Mitt Romney Mitt Romney: Minimum Wage Should Rise With Inflation

[Cutlerzzz]

I didn't say labor, I meant fiat money.

Then why did you quote my post about the supply curve for labor?

 

[The Free Hornet]

I agree with Mitt. The minimum wage should be tied to inflation since the supply of money is controlled and unlimited. If it was a free market, then he would be wrong, but the markets are controlled and manipulated. Does that make sense to you?

Not to me. Although it is true if money supply goes up, my fixed wage is worth less, it is up to me and my negotiations to affect my wage to reflect that. There is no reason to think my job performance is in lockstop with inflation. Trust me, it ain't (am at work now doing ... nothing).

Now, one could imagine a standard by which ALL of our wages are tide to inflation or deflation (which happens regardless of the long-term trends). For whatever reason, for most of us we negotiate for fixed wages while the value of that wage changes. I for one would not want to encourage further manipulation of CPI or whichever index they settle on for your scheme. Businesses already impacted by inflation, would have double impacts, and might have to automatically layoff workers. CPI creeps up a little, and unemployments creeps up a lot. This could cause inflation to subside but not as a result of the monetary supply. Supply, prices, markets, and paychecks would oscillate more unless you dampened the affects (averaged).

In Ron Paul's world, you are free to argue for a fixed wage or to fix it to something else (gold, CPI, whatever your heart's desire). In Romney/Obama/Bush/Travylr world, the government sets the standards (minimum wage, get ready for equal pay for equal work under Obama II).

You could be free to negotiate for your own wages, but I guess you fear that freedom.

Another way of looking at it... You are making the same mistake Romney is by assuming you know best how to set a price. This is the fallacy of central planning whether it is called socialism, fascism, or communism. Most makes the mistake "per worker". Assuming each worker has a market rate of at least X. You are making that mistake and adding an inflation variable - each worker has a market rate of at least X(I). It is different and it may be a better guess than our current scheme, but it hardly fair to those who can't pass the cost on or get laid off. It could only be a better guess if the wage dropped too with deflation. Good luck getting people to take price cuts.

Another way of looking at it... a US minimum wage of $0.05 per hour is just as wrong philosophically as $8.00 per hour. However, the practical impact of $0.05 wage would be near zero. It might affect those kids getting their lemonade stands kicked over. By ratcheting up the minimum wage with inflation, you may not be more wrong philosophically, but you are treading on making it much more impractical.

Like most interventions, the minimum wage is affective to the degree it is inconsequential. You could have a standard that attacks all but sweat-shop conditions or penalizes workers with clauses they couldn't possilby understand or reasonably agree to. That is not how the minimum wage is used. Rather it is the start point for all union and labor negotiations and the hurdle they add to all new entrants to the labor pool. Politicians love to give in public and steal in the dark.

 

[PaulConventionWV]

Then why did you quote my post about the supply curve for labor?

I was clearly referring to the fiat money supply. Stop putting words in people's mouths. You can bully your way to winning an argument, but your habit of distorting people's words does not reflect well on your ability to argue reasonably and logically.

 

[The Free Hornet]

I remember when the minimum wage was 5.15, and if it were still that, people like me would be undcer ridiculous pressure. In an economy with an expanding money supply, we need a raise.

That is a bad situation. However, if it was 5.15 nationally, prices would be lower and your wage - whether $5.15 or $8 - would go further. You may or may not be better off. In a world with low or no taxes and low unemployment, you would be so so so much better off. It is people at the higher wage levels with established business (older, richer - like the roMney voters) that HATE competition. They know they could be undercut by younger, harder workers, or anybody hungrier. Nothing is better than being established to a large class of voter. It isn't helping the average joe.

 

[PaulConventionWV]

Not to me. Although it is true if money supply goes up, my fixed wage is worth less, it is up to me and my negotiations to affect my wage to reflect that. There is no reason to think my job performance is in lockstop with inflation. Trust me, it ain't (am at work now doing ... nothing).

Now, one could imagine a standard by which ALL of our wages are tide to inflation or deflation (which happens regardless of the long-term trends). For whatever reason, for most of us we negotiate for fixed wages while the value of that wage changes. I for one would not want to encourage further manipulation of CPI or whichever index they settle on for your scheme. Businesses already impacted by inflation, would have double impacts, and might have to automatically layoff workers. CPI creeps up a little, and unemployments creeps up a lot. This could cause inflation to subside but not as a result of the monetary supply. Supply, prices, markets, and paychecks would oscillate more unless you dampened the affects (averaged).

