Eliminating minimum wage would help the very poor!

[nobody's_hero]

Many carpool.

In 1970, minimum wage was $1.60 & gold was $36. One hour at minimum bought you 0.044444 oz of gold. Today, if you were paid 0.044444 oz of gold per hour, that would be worth $71 (at $1600/oz). By one measure, a 1970 minimum wage job is worth ~$142,000 annually today.

Anybody thinking minimum wage is designed to compensate for inflation ought realize the horrible failure it is.

Of course it's a horrible failure. It hasn't kept up with inflation. But out-rightly getting rid of it isn't going to keep up with inflation, either. How does reducing minimum wage from $7.25 to $5.00 an hour make the Fed stop printing the dollar into oblivion? It doesn't.

No one seems to be able to answer that.

Whether you get paid $50.00/hr or $0.50/hr, the dollar is still losing value. Abolishing the minimum wage at this point would be like spitting in the wind.

EDIT: Though, as I said, if they did abolish it, the one silver lining I could see is that people would quickly discover how much the dollar is losing value, and might do something about it. However, would they ask for an increase in the minimum wage (put on a bandaid)? or would they abolish the Fed so we have a stronger dollar (cure the disease)?

 

[MaxPower]

I think a big misconception is that minimum wage helps the very poor because it forces businesses to pay a minimum wage per hour for employees. I guess the way that some people see it, it is to keep the way employees are treated fair and ensure that the very poor aren't being paid $1.00/hour.

Well I'm here to argue that eliminating the minimum wage altogether would help the very poor. At the very least it would cause the unemployment rate to drop. Companies would be able to hire employees for let's say $5/hour to do a job that brings them in approximately the same amount of money. Instead, with a minimum wage, they are paying employees $7.25/hour for work that is worth $5/hour. This forces businesses to make cuts to their workforce because they can't afford to hire enough people at $7.25/hour when they're only bringing in about $5/hour for every employee they have hired at that wage.

Now, in our country there is a federal minimum wage and states set their own minimum wage as well. I'm not looking at this from a political perspective, moreo from an economic perspective.

From an economic perspective, eliminating the minimum wage allows businesses to hire more employees and overall helps the very poor stay employed. Keeping the minimum wage causes the unemployment rate to rise and is detrimental to the very poor. True or false? Agree or disagree?

I assume virtually everyone here already holds this position. It might have been a bombshell somewhere else, but not on Ron Paul Forums.

 

[nobody's_hero]

Well, I thought about it some more. If you guys want to end the miminum wage, I say let's try it.

However, I'm not getting my hopes up that the dollar will suddenly stop free-falling once we do. Gas will still be going up. Groceries will still go up. People will undoubtedly have to work more hours, for less compensation. Employers will be able to hire more workers (which, I agree, is good), but that simply means they will pay more workers with less amounts of increasingly-worthless paper (so nothing really changes).

I really think that is the critical issue in 'helping the poor':to have a stronger dollar.

The minimum wage isn't that big of an issue. Bailing out banks in Europe to the tune of trillions of newly-created fiat dollars is what hurts the poor (and everybody who isn't a bailout beneficiary)

I wouldn't hesitate to work for $1/hr if the dollar was still worth what it was 50 years ago. But, I really doubt you could get people to go for that in today's economy.

 

[kezt777]

Which is one of the many reasons why it is worthwhile not to have a job on the bottom of the totem pole. Isn't this why our parents encouraged us to do well in school, so that we could get better jobs?

I think this is where we have to be careful too because a LOT of minimum wage jobs around here now are ones that you require varying amounts of secondary education or further training for. In fact, in my city, people who work in fast food restaurants and gas stations have starting wages above min wage because in this day and age, young people don't want to work 'for so little'. I was offered a job about 3 years ago at an A&W restaurant by one of our daycare parents because she found out I was getting paid $11/hr at the time and she starts people at $14/hr. I need extra classes, continuing Professional Development in various child development courses etc to keep my job. I love my job or I would be looking around for something higher paying but the funny thing is, the crappy jobs are the higher paying around here for those who do not have an education. I could go work at my kids' school once the littlest one starts, as an Education Assistant, because I have the experience and education for it already - but I would be making between $12 and $16 an hour and it's tough work sometimes (and I feel very important, working will little humans every day), but I could go make the same or more at a local fast food joint. It's bizarre. I don't know if it's because min wage has gone so high, lots of places that have work that is not 'desireable' have had to pay even more (but chains and larger businesses that have a bigger profit margin) and other places that rely on govt handouts or regulations like my workplace, rely on people to work for lower pay because they like the work and think it's important, or what. I have no real idea. It's just something I've noticed over the years. In 1991 I made $5.25 an hour after 2 years of working at KFC, and we had people applying allllll the time - now they start at over $12/hr and have trouble finding people to fill the positions. There are 'now hiring' signs in these FF places a lot despite the wages actually being above minimum wage. I don't get it!

