A $15 national minimum wage doesn't look economically sound to me

[gobears10]

I believe in the validity of the minimum wage in the U.S. You have libertarians and conservatives arguing against the concept of a minimum wage, which I also think is bad economics in most cases.

It is correct that the minimum wage hinders the efficiency of market forces when labor markets are competitive. If you had a perfectly competitive market, then the minimum wage acts as a price floor: when set up above the competitive equilibrium wage, quantity supplied of labor exceeds quantity demanded, creating a glut.

But in cases where there is only one employer in an area, or only a few employers (monopsony and oligopsony respectively), then the minimum wage can actually improve efficiency by preventing employers from artificially reducing wages and employment. Here, the minimum wage sets the monopsony wage equal to the perfectly competitive wage. Here, the minimum wage can actually INCREASE both employment and wages.

In the real world, there's a correlation between higher wages and labor retention (either gov't mandated minimum wages, or by "efficiency wages" voluntarily granted to employees by employers). This results in higher productivity, which then increases labor demand, which keeps the unemployment rate stable. Moreover, minimum wage laws tend to make labor demand inelastic, further mitigating the effects on unemployment.

And a minimum wage could reduce unemployment in other ways: increasing DI, resulting in higher consumption and less cyclical unemployment. Moreover, the empirical evidence is mixed regarding wage push inflation. A lot of the time, businesses due save costs due to less turnover and higher productivity, so they don't need to pass higher prices onto consumers (lessening "wage-push" inflation). Moreover, most businesses affected by a higher minimum wage are in intense competition for consumers, so it's unlikely that they will pass on the higher MW to customers.
Of course, there are other microeconomic market failures that could justify setting a minimum wage, including various information failures such as asymmetric information. Therefore, the minimum wage is both a tool used to correct market failures and a tool to reduce poverty. Modest increases in the minimum wage do far, far more good than bad. Only when you set the minimum wage past a certain threshold does it begin to adversely affect prices and/or employment.

So overall I think a modest increase in the minimum wage is a good deal: it increases workers' wages, results in a more efficient and equitable equilibrium in noncompetitive markets (with more efficient levels of employment, production, and wages), reduces the gap between the wealthy and poor, and doesn't affect unemployment adversely. So I think that the benefits outweigh the costs. I also think that the minimum wage should definitely be coupled with an expanded EITC. The EITC, as Christina Romer asserted, is very well targeted, helps the working poor, and is pro-business as it increases labor supply and employment. While increased labor supply normally reduce wages, the minimum wage acts as a good constraining measure for the EITC.

There are only two cases in which I think a minimum wage law could be safely removed. The first of which is if you had a very strong safety net coupled with strong labor unions. For example, Sweden doesn't have a mandated minimum wage but it's workers are fine because labor unions have a lot of leverage in wage negotiations. Moreover, you could also safely remove a minimum wage if you had a form of guaranteed minimum income (such as Milton Friedman's negative income tax). However, the U.S. is no where near close to having basic income, and compared to other advanced nations, our social safety nets are thinner and our unions have less bargaining power (due to right to work laws, union busting, and institutional factors such as a focus on "quarterly capitalism" over the"stakeholder" capitalism you see in Germany, Sweden, etc.)

So for the American context, a minimum wage law makes perfect sense.

But to me, a national $15 minimum wage doesn't make much economic sense. This isn't an area in which a one-size-fits-all policy is prudent.

There are huge differences in local costs of living, so a $15 minimum wage has varying purchasing power depending on where you live. I think it would be better to focus on local "living wage" campaigns pushing for a number specific to local job markets.

In some areas, a minimum wage above $15 may be appropriate (the New York metro area), whereas in other places, a $10.10 wage may grant you the same purchasing power (such as in rural Appalachia). Moreover, some economists are asserting that Puerto Rico's $7.25 minimum wage may be too high for the island due to its lower labor productivity compared to the mainland, and this could translate into various microeconomic and macroeconomic problems, some of which we're already seeing there.

Here's a good excerpt from an article I read:

For example, the New York metro area has an RPP of 122.3, meaning that $15 is actually worth only $12.26, being that New York metro prices are 22.3% higher than the national average.

As Bloomberg's Noah Smith points out, a federal minimum wage of $15 could be unfair to workers in urban areas or threatening to workers in rural areas.