In Ron Paul's world, you are free to argue for a fixed wage or to fix it to something else (gold, CPI, whatever your heart's desire). In Romney/Obama/Bush/Travylr world, the government sets the standards (minimum wage, get ready for equal pay for equal work under Obama II).

You could be free to negotiate for your own wages, but I guess you fear that freedom.

Another way of looking at it... You are making the same mistake Romney is by assuming you know best how to set a price. This is the fallacy of central planning whether it is called socialism, fascism, or communism. Most makes the mistake "per worker". Assuming each worker has a market rate of at least X. You are making that mistake and adding an inflation variable - each worker has a market rate of at least X(I). It is different and it may be a better guess than our current scheme, but it hardly fair to those who can't pass the cost on or get laid off. It could only be a better guess if the wage dropped too with deflation. Good luck getting people to take price cuts.

Another way of looking at it... a US minimum wage of $0.05 per hour is just as wrong philosophically as $8.00 per hour. However, the practical impact of $0.05 wage would be near zero. It might affect those kids getting their lemonade stands kicked over. By ratcheting up the minimum wage with inflation, you may not be more wrong philosophically, but you are treading on making it much more impractical.

Like most interventions, the minimum wage is affective to the degree it is inconsequential. You could have a standard that attacks all but sweat-shop conditions or penalizes workers with clauses they couldn't possilby understand or reasonably agree to. That is not how the minimum wage is used. Rather it is the start point for all union and labor negotiations and the hurdle they add to all new entrants to the labor pool. Politicians love to give in public and steal in the dark.

You have a point about negotiating your wage, but the truth is that almost everything is controlled by the elites. If you work for a government subsidized company like I do, then you won't get a raise unless through the force of government because the wages aren't negotiable. If we had someone willing to change this in office, then this would be a moot point, but unfortunately, we don't have that luxury.

 

[Cutlerzzz]

That is what I have said over and over again. Supply and demand curves are accurate with sound money and inaccurate with unsound money. I am having a hard time understanding why you don't understand it.

Sound money is real.
Supply and demand in a system of honest sound money determine price based on value. Supply and demand curves accurately portray exchange values if sound monetary policy is implemented and the curves are accurately drawn.

Fiat money is fake.
Fiat means "let it be so" which is pretend. Fiat is fake based on force of law and guns to protect insiders who are privileged. The result of that is a fiat system (fake) of money supply and demand curves that give false results.

A supply curve does not require money. You can make a supply curve dealing with trade between tractors and cows. It doesn't matter what monetary system is used.

For example, why do Goldman Sachs bankers make millions of dollars each year for golfing, sitting in meetings, and pushing paper back and forth while farm laborers till the soil, plant the seeds, cultivate the plants, and harvest the crop for $8.00 per hour? Certainly the demand for quality food is higher than pushing paper. The farmer provides a valuable product while the Goldman Sachs banker provides no value to society.

You don't know what everyone's situation is, whether it is a company or an employee.

I do not post this stuff for you Cutlerzzz. I endure your childish name calling in order to promote the idea that a free society must use honest sound money as taught by Mises, Rothbard, Paul, et. al.

Mises, Rothbard, and Paul are all against minimum wage.

If we take a small town that has a McDonalds deems that an average employee can create $5.00 an hour worth of productivity, and 50 people apply and get the job, $5.00 is the market equilibrium with 50 people employeed. If the government steps in and forces McDonalds to pay at least $8.00, McDonalds will have to lay off employees (and either set up labor saving machinery or give their remaining workers an increased work load). Meanwhile, dozens of of people will become interested in working for McDonalds due to the increase in pay, but none of them will be able to get the job because it is more than McDonalds can afford to pay.

Making it law that companies have to pay more does not suddenly make their employees more productive. The people that are not laid off will benefit, but everyone laid off loses everything.

No, being against it in a sound money system is not the same as being against it when the money supply is expanding and putting the low earners at risk.

While I agree that the issue is slightly distorted by the fact that we all, first and foremost, would like to stop inflation and return to a sound money system. However, I am thinking in the here and now, and while I would not even argue on this point if it were all just theoretical, I am one of those people who makes below average pay. I remember when the minimum wage was 5.15, and if it were still that, people like me would be undcer ridiculous pressure. In an economy with an expanding money supply, we need a raise.

