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Sen. Elizabeth Warren Makes Case for $22-an-hour Minimum Wage.


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#1 Proudiddy

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Posted 19 March 2013 - 02:00 PM

Look, I'm not the most informed on economics, and I know it would have a ripple effect, but she's got my vote. She's not asking for $22-an-hour, just saying that's what it should be when considering the increase in worker production. She's basically saying the workers have been ripped off and making the argument for the $10 minimum.

The discussion at the very least is a departure point for getting to the root of why all of our nation's wealth is being amassed in the top 1% while the working and middle class toil away living check to check.
http://theweek.com/a...ur-minimum-wage

In his State of the Union address, President Obama called on Congress to raise the federal minimum wage to $9 an hour, from $7.25. A month later, House Minority Leader Nancy Pelosi upped the ante, pushing for $10.10 an hour in three years. Both of those proposals were pooh-poohed as politically impractical and economically suspect. But maybe Obama and Pelosi were actually lowballing the raise we owe low-wage workers.
How high should it go? Here's Sen. Elizabeth Warren (D-Mass.) at a Senate Health, Education, Labor, and Pensions Committee hearing last week, speaking to University of Massachusetts economist Arindrajit Dube:
If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour. So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker. [Warrenwatch below]
Dube agreed, then upped the ante again. If the minimum wage had kept pace with the rise in wealth by the top 1 percent of taxpayers, he added, it would have reached $33 an hour in 2007. Nobody, of course, is arguing for a $33-an-hour minimum wage, and Warren isn't even pushing for $22 — she just wants a bump to $10 a hour. But where did the $22 come from, and does it make any sense?
The actual number is $21.72, and it comes from an analysis by economist John Schmitt at the Center for Economic and Policy Research. That's only one of the numbers he churns out to argue that "the minimum wage is too damn low." In real dollars, the minimum wage peaked in 1968. If that had been linked to inflation (CPI-U), the minimum wage would be $10.52 an hour, and if you look at how the minimum wage fared against the average production worker wage, it would be $10.01 today. But the most egregious imbalance is productivity.
Between the end of World War II and 1968, the minimum wage tracked average productivity growth fairly closely. Since 1968, however, productivity growth has far outpaced the minimum wage. If the minimum wage had continued to move with average productivity after 1968, it would have reached $21.72 per hour in 2012 — a rate well above the average production worker wage. If minimum-wage workers received only half of the productivity gains over the period, the federal minimum would be $15.34. Even if the minimum wage only grew at one-fourth the rate of productivity, in 2012 it would be set at $12.25. [CEPR (PDF)]
However you look at it, Schmitt says, "by all of the most commonly used benchmarks — inflation, average wages, and productivity — the minimum wage is now far below its historical level."
Of course, not everybody thinks that raising the minimum wage is a good idea.
Linking productivity to wages is "one wildly flawed premise," says Erika Johnsen at Hot Air. "The value of productivity is not a constant," and much of the rise of productivity is due to technology.
Should the increase in crop yield from a farmer using a donkey and plow versus a farmer using a tractor be directly proportional to an increase in those crops' market worth because of some sort of imagined moral law about productivity and wages? No, because the market value of those crops has diminished as the ease of production has increased, and if that was the way the world worked, we'd all be paying a heck of a lot more for food right now..... Raising the minimum wage to some arbitrarily-determined level of ostensible just deserts is just another way of throwing market signals under the bus in exchange for more top-down control, which might benefit a few in the short run, but bogs down the entire economy in the long run. [Hot Air]
Johnsen then goes on to quote a New York Times op-ed by Christina Romer, the former head of Obama's Council of Economic Advisers: "Raising the minimum wage, as President Obama proposed in his State of the Union address, tends to be more popular with the general public than with economists." Romer's entire argument is a little more nuanced:
The economics of the minimum wage are complicated, and it's far from obvious what an increase would accomplish. If a higher minimum wage were the only anti-poverty initiative available, I would support it. It helps some low-income workers, and the costs in terms of employment and inefficiency are likely small. But we could do so much better if we were willing to spend some money. A more generous earned-income tax credit would provide more support for the working poor and would be pro-business at the same time. [New York Times]



#2 Kurb

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Posted 19 March 2013 - 02:06 PM

You just can't pay unskilled labor like skilled labor, it just won't work.