"If minimum wages don't hurt employment, then a federal minimum wage is unfair to workers in big cities because their raises will be less than those of small-town workers," Smith writes. "But if minimum wages do hurt employment, then small-town workers are going to be put out of a job — and that's much worse."

So, some argue that due to increases in worker productivity, inflation, and cost of living over the years, phasing in a national $15 over five years as a baseline will be safe, and then various localities can increase it on top of that if they feel $15 in 2020 isn't enough to keep up with worker productivity or the cost of living in their areas.

On paper, that idea sounds compelling, and it's the best argument in favor of a $15 minimum wage I've seen (I was thoroughly unimpressed with Robert Reich's answer about how because we have uniform Social Security payments, we should have a uniform $15 minimum wage).

Still, in my view, the baseline argument makes a lot of assumptions, and depends on economic factors that we can't predict or necessarily rely on. I still favor a local-based approach makes more sense. I support the move to phase in $15 minimum wages in Seattle, Los Angeles, San Francisco, and for fast food workers in New York. But I think it's important to see how these play out before arguing that even rural areas and counties in Alabama and Mississippi should mandate $15 wage floors.

Here's an issue on which I actually disagree with Bernie Sanders, and Robert Reich for that matter. This is an area on which Hillary Clinton actually has a more sound economic policy than Bernie Sanders. Still, I support Sanders over Clinton because I feel single-payer healthcare is far more efficient than the current U.S. system. And I do believe we should raise the top marginal tax rate to over 50%. Neither of which Clinton has called for. And I support reinstating Glass-Steagall, making tuition free at public universities, oppose the TPP, oppose fracking, and agree with Bernie's stances on civil liberties, foreign policy, and social issues over Hillary.

[Live and Learn]

1. Shouldn't the federal tax rate take the same in to account then?

BTW, a federal minimum wage doesn't stop states from creating a higher minimum state wage. Most blue states already do that.

[gobears10]

2. President Obama supports a $12 national minimum wage...

In my view, that makes sense. Then you have can hundreds of minimum wages set by local governments, states, etc., based on local worker productivity and cost of living. $15 is appropriate in some areas, and in certain localities, we should go above $15. But it's too high for the entire nation.

I'm not against the concept of a federal minimum wage. I think it should be raised, but not too high.

[gobears10]

4. also, federal tax rate is different from minimum wage

Your taxes are potentially reduced in a number of areas, if you live somewhere expensive. If you pay more mortgage interest, or pay higher property taxes, your taxable income can be reduced accordingly (and those deductions are more valuable in absolute dollar terms if you earn more). If it were based on geography alone, somebody who spent $50k on a house 50 years ago outside Boston would pay lower taxes than somebody who spent $150k on their house outside Minneapolis this year. The current system better reflects actual differences in living cost than geography, though it also raises the question of why those who choose to live more expensively and have higher incomes should be subsidized more in absolute dollar terms (for two people with the same mortgage, the deduction will be more valuable to the higher income person, and for two people with the same income and down-payment, the one buying a nicer house will get the more valuable deduction).

[Live and Learn]

7. But the deduction differences really only apply to home interest.

And those with higher housing prices still pay more. How about higher energy costs?

I think the difficulty associated with taking all costs in to effect would make it a bit difficult to come up with a really fair federal tax system. Of course, we all know the basic inequities aren't between those of the same income in different states but between the different classes overall.

As far as the minimum wage issue is concerned, I know it is currently inadequate and hasn't kept up with inflation. The economics of exactly how much it needs to be raised, I will leave up to the 'experts' for now because I really don't want to do all the research involved to check it. (Kudos to you for having done so and I do believe you have been researching the issue.)

If it were up to me we all be paid a more equitable wage based on work that society actually needs done. In other words, I don't understand why a CEO is worth so much and a janitor so little. Nearly everyone I know would take the CEO job over the janitorial job so it can't be supply and demand. And skills, come on, I give you Donald Trump, to explain. And why are some professional sports player payed at over 100 times (based both in today's dollars) the rate they were in the 1950s? I could go on but you get my drift. These inequities in society just can't continue.

[1939]

9. Three reasons

"And why are some professional sports player payed at over 100 times (based both in today's dollars) the rate they were in the 1950s?"


1. Free agency

2. Very strong unions in professional sports.

3. Uniqueness of talent.

[fishwax]

35. you left out a big one: broadcast rights

Which have dramatically increased revenue for sports teams and leagues.