If minimum wage were still $5.15, the umemployment rate would be lower. Maybe you would be worse off, but many unemployed people would now have jobs.

 

[PaulConventionWV]

That is a bad situation. However, if it was 5.15 nationally, prices would be lower and your wage - whether $5.15 or $8 - would go further. You may or may not be better off. In a world with low or no taxes and low unemployment, you would be so so so much better off. It is people at the higher wage levels with established business (older, richer - like the roMney voters) that HATE competition. They know they could be undercut by younger, harder workers, or anybody hungrier. Nothing is better than being established to a large class of voter. It isn't helping the average joe.

Well the prices are going to increase regardless of the wages because the dollar is much easier to come by. So, it wouldn't really be the same as it is now, and it certainly wouldn't be easier. I agree that the taxes also play a part and they hurt, but that is mostly due to the government's runaway spending.

 

[Cutlerzzz]

I was clearly referring to the fiat money supply. Stop putting words in people's mouths. You can bully your way to winning an argument, but your habit of distorting people's words does not reflect well on your ability to argue reasonably and logically.

Why would you be refering to that? Do I need to start bringing up by dead Goldfish (he was a fine one)?

 

[PaulConventionWV]

If minimum wage were still $5.15, the umemployment rate would be lower. Maybe you would be worse off, but many unemployed people would now have jobs.

You are probably right, and this is really a moot point, but if the money were put into the private sector as long as we are following this system instead of a large portion of it being put into government spending paying off interest, then unemployment wouldn't necessarily increase. That's why I think, while we are still doing this, the minimum wage should go up. Who cares if you have a job but only make $5.15? To me, it would be better to be an unemployed person with a desperate entrepreneurial spirit, than a complacent minimum wage worker who follows the same routine for scraps.

 

[The Free Hornet]

You have a point about negotiating your wage, but the truth is that almost everything is controlled by the elites. If you work for a government subsidized company like I do, then you won't get a raise unless through the force of government because the wages aren't negotiable. If we had someone willing to change this in office, then this would be a moot point, but unfortunately, we don't have that luxury.

Pardon for this, but it could be worse. You work because you clearly wanted to and found a job. I agree you may not ever be in a position to negotiate with your current situation. Your best bet may be making ends meet until finding a different opportunity. Any further price controls on wages could - in theory - subject you to "last in, first out" layoff rules moving you from squeeze to crush.

Also, there is a labor component to prices so even if oil/gold goes up and labor is flat, the CPI would be impacted less by a lower minimum wage. I think the government has you where they want, on a treadmill looking to them for a marginal improvement.*

*Edit/added - I think they have a lot of us here. How many will sell their soul for Romney's promised tax cuts? He makes the picture look better for his demographic (wealthy, older) while completely disregarding the big picture (deficity, Fed, size and scope of government regulation).

 

[Travlyr]

Not to me. Although it is true if money supply goes up, my fixed wage is worth less, it is up to me and my negotiations to affect my wage to reflect that. There is no reason to think my job performance is in lockstop with inflation. Trust me, it ain't (am at work now doing ... nothing).

Now, one could imagine a standard by which ALL of our wages are tide to inflation or deflation (which happens regardless of the long-term trends). For whatever reason, for most of us we negotiate for fixed wages while the value of that wage changes. I for one would not want to encourage further manipulation of CPI or whichever index they settle on for your scheme. Businesses already impacted by inflation, would have double impacts, and might have to automatically layoff workers. CPI creeps up a little, and unemployments creeps up a lot. This could cause inflation to subside but not as a result of the monetary supply. Supply, prices, markets, and paychecks would oscillate more unless you dampened the affects (averaged).

In Ron Paul's world, you are free to argue for a fixed wage or to fix it to something else (gold, CPI, whatever your heart's desire). In Romney/Obama/Bush/Travylr world, the government sets the standards (minimum wage, get ready for equal pay for equal work under Obama II).

You could be free to negotiate for your own wages, but I guess you fear that freedom.

Another way of looking at it... You are making the same mistake Romney is by assuming you know best how to set a price. This is the fallacy of central planning whether it is called socialism, fascism, or communism. Most makes the mistake "per worker". Assuming each worker has a market rate of at least X. You are making that mistake and adding an inflation variable - each worker has a market rate of at least X(I). It is different and it may be a better guess than our current scheme, but it hardly fair to those who can't pass the cost on or get laid off. It could only be a better guess if the wage dropped too with deflation. Good luck getting people to take price cuts.