#3 stirs

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Posted 19 March 2013 - 02:08 PM

The heck with that, you can make $500 per week signing up. Being unemployed still pays better

#4 thatlookseasy

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Posted 19 March 2013 - 02:10 PM

You just can't pay unskilled labor like skilled labor, it just won't work.


And if the unskilled labor isnt paid enough, the government has to step in and subsidize their pay. You know, like we are doing now.

Pick your poison

#5 Proudiddy

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Posted 19 March 2013 - 02:11 PM

You just can't pay unskilled labor like skilled labor, it just won't work.

True, but where do you draw the line?

It signals that the discussion should be had that even "skilled labor" deserves a bump in pay across the board. Everyone does. It all goes back to the distribution of wealth which is horribly skewed in an obvious way.

As the article says though, there are other ways to decrease poverty and help struggling workers. IMO though, it still doesn't resolve the bigger problem, which is the skewed wealth distribution. I'm just happy actual "public servants" are having the discourse.

#6 Kurb

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Posted 19 March 2013 - 02:12 PM

And if the unskilled labor isnt paid enough, the government has to step in and subsidize their pay. You know, like we are doing now.

Pick your poison


Which do you think has more impact on the economy from the ground up?

Raising the minimum wage still keeps the poor people poor. As the price of good rise to the level of the new cost of operation the gap only changes between the elite rich and the now much larger section of working poor.

#7 Panthro

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Posted 19 March 2013 - 02:14 PM

There is a real issue with the stagnation of wages vs productivity/hours worked.

$22 might be too high.

My question is what is an hourly living wage?

#8 Kurb

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Posted 19 March 2013 - 02:17 PM

True, but where do you draw the line?

But it signals that the discussion should be had that even "skilled labor" deserves a bump in pay across the board. Everyone does. It all goes back to the distribution of wealth which is horribly skewed in an obvious way.

As the article says though, there are other ways to decrease poverty and help struggling workers. IMO though, it still doesn't resolve the bigger problem, which is the skewed wealth distribution.



Does it?

You are paid for what you are worth (usually).

Walmart guy is making walmart money for a reason (again usually).
Welder guy is making his rate for a reason.
Banker guy is making his wage for a reason (this is one of the more corrupt examples).



In my perfect world system, the cream would rise to the top. A highly skilled worker would be in demand, thus companies would compete for his work and he would make a higher wage, gaining himself capital and perhaps giving him the chance to start his one.

Making the minimum wage would hurt more than help IMO.

I would much rather invest in programs to bring people up in employment, across the board, than pay unskilled workers the same thing a Nurse with a 2 year degree starts off making at New Hanover Hospital. Should full time janitor with no education or cultured skill set make the same as a educated nurse ?

#9 Niner National

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Posted 19 March 2013 - 02:18 PM

That's not really a good way to determine what the minimum wage should be, but I do agree that our minimum wage is embarrassingly low.

In Australia the minimum wage is $16, which is $16.58 in USD. Not the most comparable country to the U.S. for a number of reasons, but still interesting to look at. The high minimum wage hasn't sunk their economy. Their unemployment rate is 5.4% and they have a lower % of people living in poverty than we do.

#10 Proudiddy

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Posted 19 March 2013 - 02:19 PM

Which do you think has more impact on the economy from the ground up?

Raising the minimum wage still keeps the poor people poor. As the price of good rise to the level of the new cost of operation the gap only changes between the elite rich and the now much larger section of working poor.

Cost of operation is arbitrary. I believe it is referenced by those in power to scare people from wanting better for themselves. They would still make profit and a lot of it, just not as much as they did make.