[1939]

44. Without the three reasons I noted

Broadcast rights income would all go to the owners.

[fishwax]

71. well, yeah, but without broadcast rights there wouldn't be nearly as much income to go around

That was my only point. I wasn't really disputing the three points that you raised. (The labor union in football isn't less strong than in other sports, since the careers are so short relatively, but even so the organization of those labor forces has certainly been key to the growth of player compensation.)

[jeff47]

47. Because poor people own houses in NYC instead of renting.

You don't get to deduct mortgage interest or property taxes when you don't own your house.

[Juicy_Bellows]

3. Interesting post but would you care to elaborate

Why you take contention with Reich's point of view on it? I thought he made a lot of sense on the issue.

[gobears10]

5. this is what RR said...

The argument that different sections of the country should have different minimums is hokum. Different sections of the country don't have different minimum safety standards or minimum Medicare or minimum Social Security or minimum worker's compensation standards based on their different costs of living, so why should they have different minimum wages?

Source: https://www.facebook.com/RBReich/posts/1039219189424010

I didn't find it particularly convincing, given that the minimum wage is a very different issue from Social Security payments. Setting up too high of a minimum wage could have damaging effects on unemployment and/or inflation, while modest increases are generally fine. Social Security payments don't have the same capacity to affect price levels or unemployment, so they don't need to be adjusted to cost of living. Also, another user brought up why federal income taxes are universal rather than geographic specific, and I answered that as well in another comment.

Here's a case study on Puerto Rico, and the dangers of setting a minimum wage too high: http://www.washingtonpost.com/news/wonkblog/wp/2015/06/29/wonkbook-puerto-rico-shows-the-danger-of-a-high-minimum-wage/

[Juicy_Bellows]

6. Thanks for the reply.

I do think that SS payments play a role in unemployment though. More money spent in an economy helps unemployment. I appreciate your post and replies but I do think money in helps money out, if that makes sense.

I suppose I come from the standpoint that 15 bucks an hour, even in rural Kentucky makes sense. Bigger cities should pay more but a federal floor of 15 seems appropriate.

Cheers!

[gobears10]

11. Right...

Social Security payouts count as "transfer payments" by the government. The amount you get affects your consumption, which translates into aggregate demand, and that could lower unemployment during demand-deficient recessions or worsen inflation during demand-pull inflation. Same with disability insurance and so forth: they are direct cash programs given to select people, who then use that cash to consume goods.

The minimum wage is completely different. Yes, the wage you get at the end of day is used to consume goods, and can affect employment in a similar manner to the SS payments. But the minimum wage is also very different from SS payments in that "wage" is the price of labor in the labor market set by the intersection of labor supply and labor demand. Wages are what businesses pay to workers in exchange for their services in producing various goods that the businesses ultimately sell.

Too high a minimum wage can make the cost of production too high, resulting in unemployment or inflation. Due to the downward sloping demand curve, and upward sloping supply curve, if you set a price floor above the competitive equilibrium, then the quantity supplied of labor exceeds the quantity demanded of labor. At that given price, there is a glut in the market, an excess amount of people seeking work, creating unemployment. At that price, more people want to work, but that wage level is too high for businesses to bear. At the equilibrium rate, however, quantity demanded = quantity supplied.

Also when the wage is set above its competitive equilibrium, the higher wage may attract more efficient workers into the labor force. The quantity supplied of labor increases as voluntary unemployment decreases, and these "efficient" workers could displace poorer workers who are less skilled. So even in cases where overall unemployment may not increase that much, some workers may be displaced by new entrants into the labor market.

[Live and Learn]

8. I hardly think Puerto Ricos economic downturn can be blamed on their minimum wage.

That argument seems as specious as the Republican argument of blaming our downturn on illegal immigrants.

[jeff47]

51. Because social security payments just sit in people's wallets?

Social Security payments don't have the same capacity to affect price levels or unemployment, so they don't need to be adjusted to cost of living.

What do people do with Social Security payments? Buy goods and services.

That uniform Social Security payment buys a lot more goods and services in Cheapville than in NYC.

[LuvNewcastle]

10. $15 an hour is just about the bare minimum

it takes to live a decent life if you're totally on your own.

A friend of mine (David) makes about $10.50 an hour and lives here in the Deep South. Even though the COL is cheaper here than in a lot of places, he has to live with his grandmother. I think his pay after taxes comes to about 1300 or 1400 a month. Average rent around here is about 800 or 900, so David doesn't make nearly enough to live alone, pay a car payment, pay insurance, and eat -- plus pay for whatever unexpected event that comes up.

