Income Inequality?

[Sparko]

The problem is that there is an area in which goods can be priced that is technically affordable but brings living expenses up to an unreasonable degree.

an example would be nice.

I'd ask you to see my response to Cow Poke in reply #25, as he made basically the same comment.

OK

[Cow Poke]

The problem is that there is an area in which goods can be priced that is technically affordable but brings living expenses up to an unreasonable degree.

Who decides this? What should THIS cost?

soup.jpg

[Sparko]

So, what gives you the right, for example, to take a dollar from me and give it to Sparko?

I think I am starting to like this idea.... I can sit on my tuckus and get PM to take money from other people and give it to me? Awesome. I am a democrat now! Down with republicans!!!! I want my free money and stuff.

[Cow Poke]

I think I am starting to like this idea.... I can sit on my tuckus and get PM to take money from other people and give it to me? Awesome. I am a democrat now! Down with republicans!!!! I want my free money and stuff.

[Sparko]

You admitted to being a redistributionalist. That's somebody who takes money from one person and gives it to somebody else. Who gives you that authority?



Why? Do we owe Mary a job more than we owe Homer a job? Who are you to decide which one of them gets to work?

also, once Bob's business starts to make a profit and he wants to expand, he will need to hire more people. And he can't find any more Homers so he has to hire Mary at $7.00 an hour. Then Fred seeing what Bob is doing, opens up a competing business and needs workers, so he hires people at $7.25/hour. Homer, having gained experience at Bob's decides to work for Fred and train his workers, so Fred pays Homer $8/hour to be Foreman. and so on. Free market.

[Cow Poke]

also, once Bob's business starts to make a profit and he wants to expand, he will need to hire more people. And he can't find any more Homers so he has to hire Mary at $7.00 an hour. Then Fred seeing what Bob is doing, opens up a competing business and needs workers, so he hires people at $7.25/hour. Homer, having gained experience at Bob's decides to work for Fred and train his workers, so Fred pays Homer $8/hour to be Foreman. and so on. Free market.

OR, Homer goes to Bob and says, "hey, Fred says he'll pay me $7.25 an hour, but I really like working here, so....." and Bob says,

A) I really wish I could pay more, but things are too tight....
or
2) You know what -- business has really been good, and your value has increased as you learned the business, and I think you're worth more -- it would cost me more to have to hunt for somebody, and train them, and i'd rather keep you..... how bout I go to $7 an hour, and increase to $7.50 in 6 months as things get even better?

You know ... the MARKET decides!

[Sam]

Well first, raising the minimum wage only adds to inflation. If the butcher, baker, candle stick maker have to pay their workers more the majority of that will be passed on to me the customer there by deceasing my buying power and hurting my ability to provide for my family.

This is not substantiated. Here's a chart showing minimum wage increases (nominal and adjusted) by year:

chart-minwage-1938-to-2012.jpg

and here's a chart of US inflation rates by year:

US-Inflation-by-year.png

Increases in the minimum wage have not caused long-term growth of inflation. What it would do is reduce poverty and increase consumer spending (leading to short-term GDP growth). A minimum wage increase to $10.10 would bring about 4,600,000 people out of poverty, according to various economic studies. The likely cost of this growth would be about 500,000 jobs lost in the short-term, if I'm remembering correctly.

Arguing that increasing the minimum wage will increase inflation only makes sense if the supply doesn't rise to match increased consumer spending. Since we remain in a demand-side slump where the problem is too little demand rather than too much, increasing the minimum wage and thus increasing consumer spending is likely to have predominately beneficial effects to the economy, allowing us to faster reach potential GDP, and is likely to have little to no effect on the inflation rate.

And for what it's worth, economists responding to Chicago Booth's IGM poll overwhelmingly agree that the costs of a minimum wage increase to $9/hour and indexing the minimum wage to inflation are sufficiently low that the economic benefits of doing so make for good policy.

[Sam]

It's also worth noting, from the chart above, that when my father would have been making minimum wage at age 17-19, he would have been making a little less or a little more than $10/hour in inflation-adjusted dollars (adjusted to 2012 in the chart). When Scott Walker dismissed a minimum wage increase by arguing that he worked a minimum wage job to save for college in the mid-to-late 80s, the value of his wage was sliding just under $8/hour (1982) to $6/hour (1990) . . . but college tuition also cost significantly less than what it costs today, having outpaced the consumer price index by almost 5:1.

It reminds me of a Lewis line in "The Abolition of Man:"

And all the time—such is the tragi-comedy of our situation—we continue to clamour for those very qualities we are rendering impossible. You can hardly open a periodical without coming across the statement that our civilization needs more ‘drive’, or dynamism, or self-sacrifice, or ‘creativity’. In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst. We castrate and bid the geldings be fruitful.

[Bill the Cat]

Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.

http://www.cbo.gov/publication/44995

So, while the CBO model favors raising a portion of the low-wage workers' standard of living, what about those who will NOT benefit from it? They get driven even deeper into poverty, and the gap between the haves and have-nots remains just as wide.

[Spartacus]

Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.

http://www.cbo.gov/publication/44995

So, while the CBO model favors raising a portion of the low-wage workers' standard of living, what about those who will NOT benefit from it? They get driven even deeper into poverty, and the gap between the haves and have-nots remains just as wide.

Some people get closer to climbing out of poverty, and others fall deeper into it? I don't think that's the gap staying just as wide, I think that's the gap getting wider.

Even so, eat the rich.

[Cow Poke]

Even so, eat the rich.

Gratuitous smart alek remark:

Have you ever gotten a job from a POOR man?

[Spartacus]

Gratuitous smart alek remark:

Have you ever gotten a job from a POOR man?

Yes. I have been employed by a priest under a vow of poverty

[Cow Poke]

Yes. I have been employed by a priest under a vow of poverty

How much did that pay, exactly?

[Spartacus]

How much did that pay, exactly?

Irrelevant.

We don't have to eat ALL the rich... just, you know... the people who own Wal-Mart. It's like that "Dads Against Daughters Dating" slogan: shoot the first, and word will spread

[Cow Poke]

Irrelevant.

THAT little, eh?