 

[ILUVRP]

many small business owners hire someone at min wage , they get no bennies for 90 days , before 90 days the owner gets rid of them , hires new people , keeps repeating .

 

[Massachusetts]

Well, I thought about it some more. If you guys want to end the miminum wage, I say let's try it.

However, I'm not getting my hopes up that the dollar will suddenly stop free-falling once we do. Gas will still be going up. Groceries will still go up. People will undoubtedly have to work more hours, for less compensation. Employers will be able to hire more workers (which, I agree, is good), but that simply means they will pay more workers with less amounts of increasingly-worthless paper (so nothing really changes).

I really think that is the critical issue in 'helping the poor':to have a stronger dollar.

The minimum wage isn't that big of an issue. Bailing out banks in Europe to the tune of trillions of newly-created fiat dollars is what hurts the poor (and everybody who isn't a bailout beneficiary)

I wouldn't hesitate to work for $1/hr if the dollar was still worth what it was 50 years ago. But, I really doubt you could get people to go for that in today's economy.

I agree that the dollar needs stronger purchasing power before we scrap the minimum wage. You need the right economic environment to abolish the minimum wage. There's no way anybody could live off less than the minimum wage now with gas prices being as high as they are.

 

[csu1987]

You should be good to go for another 2 years with such low interest rates guaranteed. Get busy. Btw if people got summer jobs at 15 they could do the same thing by 19 almost. the housing market won't be going way up until at least 3 years. No earlier.

If you save it, you'll get robbed, lol.

No one in his right mind (or at least, paying attentiong to the dollar's declining purchasing power) is going to work for $1000/mo and hold on to it for 3 years, given the rate of inflation. That down payment is going to increase by the time they are ready to buy a home. The military might be a good bet from an economic standpoint, since you will be taken care of (somewhat) so long as you are in the service.

 

[csu1987]

Most of the people who make minimum wage are either part time workers or high school students just trying to make a little extra money. Very few adults actually work full time at minimum wage jobs.

That's not true at all anymore. A lot of adults make min wage and the ones that don't = welfare.

 

[Liberty4life]

I would like to add my perspective on this,

Here's the deal,

I know a lot of people are in love with the idea of minimum wage because it supposedly helps the poor, but it does no such thing, what it does is as the OP has pointed out, is restrict the amount of people an employer can hire. Ok how does this effect everything else?

Less employees equals less productivity, equals less products equals higher prices, inflation and many other economic ills.

Ok, lets look at the other side of the coin,

If you have no minimum wage, what will happen is businesses will be able to hire as they need, more products will be created and prices will fall.
More people will be employed and guess what, more products will be purchased, this will start a new cycle of increased production, again prices will fall.

So the overall net effect is that more people will be employed, while they make less money, prices will be lower, the economy will surge with new jobs.

This doesn't mean that more experienced workers will get lower pay, in fact they might get more, as the needs of a company reflect the needs of the economy more higher skilled workers will be needed and guess what they will be in demand, employees will be in the drivers seat of the economy.

So there will be jobs that are low paying, and these will be filled by younger people just starting out or other people who have different needs.
But there will be also higher paying jobs that will go to higher skilled workers, younger less skilled workers will have more incentive to learn skills, thus opening up their old job to another youngster.

That my friends is the dirty little secret they don't want you to know, you can't tell me for a second, college grads don't see this.
This is one wrench in the machine that is slowing our economic growth, Ron Paul please notice this, and talk about it.

 

[csu1987]

Can someone debunk this intelligently? Please watch the video carefully.

http://www.youtube.com/watch?v=7gHpYUO4u5g

"k Well, someones gotta push the fuckin broom. And if thats what they do 40 hrs a week, then they deserve a decent living. Your time is your time, period. And I dont believe that businesses cant afford to pay employees more. They are just too greedy. How bout they try taking a pay cut, rather than take it from us...the ones that actually do the work that makes them their money."

