Beyond Raising the Minimum Wage

By Claire Goldstene

In the ongoing struggle for worker justice, we may need a little 19th century wisdom.

Tired of waiting for Congress to act, campaigns to raise the minimum wage are enjoying success in states and municipalities across the country. From Seattle, San Francisco, and Oakland to South Dakota, Nebraska and Arkansas, these efforts seek to remedy the severe economic inequality that currently plagues the country.

Interestingly, echoes of the 19th century can be heard among today’s proponents of raising the minimum wage. For instance, Ira Steward, a prominent labor organizer who advocated the 8-hour workday, used many of the same arguments of today’s minimum wage campaigns. But Steward also reminds us about what’s really at stake in struggles to improve living standards for millions of workers.

Steward, in his capacity as Secretary of the Boston Labor Reform Association, published a paper in 1865, in which he proposed to shorten the standard workday from 10 hours to eight, with no reduction in pay. He presented this scenario as beneficial to workers, capitalists, and consumers by identifying their common interest in a more productive and robust economy. Greater leisure afforded by shorter hours, Steward maintained, would cultivate greater consumer desire among workers, and the higher wages would allow them to indulge these wants. This, in turn, would aid capitalists by spurring the demand for the products they produced. Thus, Steward contended, reduced hours with no loss of pay was sound economic policy.

This is not substantially different from the claim made today that increased income for low-wage workers, in the form of a higher minimum wage, will stimulate economic growth through greater consumer spending, particularly when that spending drives 70 percent of American economic activity. The current federal minimum wage, which prevails in over half of the states in the country, was set in 2009 and stands at $7.25 an hour ($15,000 annually for a full-time worker), while the federal minimum wage for tipped workers has languished at $2.13 per hour since 1991 (though in 19 states it is higher). Neither of these has kept pace with rising costs of living. Between 1979 and 2012, the lowest-income 20 percent of American families saw a decrease in real income of 12.1 percent, while income for the top 5 percent of American families rose 74.9 percent during that same period.

Steward, writing in the context of an economy dominated by industrial activity, expected that increased consumer demand would prompt technological innovations likely to reduce the costs of production, savings that could offset the higher wages paid to workers. Similarly, research today indicates that higher hourly wages can save employers money over time through improved worker productivity and reduced expenses related to the costs of employee turnover and training.

What is missing in today’s minimum wage campaigns is Steward’s broader vision of the value of leisure and his insistence that, collectively, workers held the power to achieve this vision. Steward argued that by participating more fully in the consumption of goods, workers would generate sufficient demand to justify the increased pay and shorter hours that made consumption possible. At a time when the realities of hourly work for many meant diminished independence through the regimentation and deskilling of labor by machines, this idea held particular appeal. So, as much as Steward’s argument for reduced hours and higher pay was centered on improving immediate material conditions for workers, he also sought to grant a measure of power to workers in their working and non-working lives.

Steward implicitly made a case for the value of leisure—not merely as more time to consume but, importantly, as time during which people had a greater opportunity to realize their own potential. For Steward, all workers should have time to think about matters unrelated to meeting their basic needs and to more fully enjoy their lives outside of work.

In fact, Steward’s primary concern was the capacity of the regime of industrial wage labor to dehumanize people and fundamentally narrow the scope of their life experience to a cycle of work, food, rest, and work again. The stress of constant financial worry and the physical exhaustion of industrial labor for meager wages inhibited people’s intellectual growth and their ability to participate in civic life. In this way, they were less than full members of society. Thus, Steward presented not only a progressive economic perspective, but a fundamentally progressive view of a more human existence for greater numbers of people.

Today, the richest .001 percent of Americans hold over 11 percent of the nation’s wealth; an increasing number of minimum wage workers are adults, not teenagers; and the U.S. Bureau of Labor Statistics projects that the largest sector of job growth over the next decade will be in low-wage occupations such as food preparation and service, retail salesperson, office clerk, and home health aide (where the median age is 40).