So, if David, who is in his 30's and has a child, is ever going to move out of grandma's house, he needs a substantial raise. An extra $5 an hour would give him about what he needs to get by and live an independent life. $15 an hour should be the bare minimum, because that's what it takes to live even in the cheapest places. Thanks to these shitty states we live in, the only time we ever get a raise down here is when the federal govt. raises the minimum wage.

[Scuba]

12. I agree with your premise that a "modest increase in the minimum wage" is the way to go.

That's why I advocate for a $15 / hour national minimum wage with states (and others) implementing a higher minimum if they see fit.

I guess where we disagree is the definition of "moderate." I consider $15 to be on the low side of moderate while you apparently see it at higher than moderate. Please consider this:

Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity

"If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour," she said, speaking to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the economic impacts of minimum wage. "So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker."

See, there's more than enough gain on the work to pay the $15/hour, even more. And putting more money in the hands of those who will surely spend it is good for the economy.

[gobears10]

13. there's a huge problem with this...

Implicit in your statement is the belief that a $15 is quite moderate: that in reality, the minimum wage should be $22 since that reflects what it would have been if the MW kept up with productivity.

However, that line of thinking is faulty. The problem with that reasoning is that since the late 1970s, wages in general have been decoupled from worker productivity. Saying that the "real" minimum wage should be $22 ignores how artificially high that wage would be given that wages in general no longer reflect productivity growth (due to globalization, automation, technological innovation, regressive taxation, union busting, etc.). A $22 minimum wage would most certainly cause unemployment and inflation in our current economy. Maybe large corporations could shoulder it fine, but definitely not small and medium-sized enterprises.

$15 an hour works in some places, and in some places let's go higher. But not in places with low costs of living, where it could actually seriously result in wage-push inflation and unemployment. Or it could displace existing workers as more skilled workers come out of voluntary unemployment.

[Scuba]

16. Are there companies that can only afford to exist at slave wages? Sure, but they should go out ...

... of business then.

I disagree with your premise that smaller businesses would be at a disadvantage in the job market at a higher, "living", wage.

[Glassunion]

73. +1gazillion or so

If your company relies on employees paid less than what it takes to live with the basics of food, shelter, and safety. Then your business is a failure, reliant on on welfare to continue. Because if your full time employees, are making poverty wages, then your company is an abject failure and you should not be in business.

[smirkymonkey]

27. +1000

I work for a very large corporation and the upper management always seems to be baffled as to why shoppers aren't buying more good more often. DUH! We have less real money in the hands of shoppers and they are using it to pay for necessities/emergencies so that is why they are not buying more and more of your products every year. I just don't get why republicans don't understand how money in the hands of consumers is what make the economy go roundl

[CanadaexPat]

39. Fordism worked very well for a long time.

[1939]

28. That implies that productivity increases are uniform

Have the industries/services that employ minimum wage workers experienced the same level of productivity growth?

[Scuba]

32. Relavent only if you think its OK for some workers to be paid less than a "living wage" despite ...

... working 40 hours a week.

Besides, compensating the lowest-level workers at $15 will drive up wages for most other workers, especially those with records of high productivity.

[Lee-Lee]

43. Of course not

A factory worker can be much more productive in an hour thanks to technology.

A server in a restaurant can't wait on any more tables today than they could in 1980 or 1940.

[1939]

45. Yes, and retail as well

That little dress boutique is not getting any more productivity out of their employees.

The problem is that a lot of jobs where teenagers worked part time for "pin money" are now employing adults with families as a result of good jobs drying up due to productivity.

[jeff47]

50. They still benefit from productivity gains.

That dress boutique is paying less in real dollars for dresses to put on the rack.

[Igel]

68. But let's not do double accounting.

The productivity gains that produce cheaper dresses should result in increased rewards for those who made the dressers cheaper.

If productivity rewards were allocated "properly," the dresses wouldn't be cheaper.

Meaning you want to reward the retail clerks on the backs of the workers who produce cheaper dresses. Assuming that they're cheaper though productivity increases.

Alternatively, you want to reward retail clerks on the backs of 3rd world workers.