 

[csu1987]

Ok, lets look at the other side of the coin,

If you have no minimum wage, what will happen is businesses will be able to hire as they need, more products will be created and prices will fall.
More people will be employed and guess what, more products will be purchased, this will start a new cycle of increased production, again prices will fall.

So the overall net effect is that more people will be employed, while they make less money, prices will be lower, the economy will surge with new jobs.

You make this sound nice and simple but you don't provide any evidence of this happening so nicely. In fact people would probably spend LESS as they are holding onto their money to pay for gas and anything important. Btw you won't be making jack shit if you're making less than the min wage. You'll also have to work more like a slave and work ridiculously longer hours while trying to get by.

The economy won't improve until we are off the fed reserve system and that is the reality. No way in hell people are going to work for less than peanuts with a fed reserve system still going. They will hang out and use the welfare system like they do every day in California.

Prove me wrong.

 

[ILUVRP]

it has always been my belief that there is only 2 forms of goverment in the world .

fascist and socialist , dems and repub's are just names , they are somewhere in the middle of f/s systems and at time start going a little toward the fascist of socialist sides .

the way things are going now it is my 2c that overall we are going toward the fascist side , mainly because we are losing our middle class at a very high rate because of losing out mfr base .

i am afraid we will start swinging toward the socialist side if things get much worse for the lower/middle class.

that will get a big bump with lowering the min wage.

 

[Brett85]

Ron Paul: Abolish minimum wage to ‘help poor people’

http://www.rawstory.com/rawreplay/2011/09/ron-paul-abolish-minimum-wage-to-help-poor-people/

 

[The Gold Standard]

If they keep printing money then people will suffer whether or not there is a minimum wage. Eliminating the minimum wage just allows more people to get jobs. Sound money allows them to make a living on those lower paying jobs.

 

[Liberty4life]

Following up on my previous comment, as it stands now, employers have to be very discriminating when they hire because they are investing quite a bit of confidence in their new hire, with a lower wage, they can hire quicker and easier, see if the new guy works out and go from there.

With increased productivity all products will be more abundant, even gas, there will be a tendency to save of course, this money will also help as it gains interest in a bank, now banks will have more money to invest in businesses, and businesses will have more capital to hire new employees at higher wages.

Just because you make less money doesn't mean more work hours, as I said prices will plummet as more products line the shelves, markets will have to lower prices to get people to buy them, more people buying products will increase need for more products.

While he is correct a true fix will be related to the elimination of fiat money and going back to a true value based dollar, this doesn't mean its the only solution.

There will always be slackers, but as they see their peers doing well in life they will soon decide they are missing out on something.

 

[nobody's_hero]

You should be good to go for another 2 years with such low interest rates guaranteed. Get busy. Btw if people got summer jobs at 15 they could do the same thing by 19 almost. the housing market won't be going way up until at least 3 years. No earlier.

But isn't that basically just, a "rat race", with folks trying desperately to out-run inflation? I don't know about everyone else, but I'd rather not spend my life slaving away for some idiots at the Federal Reserve who keep moving the goal-posts whenever I get close to my goal.

Maybe that's why so many people are starting to say, "screw it, I'll just stop working." (of course, welfare/unemployment does play a role in their ability to do that, eventually though, it will run out, or the dollar will collapse; I suppose if those 'crutches' didn't exist, some folks would have started a French revolution by now, and this debate here would be rather moot).

I mean, your income isn't actually yours if someone else can easily undermine the value of your earnings with the power of a printing press (or punching some numbers on a computer screen, which is how they do it now-a-days). Whatever compensation you get for your current work and effort shouldn't just magically devalue over time.

That's what hurts poor people. That's why we're trapped at the bottom rung, and that's why the middle class is destined to join us, as the Fed puts its boot down on all of us. When I talk to people about monetary policy and Ron Paul, I try to get people to see that it isn't about class warfare.

We're all getting screwed.

If they keep printing money then people will suffer whether or not there is a minimum wage. Eliminating the minimum wage just allows more people to get jobs. Sound money allows them to make a living on those lower paying jobs.

In fewer words than I used, you just summarized my position. Thank you.