Another way of looking at it... a US minimum wage of $0.05 per hour is just as wrong philosophically as $8.00 per hour. However, the practical impact of $0.05 wage would be near zero. It might affect those kids getting their lemonade stands kicked over. By ratcheting up the minimum wage with inflation, you may not be more wrong philosophically, but you are treading on making it much more impractical.

Like most interventions, the minimum wage is affective to the degree it is inconsequential. You could have a standard that attacks all but sweat-shop conditions or penalizes workers with clauses they couldn't possilby understand or reasonably agree to. That is not how the minimum wage is used. Rather it is the start point for all union and labor negotiations and the hurdle they add to all new entrants to the labor pool. Politicians love to give in public and steal in the dark.

Look at it this way. There are two systems of money. Fiat and Real. I favor real money. Our system is fiat and it has been since 1913.

Here is the way I see it.
Fiat
Daddy Warbucks has the authority to print the world's money. At first Warbucks only prints whatever is necessary to run society. But after a few years Warbucks wants a raise so he prints more than society needs and pockets the difference. It works so well for Daddy Warbucks that he does it again and again. Daddy Warbucks builds mansions and travels the world unencumbered because he is very wealthy. Daddy Warbucks refuses to disclose his books or be audited. Do you see how he controls the money supply but he does not give the servants a raise? The servants lose purchasing power because prices go up as more and more money chases the same number of goods.

If the servants raises were tied to the amount of money that Daddy Warbucks printed each time, then his servants would keep-up with inflation. (Minimum wages tied to inflation).

As a servant which is better?
Every time Daddy Warbucks prints money approach him and negotiate a raise?
Or automatically tie your raise to his increase when he prints more?

Real
Now let's imagine that sound money policy was the order of the day. Nobody has the privilege of printing money because money is real. The entire situation changes. If you want a raise, then mine for more precious metals, or grow more high quality crops, or make a better mousetrap. In a sound money system you depend upon yourself and you don't have to ask Daddy Warbucks for anything. You can sell him some goods or services, but you don't have to get on your knees.

 

[PaulConventionWV]

Why would you be refering to that? Do I need to start bringing up by dead Goldfish (he was a fine one)?

Why would I be referring to it? Because I stated it in my post. READ next time.

 

[Cutlerzzz]

You are probably right, and this is really a moot point, but if the money were put into the private sector as long as we are following this system instead of a large portion of it being put into government spending paying off interest, then unemployment wouldn't necessarily increase. That's why I think, while we are still doing this, the minimum wage should go up. Who cares if you have a job but only make $5.15? To me, it would be better to be an unemployed person with a desperate entrepreneurial spirit, than a complacent minimum wage worker who follows the same routine for scraps.

Someone with minimum wage can still apply for other jobs, and people with other jobs can still apply for minimum wage. Someone who is not making much money could apply for a part time $5.00 an hour job on the side if there was no minimum wage. Someone not content with a minimum wage job could just apply for an $8.00 an hour job.

 

[PaulConventionWV]

Pardon for this, but it could be worse. You work because you clearly wanted to and found a job. I agree you may not ever be in a position to negotiate with your current situation. Your best bet may be making ends meet until finding a different opportunity. Any further price controls on wages could - in theory - subject you to "last in, first out" layoff rules moving you from squeeze to crush.

Also, there is a labor component to prices so even if oil/gold goes up and labor is flat, the CPI would be impacted less by a lower minimum wage. I think the government has you where they want, on a treadmill looking to them for a marginal improvement.*

*Edit/added - I think they have a lot of us here. How many will sell their soul for Romney's promised tax cuts? He makes the picture look better for his demographic (wealthy, older) while completely disregarding the big picture (deficity, Fed, size and scope of government regulation).

I think you're absolutely right, which is why I try not to rely on the government and, instead try to be creative with how I earn my money based on what I'm good at.

 

[PaulConventionWV]

Someone with minimum wage can still apply for other jobs, and people with other jobs can still apply for minimum wage. Someone who is not making much money could apply for a part time $5.00 an hour job on the side if there was no minimum wage. Someone not content with a minimum wage job could just apply for an $8.00 an hour job.

And I suppose you could also apply for a $20 an hour job if you're not satisfied with minimum wage. You probably won't get it, but why not go ahead and try? I'm talking about people whose skill level is on the low end. I happen to just be one of those whose employment is below their skill level for now, but for those who truly can't make more than minimum wage, it's not as simple as applying for a better job because they don't have better labor to offer.