The productivity argument always fails to account for allocating productivity gains or confusing cheaper prices with necessarily resulting from productivity gains. This argument takes the context as independent from all other facts when were the argument applied consistently the context would be radically different--and the conclusion you'd get from the argument would often fail to be valid.

[My Good Babushka]

14. I disagree

I think it's a good floor wage for any area of the country, and I think it is pretty low at that.
There are things like fuel, education and medical care that are essential to keep within reach of every working person, and they are not very pliable, I mean, they are not lower in areas where you say there is a lower cost of living. There are no areas with lower costs of living where things like gas and medical care are concerned.

[hobbit709]

15. $15/hr in Austin would be barely minimum living wage.

Even a dump 1 br apartment will be $900/mo plus utilities.

[Erich Bloodaxe BSN]

17. We've seen the costs of living argument against national minimum wages many times before.

The counterargument is that 'money isn't everything'. The *reason* cost of living varies is that the associated benefits of living vary. When you live somewhere lots of people want to live, costs go up. You pay more for living in that place in competition with everyone else. You want cheap cost of living, move somewhere where the cost of living is low. Give up the nice weather, or the good job market, or whatever else it is that causes cost of living to be higher where you live. Don't expect the Feds to cook up some complicated scheme to make a mobile cost of living minimum wage to give more money to people who live in areas where people are already getting other, non-monetary geographic benefits.

You don't want to pay more to live in the New York metro area? Move out here to Ohio, where you'll get more for your money.

[gobears10]

18. This ignores the problem...

The problem is that $15 has a different purchasing power, or real value, depending on where you are in the country. In some parts of the country what is $15 on paper may actually have the buying power of $19 in places with low costs of living. Therefore, in those places, a $15 could genuinely be burdensome, with the wage being set above the competitive equilibrium at too high a rate, causing unemployment and/or inflation for workers.

[Erich Bloodaxe BSN]

25. I'm in one of the cheaper parts of the country.

$15 is a decent wage here, and as we saw with the fast food examples, costs of goods sold will only go up minimally to cover the costs of giving employees raises in the vast majority of types of business.

Who gets hit by increased cost of service or goods? Highly labour-intensive businesses. Masseuses are the example I use. But the thing is, those services/businesses already typically charge well above $15/hr. They run 65-75/hr out where I am in cheap cost of living territory. So their purchasing power will go down some, while their wages won't go up.

There will certainly be some job losses - there always are when things change. But a lot of folks will have more spending power, creating new jobs elsewhere. So there will be disruption, and it will suck for some folks, but with more money allowed to flow in the economy, more jobs will be created than lost.

[jeff47]

56. Workers are not anchored to the ground.

If the problem you describe happens, workers will leave the expensive place and move to the cheap place, reducing demand in the expensive place and re-establishing the equilibrium.

[hobbit709]

79. And if you don't have the money to move?

If you can't afford cab fare across town, you certainly can't afford to go anywhere else. Much less pay that 1st month, last month and deposit to get a new place to live.

[jeff47]

82. Better paid workers do. So they move, and worse-paid workers

would be able to "move up". Either way, labor leaves.

[hobbit709]

83. you're funny.

[jeff47]

84. Boy, what a thorough analysis.

If it's "too expensive" to live somewhere, a portion of labor that has the means moves away. That leaves a "hole" that needs to be filled by someone.

Or has the mass migration to the south over the last 30 years not happened in your world?

[hobbit709]

85. And you really believe the wages go up?

The employers take advantage of broke people to keep wages depressed.

[jeff47]

86. No. If you bother reading what I wrote, I never said wages would go up.

I said the equilibrium would be restored. That does not require wages to go up.

In the abstract, the value of living in a particular place is based on how much money you get paid, the costs of living in that place, and the "value" of living there (ie. there are some non-monetary perks from living in CA, like the weather).

If people aren't getting paid enough, they leave. The costs are too high for those non-monetary benefits.

Fixing that equilibrium does not mean everyone has to get paid more. Non-monetary perks can be added, or costs can go down (or more realistically, rise more slowly).

Build a new freeway in LA, and suddenly the areas on the other side of the mountains become easier to commute from. So people move there for lower costs. Then the freeway gets too crowded, making the commute too painful again. Which causes people to move back to the LA-side of the mountains. The equilibrium will overshoot a few times, and then settle into something stable. (Then the 2008 recession nuked home prices, breaking the equilibrium again.)

