A Higher Minimum Wage doesn’t Reduce Poverty

Discussion in 'Entitlements, Social Programs, and Health Care' started by Emma, Dec 31, 2015.

  1. We reach the end of the year with yet another tale of crazy, one percenter wingnuts trying to claim that jacking up the minimum wage won’t do much to alleviate the issues facing the poorest Americans who the Democrats are seeking to help. This time the hateful claims are coming from… a study published by the federal government.


    Increasing the minimum wage is an inefficient way to reduce poverty, according to a Fed research paper that comes amid a national clamor to hike pay for workers at the low end of the salary scale.

    David Neumark, visiting scholar at the San Francisco Fed, contends in the paper that raising the minimum wage has only limited benefits in the war against poverty, due in part because relatively few of those falling below the poverty line actually receive the wage.

    Many of the benefits from raising the wage, a move already undertaken by multiple governments around the country as well as some big-name companies, tend to go to higher-income families, said Neumark, who also pointed to research that shows raising wages kills jobs through higher costs to employers. Neumark is a professor of economics and director of the Center for Economics and Public Policy at the University of California, Irvine.

    I’m sure that Hillary Clinton and Bernie Sanders will find a way to spin this story, as well as Ben Carson for that matter. (Rick Santorum too, now that we mention it.) But the numbers here really don’t come as any surprise when you stop to think about it. This report doesn’t deal so much with the employment impacts of a higher federal minimum wage, but more with who is getting those wages.

    As the study shows, 57% of families currently below the poverty line have no members in the workforce, receiving all of their income from social welfare or entitlement programs combined with charity. A higher minimum wage has no effect on these families. Of the roughly 3 million workers who do receive the minimum wage, more than half are between the ages of 16 and 24 and are generally not the primary breadwinners in their households. Further, they found that among the families below the poverty line, nearly half (46%) are making more than the proposed $10.10 per hour already and more than one third (36%) are making 12 dollars per hour or more.

    With those figures in mind, only a relatively small fraction of Americans living below the poverty line would see one extra red cent in their pockets with a higher federal minimum wage. And what can not yet be predicted is how many of those who did would be offset by the number of employers who would simply terminate unskilled labor positions to avoid the increased labor costs, moving to either more streamlined services or automation. And this is coming straight from the feds. How will the Fight for Fifteen folks and their pet Democrat candidates respond to this new information aside from abject denial? Oh, wait… the denial started already.


    “The mainstream view, as illustrated by meta-surveys of the whole minimum wage research field, is that the job loss effects of raising the minimum wage are very, very small,” Paul Sohn, general counsel for the National Employment Law Project, said in an email to CNBC.com.

    I’m sure the phrase “very small” will come as great comfort to the guy who loses his job operating the fry machine around the holiday season. But don’t let that bother you, guys. We’re from the government and we’re here to help.

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  2. I think the minimum wage does need to be raised and raised a lot. If it were just the market influencing wages that would be one thing but low wage workers are subsidized, they can get federal and state benefits and that allows employers to have taxpayers pay part of their employee compensation. Some wages are artificially low right now.
     
  3. So, raise the minimum wage so the unskilled will be comfortable and well paid enough to never gain skills or push themselves to improve? What about people who are earning just above minimum wage? Are they now all of a sudden part of the earner group classified as minimum wage earners? Of course not! Their wages will need to go up too. Then the wages of the people earning more than them will need to be increased, and so on, and so on. What happens next? Something called "wage push inflation" which will take the purchasing power of the lowest workers and decrease it to the point that their increase in wages is essentially meaningless, as the price of everything will have increased relative to the increase in wages. So, what would be accomplished by raising the minimum wage substantially? Absolutely nothing. The lowest earners will still receive government subsidies and benefits as their true purchasing power will not have been changed.
     
    Agravan and Grace like this.
  4. If you want a higher minimum wage vote for that nutbag Bernie Sanders. Of wait, nevermind...he is a total loser hypocrite.

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  5. I am completely against raising the minimum wage at all. It's another form of welfare that private businesses are forced to pay to unskilled workers, who 9 out of 10 times, are problem employees, drug addicts, or ex-offenders.

    You want to make a good law? Make minimum wage jobs only available to high school and college kids. You could also include retirees.

    This would force able body adults to improve themselves and learn appropriate job skills or a professional trade and contribute to society.
     
    john123 likes this.
  6. If Washington wants to completely kill the little man; they'll have $15 minimum wage. 7.25 (or whatever it is) is pretty high for what some people do around here. Moving dirt isn't a skill at all. Anyone with a decent back can do that; and it's not a $15 an hour job, it's not a $7 job either; it's more like a $5 an hour job. Honestly, though, if we want to have workers get fair pay; we need to stop the illegals. An illegal Mexican who lives in a hole is more than happy to make $2 per hour, which puts an American out of work. But hey - Obama has everything under control. They'll come here, work illegally, and vote Democrat.
     
    Agravan and hicaf like this.
  7. Yet another point that the MSM fails to cover. There is a real cause and effect relationship between flooding a labor market with unskilled illegal workers and the lack of entry level jobs available to US workers. Not to mention, most of the illegals send that money right back to their country of origin, which negates any sort of positive economic impact argument entirely.
     
  8. Here in the UK, our minimum wage is not enough to live on, and so the government have to top these hardworking people's wage up. Big corporations like Amazon, paying minimum wage, so they can make greater profits, and don't even pay tax in this country!

    Jobs such as care workers and teaching assistant jobs that can never be replaced by machines or other systems, they are needed and the people work damn hard for a good human cause, why should they not be paid enough to live on?
     
  9. I don't think you understand. The "paid enough to live on" factor is directly attributed to how much minimum wage is. If minimum wage is $15 an hour, the companies will have to charge more for their product to be able to pay their employees such a high wage. Chances are that most small companies can't sell something for double the cost, which means they'll either have to fire a bunch of people, or go out of business. Either way is a major loss for the American working man.
     
  10. Follow my sequence of events. No need for complicated analysis.

    I go to McDonald's and order one PLAIN cheeseburger at midnight, only customer there.

    I get my cheeseburger.

    It has everything on it.

    One week later....

    I order one PLAIN cheeseburger.

    This time it has everything except for mustard.

    Tell me why these MORONS deserve $15 an hour.
     
    Fatgnat likes this.
  11. my order is never right. i have a friend who works in fast food and i asked her why this is the case, and she told me it's common practice for black employees to mess up white people's orders on purpose. i believe her.
     
  12. A higher minimum wage does not help much if you are still unemployed. While a step in the right direction, the focus should be to get jobs to people suffering from poverty. Or create more jobs in general.
     
  13. I agree with you. I don't that the minimum wage should be pushed up. The reason that jobs like retail and food are paid so low is because it requires minimum skills, and they are supposed to be jobs for high schoolers. Kids who don't have skills but will need them later on in life. So, why should someone who decided to not go to college get paid $15 an hour when I'm going to college to better myself so that I can get a good job. The pay you make at McDonalds isn't meant to live off. You're right that it's not, which is why you shouldn't be working there if you're an adult paying bills.
     

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