 

[LBennett76]

As someone who works two jobs, I have quite an opinion on this.
I started one of my current jobs 5 years ago. Minimum wage was $5.15. I was paid a base pay of $10/hr, nearly twice the minimum. Now, in Ohio minimum is 7.70. The base pay of my job did not rise, but through merit based raises, I now make $11.26. With the raise in minimum wage over time all the prices went up to help cover the cost of these wages, but my job didn't compensate for that since I didn't get the same kind of raise.
Second, I've worked a minimum wage job in fast food for the past two years. When I started it was 7.15. I did a really good job and got a raise up to 7.40 within a couple months. A year later, minimum wage went up to 7.40. Guess what my wage becase? 7.40. My merit raise no longer applied. I was then getting the same as a brand new worker. After that I didn't bother worrying about a raise because I knew minimum wage was going to to go up AGAIN this month. It's now 7.70. What's the point in even trying to do a good job when no matter what you'll still get paid as much as the crappiest workers. I worked this same job in high school when minimum wage was 4.25 and I worked 1000 times harder than these punks do who are always complaining they don't get paid enough. They get almost twice what I did for the same job. And minimum wage is supposed to go up AGAIN to 8 something within the next year. This is prices at Wendy's have doubled. To cover the cost of workers. I work at a low volume store comparatively that's in a village of 4500. We are not a large profit store. We usually are somewhere in the red. i think the one month we weren't we had a profit of $300. We're still in business because we were the first store of the current franchise owner as well as being in his hometown. Fortunately business has picked up and we're doing better. But the continual rise in wages for dime a dozen workers is insane.
Inflation is definitely the biggest killer of the poor and middle class.

Hope this all made sense.

 

[Travlyr]

Mises, Rothbard, and Paul are all against minimum wage.

Mises, Rothbard, and Paul all advocated for society to use real money. In a sound money environment I am against minimum wage laws too.

If we take a small town that has a McDonalds deems that an average employee can create $5.00 an hour worth of productivity, and 50 people apply and get the job, $5.00 is the market equilibrium with 50 people employeed. If the government steps in and forces McDonalds to pay at least $8.00, McDonalds will have to lay off employees (and either set up labor saving machinery or give their remaining workers an increased work load). Meanwhile, dozens of of people will become interested in working for McDonalds due to the increase in pay, but none of them will be able to get the job because it is more than McDonalds can afford to pay.

Except if McDonalds lobbied for TARP money and gets it, then they can afford more employees and higher wages without increasing productivity.

Making it law that companies have to pay more does not suddenly make their employees more productive.

If you are friends with the money printer, then you don't have to. For example, the military industrial complex is destructive, but they have plenty of money.

The people that are not laid off will benefit, but everyone laid off loses everything.

Not if the boss can print money at will.

If minimum wage were still $5.15, the umemployment rate would be lower. Maybe you would be worse off, but many unemployed people would now have jobs.

Having a job is not the goal. The goal is to be prosperous enough to enjoy life. Sound money principles as taught by Rothbard in "The Mystery of Banking" will provide opportunity for individuals.

 

[The Free Hornet]

As a servant which is better?
Every time Daddy Warbucks prints money approach him and negotiate a raise?
Or automatically tie your raise to his increase when he prints more?

Not believing myself to be a servant or a Warbucks, my opinion is to disagree. I would agree that every increase in monetary supply should be followed by a swift kick in the nuts of every Daddy Warbucks out there. Of course if the economy was so mapped as you point out, there would be no point in increasing the monetary supply as it would cause unneccesary "friction" (change in prices) and any Warbucks gain is wiped out on a servant payday. I supsect there are very few Warbucks and they don't employ enough servants for it to matter. They might take your offer and be happy. More inflation and higher minimum wages is exactly what the NWO calls for. I prefer not to hand them both on a silver platter...

The very top of the Fed pyramid benefit and some of the low-wage earners who keep their jobs can benefit from your scheme. The rest in the middle and the unemployed are poorer.

 

[Travlyr]

It is not my scheme. I am only a messenger. Paul Warburg is Daddy Warbucks. He and his family are royalty. All the rest of us are their servants. Some servants are better, and more privileged, than others, but everyone except the money changers in the fiat system are servants.

 

[bolil]

They just turned up the min wage in montana... and my hours got cut in half... Im making like 30 cents more an hour and working half as much time... yay for minimum wage... er hmmmm.