The same thing happens on a national scale, but keeping the example to areas of LA makes it simpler to describe. There's fewer complicating factors (how bad do I rate snow in winter versus oppressive heat and humidity in summer? How do you value earthquakes versus hurricanes?)

[Marrah_G]

19. How much do you live on?

15.00 or less? Just curious.

[Positrons]

21. Does it matter?

If so... Why?

[Marrah_G]

23. Yes it does

Because your standard of living colors your view on things. Even in the poorest of counties, 15 dollars an hour is just getting by. In wealthier places, it would take 2 of those jobs just to get by.

it sucks to have to choose between electricity and food. it also sucks to run out of food before the end of the month, living on rice and beans. But to people who don't have to struggle so much, they will never understand what it does to a person, to a parent to constantly be treading water just to not be homeless.

Working constantly, never a vacation, no money for entertainment. Work, worry, stress....it's a shitty way to live. It's really just existing.

[gobears10]

26. i don't see how it's relevant...

but I'll just say i'm not particularly well off.

It's not enough to base your argument on purely moral and emotional guidelines with little or no basis in actual economics. Of course, most political debates on economic topics are normative, and normative economic debates are very important, especially when pertaining to public policy. But without knowing the positive economics, dealing with normative economics is futile. Economics is also a very logic/statistics-based.

It's fine to be emotional, or make appeals to emotion, and talk about morality. But you also need to argue your point with hard data, with logic and critical thinking, and with evidence in order to truly make your points sound and convincing.

[Marrah_G]

29. LOL, okay

I'll leave you to your superior debates, void of morals and emotions.

[Logical]

80. You have done neither. nt

[Scuba]

33. Are you suggesting that wealthier - or poorer - people can't support positions outside their own?

While I've disagreed more than a bit with this OP, I understand that his personal income level is not germane to the discussion.

[Marrah_G]

40. I am suggesting that it is much more difficult

A poor person realizes that 15 dollars an hour is barely getting by. A solidly middle class person might have a much harder time realizing that. I know a lot of middle class people who think minimum wage is just for high school kids. They don't realize how many people work 2 or 3 minimum wage jobs with little or no benefits just to survive.

[Donald Ian Rankin]

81. Except you've completely misunderstood the arguments placing an upper bound on the minimum wage.

The reason (or at least, the only sensible reason) not to set the minimum wage as high as possible is *not* the tradeoff between gains to minimum wage employees from higher wages and losses to employers from higher wages, it's the tradeoff between gains to minimum wage employees from higher wages and losses to the unemployed from there being fewer minimum wage jobs.

The minimum wage levels set in the USA do not appear, touchwood, to have had a significant effect on unemployment. It is absolutely not safe to extrapolate from that to the assumption that a much higher minimum wage level would not do so.

And applying ad hominem arguments to people who point that out is no more reasonable than any other ad hominem argument is.

Yes, $15 an hour is not that much. But it's a lot more than nothing.

[7962]

20. And the "kiosks" have already started to appear:

http://www.businessinsider.com/mcdonalds-new-restaurant-of-the-future-2015-8

Of course they SAY its not meant to replace anyone.....

[Positrons]

22. Love those kiosks and ordering through my phone...

Speedy...

[Marrah_G]

24. So tell me... do you get cell service under that bridge?

[Positrons]

31. Aren't you just a little ray of sunshine....?

[BeanMusical]

65. Lol!

[Igel]

69. Effect, meet cause.

I can't stand those little wifi "kiosks."

On the other hand, they reduce wait staff and that reduces costs. That reduces prices and keeps those places able to serve a slightly lower segment of the SES pie than they otherwise would or upgrade something else to attract a different and expanded clientele. They may lose a couple of customers, but figure they gain more than they lose.

They have other perks, too: You get to reorder drinks when you want them instead of when the waiter happens along to check on you--which may not be often if your waiter is on break and his replacement for 15 minutes has no interest in you. That makes you happier, unless you need the personal service.

There are games you can play.

And they get data from the short survey you're henpecked into taking, data right then and there and not done a day or two later (if ever).

Just wait until the burger-flipping bots are in place. We might be able to revert to automats. (Remember those?) Go in, place your order and pay for it at a kiosk, have a couple of bots make your food. A counter clerk verifies that you get the right food and handles complaints, one person in back of house keeps the bots happy and does oddball orders. A busboy cleans front of house. And that's the staff during lunch rush!

[Rex]

87. LOL! A $10 burger from McDonalds!

There really is a sucker born every minute!