The problem with these jobs is more than just low wages and poor working conditions. Just as in the 19th century, workers who spend their lives in these jobs are in a cycle of work, food, rest, and work again. In the ongoing struggle for worker justice, perhaps we ought to resurrect Steward’s 19th-century vision of a more civic-minded, pleasurable, and humane existence for all working people.

Claire Goldstene has taught United States history at the University of Maryland, the University of North Florida, and American University.  She is the author of The Struggle for America’s Promise: Equal Opportunity at the Dawn of Corporate Capital (2014). –

About The Author

Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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89 thoughts on “Beyond Raising the Minimum Wage”

  1. South of Davis

    Claire wrote:

    > Today, the richest .001 percent of Americans hold over 11

    > percent of the nation’s wealth; an increasing number of minimum

    > wage workers are adults, not teenagers

    I agree that this is not a good thing, but the main reason that the rich are getting richer is not the minimum wage, but that the rich control government and year after year (in my lifetime) they have been making it harder and harder for anyone to work for themselves (and compete with the rich owned business) and year after year the number of small business continues to decline in America…

    My first real (20 hour a week) job was when I was 14 (working after school M-F and all day Saturday) paid $3/hour (a little more than the minimum wage at the time).  The big difference was that unlike today where most minimum wage kids work “for” a kid a few years older than them that was making minimum wage last month I worked for an immigrant who came to America, learned to speak English and started his own business.

    The skills I learned in my first job helped me to start my own company as a college freshman and I’ve been starting business ever since.  What I would love to see is a push to make it easier for say a poor person to make money starting a business driving the kids of working parents to gymnastics or inflation adjust the maximum I can pay a guy who wants to paint a shed in my back yard (that the contractors want to keep low).

    1. Frankly

      Bingo.

      Anyone that wants to get a taste of this problem of profoundly difficulty to start and sustain a business only have to try and build or sell a house in Davis.   It is mind blowing and suffocating dealing with all of the codes and rules derived from:

      – Government determination to ensure every possible tax and fee is extracted

      – Environmental extremism

      – Trade unions that have paid off politicians to protect and expand their turf

      – Overkill for safety concerns that is also backed by a tort system that favors contingency-case, sue-happy trial lawyers that also pay off politicians to protect their turf

      Every increase in fees, taxes and regulatory compliance cuts another rung off the ladder that people might use to start and grow a small business.

      And it is all government-caused.  Government destroying free enterprise in ways that the average voter cannot easily understand because it is done incrementally over time.  And then the political left and the left media point at those fewer remaining people that manage to overcome the wall of disincentives to start and grow business as being the source of the problem and deserving of even GREATER taxation and regulator pressure.

      If we want to really correct income equality, we would

      – Make everything right-to-work

      – Reform tax code to incentivize small business starts and growth

      – Reform environmental regulations to a more reasonable level to support more business-types and lower business costs

      – Implement economic policy that assists small business to get started

      – Completely reform our education system to train a stronger workforce, including how to learn trades and to start and grow business.

  2. Tia Will

    Frankly

    And it is all government-caused.”

    I am frequently accused of not accepting reality and promoting a utopian dream. Maybe so. But this statement is equally unrealistic. If people always dealt fairly and equitably with one another, if no one ever attempted to cheat, or cut corners, or unethically sell something that they know has no value to someone they feel is either ignorant, gullible, desperate or all three, there would be no need for government at all.

    While it is true that in my lifetime we will not see my preferred egalitarian society, it is equally true that in my lifetime we will not see a society in which no one ever attempts to profit from someone else’s misfortune. The idea that all businessmen are ethical and will do the best job possible in the least amount of time as efficiently as possible is as utopian as my desire for equal pay for equal time.

