Inflation vs a 'Living Wage'

[Ace309 0]

Progressives and Greens often talk about the importance of raising the minimum wage or creating a 'living wage' such that workers below the poverty line could feed themselves and family, pay rent, etc.

 

It seems to me that a simple raising of the minimum wage wouldn't accomplish anything but increasing inflation - the workers cost more, and the cost gets passed along in the price of goods and services provided by businesses that employ minimum-wage workers. It creates a vicious circle.

 

Of course, I'm bad with economics, so here are my questions:

 

- Is the "minimum wage hike -> inflation" inference correct?

- Is there a way to avoid inflation while raising the minimum wage?

- How come I can't get no Tang 'round here?

 

Discuss.

[Guest TheGame2705]

I HATE HATE HATE the idea of raising minimum wage. That means all these stupids kids who work at Target will get like $9 an hour to wear red shirts and walk around. Only certain people should benefit from the living wage as well.

[EricMM 0]

Well it wouldn't directly cause an increase in minimum wage since not everybody makes minimum wage; at least I think so.

 

Right?

[Jobber of the Week 0]

Minimum wage is supposed to be enough money to have food, water, light, and a roof (small and/or old, it'll do) over your head.

 

As such what minimum wage mostly inflates is basic necessary foods. Like bread, for instance. Most people affording minimum wage can't afford DVD players and plasma TVs.

 

So while that could create some sense of inflation, the only other alternative is starvation. We're really not using up much more bread, water, and cheese than we would at our current population even if everyone had great jobs.

[Rendclaw 0]

since prices for electricity/gas, phone service, cable, food and gasoline are not going to come down anytime soon, I don;t see why not.

 

Living where I am, I would need to make a minimum of $12 an hour to have an outside shot at living in my own place. 13 or 14 is more plausible, since you have to factor in healthcare, which is a BITCH up here.

 

Screw the snotty kids at Target. I want my own damned apartment.

[NoCalMike 0]

Minimum Wage certainly can't pay for the necessities out here in CA. And no it has nothing to do with the economy or Gray Davis, that is just the way it has always been here due to property value on the constant rise. I don't know how I am ever going to buy a house unless I want a 200 year mortgage. The Same house my parents bought ten years ago is about 150,000 more in value even though the overall area has gone down in value.

[Guest Retro Rob]

Minimum wage is supposed to be enough money to have food, water, light, and a roof (small and/or old, it'll do) over your head.

Umm... Going by that I believe that minimum wage needs to go up. I don't even know what it is exactly, but it is $5 and change. If you work a full-time job for lets say $5.50, you would make $11,440 BEFORE taxes. That might JUST be enough for the necessities you listed (although I don't know of any apartments that cheap around here), but what about healthcare, taxes, bills, sudden expenses, etc.?

 

Personally, all of my jobs have been off the books or side jobs at home, so I never experienced working for minimum wage.

[Dr. Tom 0]

I'm not an expert in economics, so I can't prove or disprove the correlation between the minimum wage and inflation. However, a sizable hike in the minimum wage would certainly cause a similar hike in unemployment. The national chains could soak up a lot of the cost, but mom-and-pop shops would have to let people go. Since a lot of minimum-wage jobs are found in inner cities, it would also wreck the unemplyment rates there, and that's not something we should be mucking around with.

[MarvinisaLunatic 0]

I took economics in high school, and the main argument against raising minimum wage is pretty obvious if you think about it. If a company has to pay their average employees a higher wage, they will inevitably end up cutting jobs to compensate so that they don't end up losing money because of it. So in the end, raising the minimum wage results in a slight increase in unemployment. With the economy as it is now, raising the min. wage would be a castrophe. Its no wonder that most companies see it to to their advantage to cut jobs here in the US and outsource jobs to people over in Inda, etc, who would be very happy making the equivalent of 20 cents a day (I dont know exactly how much they get paid, Im just guessing..).

[NoCalMike 0]

Well ultamitely any corporation that cane move out of the USA WILL move out, as far as production goes, but then it is up to the citizens not to support that product. I mean Ford/Chevy fool people into thinking they are AMERICAN MADE TOUGH-*gags* yet most of their auto parts are made in mexico.

[Dr. Tom 0]

Mike, that's because we don't actively try to retain businesses and manufacturing. Sure, sweatshop workers can get paid two dollars a week, but incentive packages to a company would probably keep them stateside. And any loss in tax revenue is made up by the fact that Americans are still going to be employed, and paying taxes.

[Jobber of the Week 0]

Trade could certainly be balanced better and it doesn't help that moving out of the USA saves them a lot.

 

Just another reason I'm begging to give that man on Pennsylvania Ave an axe when his job satisfaction poll comes around in 2004.

[Guest Agent of Oblivion]

That incentive business is no bullshit either. There's many communities that have CEDIT taxes, and things of that nature which actively bribe companies to settle down, by paying for their utilities, or the property..things like that.

[Guest MikeSC]

Trade could certainly be balanced better and it doesn't help that moving out of the USA saves them a lot.

 

Just another reason I'm begging to give that man on Pennsylvania Ave an axe when his job satisfaction poll comes around in 2004.

Wasn't aware that this suddenly became a problem since Jan. 2001.

 

Then again, I don't remember CNN running anything about the nat'l debt during Clinton's term at any point.

-=Mike

[godthedog 0]

actually, i remember seeing quite a bit of news about clinton chipping away at the debt.

[Guest MikeSC]

actually, i remember seeing quite a bit of news about clinton chipping away at the debt.

For his 1st 2 years, he ran huge deficits.

 

The GOP House fixed it.

-=Mike