#11 Kurb

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Posted 19 March 2013 - 02:19 PM

There is a real issue with the stagnation of wages vs productivity/hours worked.

$22 might be too high.

My question is what is an hourly living wage?


My question is what defines what a "living" wage is.


How much better off would lower income brackets be if they didn't try to keep up with the Jones's and focused on increasing their skill set, saving money, and avoiding unneeded costs (smart phones, exorbitant cable bills, etc).

Just discussing here, please don't try and spin me as some hater of the poor (a plea to everyone).

#12 Panthro

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Posted 19 March 2013 - 02:21 PM

Does it?

You are paid for what you are worth (usually).

Walmart guy is making walmart money for a reason (again usually).
Welder guy is making his rate for a reason.
Banker guy is making his wage for a reason (this is one of the more corrupt examples).



In my perfect world system, the cream would rise to the top. A highly skilled worker would be in demand, thus companies would compete for his work and he would make a higher wage, gaining himself capital and perhaps giving him the chance to start his one.

Making the minimum wage would hurt more than help IMO.

I would much rather invest in programs to bring people up in employment, across the board, than pay unskilled workers the same thing a Nurse with a 2 year degree starts off making at New Hanover Hospital. Should full time janitor with no education or cultured skill set make the same as a educated nurse ?

using welders example...
as productivity increases less welders are needed. I produce more and my worth increases but my wages stay stagnate due to the less welders needed. The company can actually stagnate, lower my salary, and increase my hours because of increased productivity.

And don't tell me corporations are magnanimous. lol

#13 Kurb

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Posted 19 March 2013 - 02:22 PM

Cost of operation is arbitrary. I believe it is referenced by those in power to scare people from wanting better for themselves. They would still make profit and a lot of it, just not as much as they did make.



That's easy to say when you aren't running the cooperation.


You make hammers.
Every hammer costs 5 dollars to make while the wage is 10$ per hour. 3 of those 5 dollars are wage costs. You sell the hammer for 10$ making 5

Government doubles min wage to 20$ per hour. Now your cost of hammers is 8$ and you are only making 2$ per hammer. You have lost over half of your profit.

Do you shrug your shoulders and say, welp thats tough on me, I will just deal.

Or do you sell your hammer for 13$ and keep making that 5$ per?





I would contract with the Government and sell the hammers for 100$ each, but I'm a dick like that.

#14 Kurb

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Posted 19 March 2013 - 02:26 PM

using welders example...
as productivity increases less welders are needed. I produce more and my worth increases but my wages stay stagnate due to the less welders needed. The company can actually stagnate, lower my salary, and increase my hours because of increased productivity.

And don't tell me corporations are magnanimous. lol



Oh I admit such is an issue. The ideal thing would to have reached a high level of your craft so you are in demand at the plant/site/job that NEEDS you and will pay you better than the last.

I don't know how that applies to min wage tho...

#15 Proudiddy

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Posted 19 March 2013 - 02:26 PM

Does it?

You are paid for what you are worth (usually).

Walmart guy is making walmart money for a reason (again usually).
Welder guy is making his rate for a reason.
Banker guy is making his wage for a reason (this is one of the more corrupt examples).



In my perfect world system, the cream would rise to the top. A highly skilled worker would be in demand, thus companies would compete for his work and he would make a higher wage, gaining himself capital and perhaps giving him the chance to start his one.

Making the minimum wage would hurt more than help IMO.

I would much rather invest in programs to bring people up in employment, across the board, than pay unskilled workers the same thing a Nurse with a 2 year degree starts off making at New Hanover Hospital. Should full time janitor with no education or cultured skill set make the same as a educated nurse ?

It's hard to argue against unless, like I previously suggested, you increase ALL wages from the bottom up, which I think is still justified due to the current wealth distribution... BUT, when we get into that discussion we're infringing on the 'Mericun way.

Regardless, as I've explained in my own situation, there are far too many cases where there are college-educated "culturally skilled" and even specifically skilled laborers who are being vastly underemployed and/or underpaid. The system needs an enema.


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