    1. South of Davis

      Tia wrote:

      > But this statement is equally unrealistic

      It is not unrealistic to say that the government in protecting the big companies that pay the government bribes (called perfectly legal campaign contributions) make laws to restrict competition for those big firms…

      If I know that a young guy is a good painter and want to pay him $25/hour to paint my garage why does the government require that he is a “painting contractor” before I can pay him more than $500 (unless they want to force him to work for a big campaign donor at $10/hour)?

  3. Topcat

    What is missing in today’s minimum wage campaigns is Steward’s broader vision of the value of leisure and his insistence that, collectively, workers held the power to achieve this vision. Steward argued that by participating more fully in the consumption of goods, workers would generate sufficient demand to justify the increased pay and shorter hours that made consumption possible.

    Another thing that is missing in the minimum wage campaign is any discussion of the harm that raising the minimum wage does to the lowest skilled and most disadvantaged people in society.  We still have many people who can not find work for a variety of reasons. These include people with mild disabilities, poor work habits such as inability to get to work on time and follow directions and people with poor language skills.  They also include people with prior criminal records including those who have been incarcerated and would like to re-integrate into society.  They also include people with drug and alcohol dependency problems that make them unreliable workers.

    In many cases, putting these currently unemployed low skilled people to work in a low skilled, low wage  job would give them a start on a new life where they can improve their skills and become productive members of society.

    I would like to see more discussion from the “Raise the Minimum Wage” crowd about what they see happening to our most disadvantaged citizens if it becomes illegal to employ them at a wage that matches their limited skills and abilities.

  4. Anon

    Today, the richest .001 percent of Americans hold over 11 percent of the nation’s wealth; an increasing number of minimum wage workers are adults, not teenagers; and the U.S. Bureau of Labor Statistics projects that the largest sector of job growth over the next decade will be in low-wage occupations such as food preparation and service, retail salesperson, office clerk, and home health aide (where the median age is 40).”

    I very much doubt that increasing the minimum wage is going to bring more income equality to this country.  The only thing that will come of raising the minimum wage is to force businesses to pass that increased cost on to the customer, and those customers include those making minimum wage!

  5. Tia Will

    Anon

    The only thing that will come of raising the minimum wage is to force businesses to pass that increased cost on to the customer, and those customers include those making minimum wage!”

    This seems to me to represent very simplistic thinking. To say that a proposal that would doubtless have many effects, some positive and some negative, would only have one effect does not do credit to a very complex issue. While some businesses might be “forced” or might choose to pass on the increased costs, other, usually larger businesses could, if they were operating in an ethical manner choose to absorb the increased cost themselves.

    This “will only have one effect” comment totally ignores that with an increased wage, some people may be able to support their families with only one full time job rather than two. Some may be able to spend more time with their children teaching them invaluable skills that they are now forced to neglect since they cannot be at home. It ignores that some workers will be able to make more purchases thus stimulating the economy.

    I have no expertise in economics or business, so I fully acknowledge my limitations in this area. However, I do believe that I have enough life experience to be able to say with confidence that this proposal would have many more than just the one negative effect being portrayed in this comment.

    1. South of Davis

      Tia wrote:

      > larger businesses could, if they were operating in an ethical

      > manner choose to absorb the increased cost themselves.

      As a self employed person paying my own healthcare I have seen the cost increase from under $100 a month (when I was single 15 years ago) to about $2,000 a month (now with a family) today.

      As costs have increased for health care do you know of any “ethical” MDs that have taken pay cuts or “ethical” health care execs that have “absorb the increased cost themselves”?

      A higher minimum wage will mean higher costs for everyone since very few (if any) business will “absorb the increased cost themselves”…

      1. hpierce

        You raise an interesting issue… one of the trends prevalent in the lower-paid employment area is decreasing the hours offered to employees to avoid kicking in ACA obligations.  This trend could (perhaps) be amplified if the minimum wage is increased beyond general inflation.  As someone who has never been paid minimum wage, and always had health coverage (parents or employers), and I’ve never owned a small business, perhaps my next statement is suspect.

