then say the federal govt has no place in their business and how it's run, which is rather disingenuous. i'm not saying businesses who take subsidies automatically pay low wages. the koch bros (tied for 4th richest in the u.s.), for instance, have gotten subsidies.
and yes, corporations who pay minimum wage are 'forcing us' to pay for their sins, because they pay a low wage which means their employees qualify for welfare, food stamps ,rent assistance, etc. i'm saying that employees shouldn't have to be subsidized by taxpayers. they are working, they should make enough for us not to have to suppor them.

it's a simple question-do we want corporations who make billions in profits to pay their workers enough to get off welfare, or do you want to continue to help these people get by via welfare?

This is again, not an accurate representation of how corporate employment works. Employers are not emboldened to insuring a thriving economy - they require people to run their operations and pay what is required to do so. If they require higher quality talent, they pay more to get it.

Minimum wage jobs were never the backbone of our economy - even today, as you continue to try and refute, the overwhelming majority of people working at or below the federal minimum wage are teenagers below the age of 25. This is from the DoL, Bureau of Labor Statistics, not some paid-for organized labor paper.

hold on now. now teenagers are teens til age 25?! well, if that helps make your argument, then you've got me! but according to the table i'm looking at, there's a slot for 16-19 year olds. those are teens. and it's less than a quarter of min. wage recipients.
http://www.bls.gov/cps/minwage2012.htm

'EPI advocates for low- to moderate-income families in the United States. EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.' sounds good to me, since i'm a member of a working family-the backbone of this country.



Sounds good to me too. As I said, it doesn't make them bad, just makes them biased.
__________________
“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum....” ~ Noam Chomsky, The Common Good

[GenuineRisk]

The problem I see is that currently corporations are sitting on record high piles of cash that they are not reinvesting. Why should they; they have no reason to, as taxes are low (as few corporations pay anything resembling the actual tax rate). Companies spend money to expand when it's a way to lower tax liability and/or when demand for their products is up. With middle- and lower-class wages at historically low levels, the majority of Americans don't have the disposable income to create demand. With tax rates so low, companies don't have any motivation to spend any of the huge amounts of money they are currently hoarding. Same with the ultra-wealthy; there is only so much money they can spend and then they start to hoard it. And that takes it out of the economy and hurts everyone.

Companies are not going to cut staff if minimum wages are raised. They may try to get the same amount of work out of fewer staff, but they're doing that now anyway, so where's the loss for the average worker? If there is demand for their products, they will hire staff to meet the demand, but to create demand, you need people with money to spend. There are desperately few types of jobs that MUST stay here, and a lot of those are service sector jobs, which are historically very low-paying jobs. But the more disposable income those workers have, the more they can spend, which is good for the entire economy. It's why food stamps are better for the economy than tax cuts. Food stamps get spent (at local, private businesses); tax cuts get hoarded and taken out of the economy.

Without demand, you have no growth. And demand is not created by the wealthy; it's created by the vast numbers of poor and middle class when they have money to spend:

http://www.slate.com/blogs/business_...eate_jobs.html

[Danzig]

Originally Posted by GenuineRisk

The problem I see is that currently corporations are sitting on record high piles of cash that they are not reinvesting. Why should they; they have no reason to, as taxes are low (as few corporations pay anything resembling the actual tax rate). Companies spend money to expand when it's a way to lower tax liability and/or when demand for their products is up. With middle- and lower-class wages at historically low levels, the majority of Americans don't have the disposable income to create demand. With tax rates so low, companies don't have any motivation to spend any of the huge amounts of money they are currently hoarding. Same with the ultra-wealthy; there is only so much money they can spend and then they start to hoard it. And that takes it out of the economy and hurts everyone.

Companies are not going to cut staff if minimum wages are raised. They may try to get the same amount of work out of fewer staff, but they're doing that now anyway, so where's the loss for the average worker? If there is demand for their products, they will hire staff to meet the demand, but to create demand, you need people with money to spend. There are desperately few types of jobs that MUST stay here, and a lot of those are service sector jobs, which are historically very low-paying jobs. But the more disposable income those workers have, the more they can spend, which is good for the entire economy. It's why food stamps are better for the economy than tax cuts. Food stamps get spent (at local, private businesses); tax cuts get hoarded and taken out of the economy.

Without demand, you have no growth. And demand is not created by the wealthy; it's created by the vast numbers of poor and middle class when they have money to spend:

http://www.slate.com/blogs/business_...eate_jobs.html

saw that slate article yesterday. for years now, we've been told to cut taxes on the top % of people, that it would help create jobs. where are the jobs?
i remember reading in the past that people are actually paying banks to hold their cash. there's no incentive for them to do anything with the money, so it just sits.

[dellinger63]

Originally Posted by GenuineRisk

Food stamps get spent (at local, private businesses).