[Positrons]

89. ?

Did you respond to the right post?

[MADem]

30. Puerto Rico is an island economy--things are more expensive there, not less.

Electricity is outta sight. Everything that isn't home grown has to come in by ship. Unless you're living on coffee and mangos, you're going to pay more for most things, even if you are shopping at Costco. You'll pay way more for a car there than you would on the mainland, too.

The problem with PR is that there are fewer jobs than there are people, and that is getting worse, so there's an exodus going on of late.

[jeff47]

48. Not just of late. They've had a net outflow for 20 years. (nt)

[MADem]

76. It's gotten worse down the years. nt

[stevenleser]

34. Nope, gotta go with the Nobel laureate in economics on this one

http://mobile.nytimes.com/2015/03/02/opinion/paul-krugman-walmarts-visible-hand.html?referrer=

Some background: Conservatives — with the backing, I have to admit, of many economists — normally argue that the market for labor is like the market for anything else. The law of supply and demand, they say, determines the level of wages, and the invisible hand of the market will punish anyone who tries to defy this law.

Specifically, this view implies that any attempt to push up wages will either fail or have bad consequences. Setting a minimum wage, it’s claimed, will reduce employment and create a labor surplus, the same way attempts to put floors under the prices of agricultural commodities used to lead to butter mountains, wine lakes and so on. Pressuring employers to pay more, or encouraging workers to organize into unions, will have the same effect.

But labor economists have long questioned this view. Soylent Green — I mean, the labor force — is people. And because workers are people, wages are not, in fact, like the price of butter, and how much workers are paid depends as much on social forces and political power as it does on simple supply and demand.

What’s the evidence? First, there is what actually happens when minimum wages are increased. Many states set minimum wages above the federal level, and we can look at what happens when a state raises its minimum while neighboring states do not. Does the wage-hiking state lose a large number of jobs? No — the overwhelming conclusion from studying these natural experiments is that moderate increases in the minimum wage have little or no negative effect on employment.

[WinkyDink]

36. For this topic, IMO, a Democrat needs to discuss capping MAXIMUM wages.

.

[PowerToThePeople]

63. This is my view as well.

[stevenleser]

66. No, the highest income folks don't get their income through wages.

So what you are trying to accomplish won't work.

[PowerToThePeople]

67. You can cap those other methods too.

It would be better stated as an "income cap."

[stevenleser]

74. How exactly? If a billionaire invests via mutual funds, how do you cap the earnings?

Who gets the extra money?

If the billionaire invests in stocks on foreign exchanges, how do you cap their earnings?

If a billionaire starts companies overseas, how do you say they aren't allowed to have the profit of those companies as income?

[PowerToThePeople]

78. Uh, taxing it.

[stevenleser]

88. Explain that tax rule then. nt

[Bradical79]

37. I'm confused about your support for a local based approach

Isn't that what we currently have?

[hobbit709]

38. Try getting by on $9/hr and then tell me about economically sound.

wonder what percentage of 1%ers in favor of raising minimum wage is compared to the 99%ers in favor.

[A Little Weird]

41. We need national minimum wage laws

If it was left up to local areas, then no red state would ever raise the minimum and many would probably do away with a minimum altogether. I'm not sure why you think $15/hr would be too high for rural Appalachia.

[olddots]

42. guestion

Have you ever ...ever. ever personally worked a minimum wage gig doing two shifts a day to support yourself ????????

[PowerToThePeople]

46. Imo, all it will do is put many more people on the lowest rung of the income ladder.

It would be better to have an extremely progressive taxation model that essentially creates an income cap. Businesses can either choose to disperse funds more evenly throughout their organization or the government will take those funds and do it for them.

[jeff47]

49. Why would the company disperse the money?

"I only keep 10% of my massive bonus. Well, I guess I need a bigger bonus"

[PowerToThePeople]

52. They may choose not to

Then it can be dispersed by the government.

[jeff47]

53. Because we don't have the last 40 years to measure how well that works. (nt)

[PowerToThePeople]

54. Not saying that changes do not need to be made.

Just saying creating a much larger lowest tier of income may not give us the results we anticipate.

[jeff47]

55. Good thing we have real-world experiments to see what would happen.

So....did Eastern WA implode when they raised minimum wage and ID didn't?

Nope.

So...Did MN do worse than WI when MN raised minimum wage and WI didn't?