 

[nobody's_hero]

Can someone debunk this intelligently? Please watch the video carefully.

http://www.youtube.com/watch?v=7gHpYUO4u5g

"k Well, someones gotta push the fuckin broom. And if thats what they do 40 hrs a week, then they deserve a decent living. Your time is your time, period. And I dont believe that businesses cant afford to pay employees more. They are just too greedy. How bout they try taking a pay cut, rather than take it from us...the ones that actually do the work that makes them their money."

If I may critique that link, by stating that raising the minimum wage (or subsidizing low-income earners) is no more of a solution than lowering (abolishing) the minimum wage. The issue of the level of wages is not the most important factor. The issue of the *value* of wages (paid in dollars) is critically important. We have to end the Fed or else the value of the dollar will continue to fall, regardless.

I'm not a big fan of the youtube user "SchittReport", either. He's a big-time Keynesian economist who throws out a lot of babies with the bathwater when it comes to Peter Schiff's ideas.

 

[LBennett76]

Most of the people who make minimum wage are either part time workers or high school students just trying to make a little extra money. Very few adults actually work full time at minimum wage jobs.

Also, why exactly do you support Ron Paul if you support massive government regulations like the minimum wage? Do you realize that Ron Paul wants to abolish the minimum wage?

Obviously you've never been where I live. All jobs around here are minimum wage unless you have a job that requires a degree. And even entry-level positions with those are minimum wage. At the Wendy's I worked at, 3 employess were high school students. The other 25 were adults. This is their only job. A few have worked there for almost 20 years. Any of the fast food places have teenagers, but they all have more adults than teenagers at them. Any job you look for in this town, fast food, retail, dietary aides and custodial at the hospital... all of it is minimum wage. And basically every single person who works at them is on food stamps unless they have a spouse with a better job. Sure they could drive 1/2 hour to an hour out of town... and get a minimum wage job. The Ohio Valley in SE Ohio is not a very wealthy area. We never left the Depression really.
Just giving some perspective. Less than minimum wage here and 80% of the population will be on government assistance. If we could get prices to go down, we definitely could get rid of it. Until that happens... And every place around here is always hiring. High turnover rates while people find a minimum wage job they can stand working at.

 

[furface]

Germany doesn't have a minimum wage, and they have a very successful economy. However, they have other laws that protect the poor like universal health care, housing subsidies, and rent control. They also have an aging + declining population, which almost guarantees high employment. Arguments for and against minimum wage would need to take into account demographics and other social programs.

I have found that Americans who are against the minimum wage and whine hard about inflation are usually on some form of welfare themselves. They tend to be retired on social security or a government pensions or disability. That's what I have found. Employers I know are in favor of it because it eliminates incentives for their competitors to price them out by screwing their workers. Manufacturing that can't compete with countries like China has a host of problems in America, and wages are just one of them, probably a minor one at this point.

 

[The Free Hornet]

Of course it's a horrible failure. It hasn't kept up with inflation. But out-rightly getting rid of it isn't going to keep up with inflation, either. How does reducing minimum wage from $7.25 to $5.00 an hour make the Fed stop printing the dollar into oblivion? It doesn't.

No one seems to be able to answer that.

"Eliminating minimum wage" is the issue. Not lowering it. Maybe you need your own thread to discuss why you love the minimum wage so long as the Fed exists. You came up with a complete fantasy that inflation or the Fed is the cause of the minimum wage. It isn't. Having been shown that the minimum wage doesn't keep pace with minimum wage, you have the gall to ask "How does reducing minimum wage from $7.25 to $5.00 an hour make the Fed stop printing the dollar into oblivion?". That's not the fucking issue!

If I may critique that link, by stating that raising the minimum wage (or subsidizing low-income earners) is no more of a solution than lowering (abolishing) the minimum wage. The issue of the level of wages is not the most important factor. The issue of the *value* of wages (paid in dollars) is critically important. We have to end the Fed or else the value of the dollar will continue to fall, regardless.

You are Fed-trolling the issue and are secretly in love with minimum wage.

Ending the minimum wage has jack-shit to do with debt, deficits, the fed, printing money, monetary expansion. The minimum wage does contribute to inflation, but you are blind to anything but the Fed as an inflationary cause. Nobody - heh - said, "I know what will piss off Bernanke - end the minimum wage! ROAR!!!".

You made an unsubstantiated claim (Fed leads to minimum wage) and are now asking people to prove the reverse (ending minimum wage will stop the Fed). It is 100% unsubstantiated bullshit.