And are paid for by taxes (you and me) of course after a few years of tacking on interest.

Taking whatever amount was given away in food stamps plus the interest away from businesses. Not just Arab owned local joints employing only family.

The 'broken window' economic theory was busted long ago. Oddly enough by a Frenchman.

Wish the President was aware of it pre Cash for Clunkers.

[Rudeboyelvis]

Originally Posted by Danzig

please post the links, i'd like to see those. seriously.

There are plenty of links - here's one to start you off, from Texas A&M econ dept:

http://tamutimes.tamu.edu/2013/02/28.../#.Up5GrCed4fQ

[Danzig]

Meer says Obama in his speech completely ignored the Earned Income Tax Credit (EITC) “which provides as much as a 45 percent subsidy for low-income earners,” he notes, ”not to mention the slew of other income-support and transfer programs at both the federal and state level. A single parent with two children earning $14,500 would receive $5,236 in the EITC alone, before any other transfer programs.

“People who support increasing the minimum wage are often well-intentioned, but it’s quite likely that the minimum wage does more harm than good for low-income people. There are other policies, like the EITC, that do a much better job of alleviating poverty."


so, we keep having taxpayers pick up the slack? that's what eitc and other 'transfer' programs do. it leaves the tab off the companies, and keeps it on the taxpayers. so, they don't get paid more for their work, but keep getting paid by taxpayers for having a low-paying job....yeah, that's great.

but i did like the part in the article that re-iterated that minimum wage increases don't cause people to lose their jobs, which is a commonly held myth. so, even if it didn't produce more jobs (and i have to wonder if they went far enough in their study to extrapolate more money in pockets to more money spent, hence more purchasing, more demand, thus needing more supply, which would mean more work) it would certainly get many currently at minimum wage into a higher bracket-and off eitc, off 'transfer' programs, and off the taxpayers backs.
then again...it's not as tho my taxes would go down, they'd probably just spend the money saved on another aircraft carrier.

[joeydb]

Originally Posted by Rudeboyelvis

I'm trembling at the thought that we are witnessing the reincarnation of Riot.

Please - take it back!

[Danzig]

Originally Posted by joeydb

Please - take it back!

i suggest that trotting out the 'riot' moniker is to be considered a variation of godwin's law.

[Rudeboyelvis]

Originally Posted by Danzig

i suggest that trotting out the 'riot' moniker is to be considered a variation of godwin's law.

Not exactly. Our respectfully departed would drone on and on in a ridiculous attempt to try and convince (or more accurately wear down) anyone who would listen, that her skewed view, backed up with the ever famous fact-less, biased charts, was the only correct opinion.

This thread is beginning to take that turn.

I pointed out that the "facts" you keep presenting are anything but, and this "study" that keeps getting referenced is biased. Just like when she tried, ad nauseam, to brow beat people into believing that her point of view was the only acceptable perspective to hold, based on skewed data which she attempted to use to make her point, as fact.

[Danzig]

Originally Posted by Rudeboyelvis

Not exactly. Our respectfully departed would drone on and on in a ridiculous attempt to try and convince (or more accurately wear down) anyone who would listen, that her skewed view, backed up with the ever famous fact-less, biased charts, was the only correct opinion.

This thread is beginning to take that turn.

I pointed out that the "facts" you keep presenting are anything but, and this "study" that keeps getting referenced is biased. Just like when she tried, ad nauseam, to brow beat people into believing that her point of view was the only acceptable perspective to hold, based on skewed data which she attempted to use to make her point, as fact.

i'm not here to discuss a former poster.
now it's 'facts' and a 'study' because you don't like what they have to say.

i have seen you write opinions about what the study talked about, but i don't know that you've posted any facts to refute any of their findings. is their math wrong? their conclusions incorrect?
you said you read it, but then you write things that are opposite to what they've found, which is why i go back and put up portions that are in direct contradiction to your claims.

but, instead of telling me who funds the epi, why don't you show me a study that says raising the minimum wage would kill jobs? a study that shows it's better for us to continue to subsidize the working poor? you talk about coercion against corporations who make profits in the billions, what about coercing me and others like me to have our tax dollars pick up the slack?
is there a study that shows that instituting the minimum wage back in the day killed jobs? or when it's raised, that it does so?

http://www.businessinsider.com/minim...workers-2013-2
this is an article about going direct to industries affected by the last min. wage increase, and how they handled the higher labor costs.

again, i am only trying to find a way to get the working poor (and we want people to work and support themselves, right?) off the dole. do you know of a better way?
also, all wages, not just the minimum wage, are below where they should be based on historic numbers. businesses are making better profits than ever, but their workers, who are more productive than ever, see no results from that.



at any rate, let's move on from that portion regarding the epi study. let's say raising the minimum wage is no solution.

what is?