Nope.

We have lots and lots and lots of natural experiments to see what would happen with a higher minimum wage. We don't need to sit in our ivory tower and guess.

[PowerToThePeople]

59. I would not hold E Wa as a successful area for workers

It is in extreme economic decay with all the telltale signs of a failing region. I do not think the minimum wage increase drove it to this point, but It has not improved the poverty of this area in my view.

[jeff47]

60. ID isn't doing better. That's the point.

The two places have a similar geography and economy. So we get a pretty good look at what minimum wage increases do without complicating factors.

[PowerToThePeople]

62. The reason that E Wa is better than N Idaho imo

Is because higher taxation that supports stronger school systems, infrastructure, and other commons. Idaho is better for small business creation, I can pay 10 bucks to register a business with the County and get going. Washington has many more fees and red tape that lead to the exclusion the lowest income levels from going into business for themselves. You see many more under the table operations that are unregistered in E Wa. In Idaho you do not see that. But, that is a little off topic here.

[jtuck004]

57. That's a very Republican idea, to leave people in poverty so the wealthy can do better.You make

a very passionate argument - and I think Ms. Clinton or Donald Trump would agree wholeheartedly with you.

You remind me of Timothy "Killer" Geithner, and he was Treasury Secretary. Good company there, eh?

[4dsc]

58. Are you still living in the 80's or what

Nothing less than $15 an hour by 2020 will do for the Americans this will effect the most. The current minimum wage is good if our prices were held to those we witnessed in the 70's and 80's but not today.

[unblock]

61. your post actually has nothing to do with the minimum wage per se

it has more to do with whether or not we want a single currency and uniformity across the nation. there are numerous things in the federal law for which you could make similar arguments, from social security benefits to tax rates.

it would arguably be more economically efficient (in theory, at least) to have many currencies within the u.s. each state could have its own currency, as in fact they once did. economist sometimes note that we actually do have multiple currencies, one per federal reserve bank, each putting its own identifier on their own currency -- it's just that we all agree to peg the exchange rate at $1=$1.

we could, however, let each state or region or district float on its own currency, and in theory this would work wonder economically. the richer areas would no longer have to artificially subsidize the poorer areas; instead, the poorer area's currency would automatically devalue in the market, achieving the same effect exactly when and to the extent the market deemed it appropriate. this makes exports from the poorer area more attractive, supporting their economy, etc.

however, there is obviously a hassle involved in maintaining multiple currency, and it a barrier to movement and commerce -- people and businesses are more likely to stay within their own currency region to avoid having to convert currencies all the time as there is expense and hassle involved.

we decided many years ago to have a single country with a single currency and mostly uniform laws at the federal level. this helps keep the united states united, helps us feel like we're all in the same economy, all in the same boat, and it's easy to move across the country and do business across the country.


separately, even if your assertion were correct about a $15 level being too high in some places right now, this is taking the short view. it's not like the minimum wage level gets adjusted every few weeks. it's been years six since the last adjustment went into effect. six years from the time a $15 level goes into effect, it's likely to be too low in most places.

finally, hell, even if you're completely right, the main consequence is that poor workers get a win at the expense of industry. isn't it about time they got a win?

[tenderfoot]

64. Your concern for the top 1% has been duly noted.

[Sunlei]

70. Its called Federal Minimum Wage? States have to match it, except 2 or 3? states today do not

have to match the current federal minimum wage, not sure how those couple states(or remember what states they are) got away with that.

I also know most foreign visa workers have to be paid the Federal minimum wage. This could be why some don't want to raise the minimum for all Americans.

Also, Americas prison workers are not covered by the Federal or State minimum wage protections.
That's why plenty of prison workers are paid, some 20 cents an hour, a dollar a day. very low 'pay' for fulltime work. If prisoners had to be paid the minimum wage, I bet less Corps would use prison labor and hire more outside workers.

[DemocratSinceBirth]

72. The federal minimum wage definitely needs to be raised.

After that I favor as high a minimum wage as possible that doesn't result in a loss of jobs.

[Starry Messenger]

75. Well, in some places you need way more than $15 to afford an apartment.

In San Mateo County, you need to be making $24 a hour.

[panader0]

77. I agree, it doesn't look economically sound to me either.

Adjusted for inflation it would be over $21 bucks. $15 an hour is just an attempt at a stopgap, a tossed bone.
The money is there, it's just all at the top.