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  1. #12

    Join Date
    Mar 2007
    Fairfax, VA
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sharmak
    The answer to 1) is no - MW doesn’t make those decisions. Show me a law that says that companies must fire poor people or otherwise marginalize them!
    You answered a different question than I asked. I didn't ask "does the MW require them to be fired?" I asked "does the MW hurt them?" IE are their conditions better or worse after the MW is raised?

    Can you answer that?

    Quote Originally Posted by Sharmak
    The answer to 2) is that I’m not clear where you get the breakdowns for these numbers and even if they’re applicable outside of the specific study you got them from. It’s also distracting, I concede that you have disputed studies to back your case.
    This isn't quite correct. I don't have a couple of disputed studies. I have 85% of all studies and 90% of all labor economists supporting the numbers I've offered here to create the table.

    Quote Originally Posted by Sharmak
    Your suggestion to roll things back does nothing to fix the reason for MW.
    That is correct...and irrelevant. This is like arguing that my decision to not stab a person does nothing to fix their cancer. Sure, so what? The question is, are they better off, in total, in a situation where they've been stabbed or in a situation where they are not?

    To be utterly pedantic about this to avoid the expected rebuttal, which situation is better given the data:

    a) Per month, per 100 people, there were $704,000 wages paid and $80,000 in benefits paid.

    b) Per month, per 100 people, they were $675,385 wages paid and $117,135 in benefits paid.

    A or B Sharmak?

    Quote Originally Posted by Sharmak
    So you’re saying that MW *only* benefits those families that don’t really need the job in the first place...
    No. I'm saying that group of people who get a wage boost in the table are over represented by people from middle class families. IE that people from middle class families are more likely than people from low income families to get the increased wage or to keep their job.

    I'm sure you realize your small sliver of observations isn't a good scientific sample right? Why don't we stick with the peer-reviewed work of actual scientists;

    Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%)...

    I would specifically point you to table 5 on page 28...In turn, you'll notice that older, non-minority groups have a positive elasticity, meaning they do get jobs when the minimum wage increases.

    So to re-emphasize my conclusion. Increases to the minimum wage (or whatever wage mandating solution you are discussing) benefits older, whiter people at the expense of younger minorities.
    The minimum wage reduces employment most among black teenage males.
    Al-Salam, Quester, and Welch (1981), Iden (1980), Mincer (1976), Moore (1971), Ragan (1977), Williams (1977a, 1977b).

    The minimum wage helped South African whites at the expense of blacks.
    Bauer (1959).

    The minimum wage hurts blacks generally.
    Behrman, Sickles and Taubman (1983); Linneman (1982).
    The minimum wage increases the number of people on welfare.
    Brandon (1995), Leffler (1978).

    The minimum wage hurts the poor generally.
    Stigler (1946).

    The minimum wage helps upper income families.
    Bell (1981), Datcher and Loury (1981), Johnson and Browning (1981), Kohen and Gilroy (1981).


    Specifically, the vast majority of minimum wage earners are not sole income providers (meaning they live with someone who also makes a wage). And two thirds of those people live in a household with 2-3 times the federal poverty limit (if we include anyone more than two times the poverty limit it is even higher). So the vast majority of minimum wage earners affected by the increased wages will come from non-poor households. What is another characteristic associated with those households? Higher skill levels. IE the kid from an upper middle class family has a higher skill level than the same kid coming from an urban ghetto or poverty line family.

    Quote Originally Posted by Sharmak
    A company needs to hire a minimum number of people to operate efficiently so increasing MW just makes it more expensive to maintain their hires... And what is “additional excess supply”’anyway?
    Or it can substitute those workers with machines, or go out of business, or stop offering the service or product those workers create, right? All of which would cause job losses.

    "Additional excess supply" are the people who lose their job when you increase the minimum wage.

    Quote Originally Posted by Sharmak
    In the cases I have shown, it was explicitly stated that over supply caused lower wages.
    Huh? I think you might be imagining that. Can you point out a single source I've offered that has said that was the starting condition? If not, could you retract that claim?

    And, to help you step out of this error, I'll offer a hint: wages are determined by the marginal contribution of the job. IE, the upper limit an employer would rationally pay an employee is the amount of revenue they contribute to the company right? Any number above that would force bankruptcy, right?

    Quote Originally Posted by Sharmak
    But there are also people who dispute your case and they hold more sway for some reason.
    There are a tiny minority who say that there is no observable effect (ie the effect is too small to measure). No economist that I can find says that it has no effect. And perhaps the reason they hold more sway for you is that they confirming your opinion before entering the thread?

    If I pointed out that 85% of climate scientists agreed that man was causing a majority of observed warming, would you find that number persuasive? I think you would (given that you've made that argument in the past). Thus this isn't about data or studies, or consensus, its about cognitive dissonance.

    Quote Originally Posted by Sharmak
    Your lack of an alternative solution and your lack of admission that people ought to have low wages speaks volumes. You keep side stepping these questions and I wonder why?
    Let's try an analogy to clarify this issue. You go to the doctor tomorrow and he says, "Sharmak, you have an extremely high cholesterol level that puts you at risk of a heart attack."

    You ask him what can be done.

    He reponds, "I'd like to prescribe e-coli. Now, 85% of studies and 90% of doctors say the e-coli will make you incredibly sick. The rest haven't shown that it will or weren't sure."

    You gasp, "how many found it would help?"

    "Oh, none, at least none that were able to get published in a journal."

    Sharmak: "I don't know doc, this doesn't sound like a good idea, I think I might not take the e-coli."

    He throws down his clipboard in frustration, "Look, you haven't addressed why not taking the e-coli would make your cholesterol better, are you crazy!"

    If I were to offer a course of treatment that wasn't shown to make your illness better and was usually shown to make it worse, wouldn't not taking it be a sufficient deduction? Why would I then need to propose an anti-lipid treatment to rule out taking e-coli in the above scenario?

    Unrelated to my response to Sharmak above, a new working paper by Neumark and Shupe has been released that has some very interesting findings.

    From the abstract (emphasis mine):

    We explore the decline in teen employment in the United States since 2000, which was sharpest for those age 16–17. We consider three explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum
    wage, could reduce employment opportunities and raise the returns to human capital investment. We find that higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of those age 16–17 since 2000. We also consider implications for human capital. Higher minimum wages have led both to fewer teens in school and employed at the same time, and to more teens in school but not employed, which is potentially consistent with a greater focus on schooling. We find no evidence that higher minimum wages have led to greater human capital investment. If anything, the evidence points to adverse effects on longer-run earnings for those exposed to these higher minimum wages as teenagers.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.



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