        I’d rather call on businesses absorb the costs to ensure their employees have basic medical coverage, not play games with hours provided, than increase the minimum wage beyond inflation and see those employees have reduced hours/lack of medical coverage contributions.  Any increase in minimum wage might, at the end of the day, decrease the total income/net income of those who are supposedly helped by the increase.  Having increased coverage for medical/dental might well be more important than a higher hourly wage.

        Suspect, but don’t know and cannot cite evidence, that the vast majority of folks earning minimum wage are NOT regularly employed for 40 hours/week.  I seem to recall that the trigger for ACA employer requirements is 32 hours/wk.

      2. Tia Will

        As costs have increased for health care do you know of any “ethical” MDs that have taken pay cuts or “ethical” health care execs that have “absorb the increased cost themselves”?”

        Fair question and the answer is “yes”. There was a time in Kaiser when we were given the option of either working the equivalent of an additional day a week for the same amount of pay ( effectively a pay cut) or taking the cut. I took the cut because I valued my time more highly than the money. Most of the docs I worked with made the opposite choice.

         

        1. Barack Palin

          These docs either took the cut or worked the extra day not through any action of their own, it was due to Kaiser cutbacks that they had to make a choice. They didn’t work extra or take pay cuts due to any ethical actions.  I worked for an airline and we took cuts too, not by choice but because they were put on us.  That would be like me then saying I ethically took cuts to keep the price of airline tickets down which was not the case at all.

        2. hpierce

          OK, so if more had chosen the option you did, assuming Kaiser had increased demand for patient care, would that have decreased service levels, or would they hire more staff to meet the demand?  If the latter, can’t see where the cost to the consumer would decrease or might even increase.

  6. Anon

    While some businesses might be “forced” or might choose to pass on the increased costs, other, usually larger businesses could, if they were operating in an ethical manner choose to absorb the increased cost themselves.”

    Please name one business that does not pass its increased costs on to the customer.  Businesses often do not even pass cost savings onto its customers, e.g. oil companies, airlines!  LOL

    1. Tia Will

      Anon

      Please name one business that does not pass its increased costs on to the customer.”

      Please note that I did not say that they did. I only said that they could. Also please note that I am not talking about the small mom and pop type business as Don and I have discussed on various occasions.  Do you deny that this would be a possibility for the very large businesses such as Wal Mart ? I simply do not believe that the very large companies would be forced out of business by paying their workers a living wage. Perhaps you do, in which case we would just have to agree to disagree.

    2. hpierce

      Good point, particularly regarding the concept of ‘ethics’… can a small, family owned business ethically reduce the support of their family to provide additional support to their employees?  Sounds more like charity not beginning at home. Can a publicly traded business ethically tell its stock-holders that they need to have diminished/no dividends, (return on investment) in order to try and ‘solve’ a societal problem?  Absent an increase of productivity, and/or increase in revenue, increased expenses means loss of capital.  One thing if the business has a really high profit margin, quite another if they are operating at a low margin.

      1. Tia Will

        hpierce

        One thing if the business has a really high profit margin, quite another if they are operating at a low margin.”

        Agreed. And this is part of why I believe that this is a very complex issue that cannot be decided on the basis of statements which treat all businesses and all working conditions as the same and having only one potential outcome.

  7. Barack Palin

    increased consumer demand would prompt technological innovations likely to reduce the costs of production, savings that could offset the higher wages paid to workers

    Ha ha, like innovations that would do away with the higher cost minimum wage jobs.  For example, McDonalds going to a computer based ordering system with counter people losing their jobs.

  8. Tia Will

    Alan

    The minimum wage should be eliminated”

    And are you willing to pay more in taxes to support the additional people that will need to rely on more government subsidies ?  If so, I could go for that. I honestly don’t care which mechanism we use to ensure that everyone has the ability to live out of poverty. I just hold that as my standard for a wealthy modern civilization.

    1. South of Davis

       Tia wrote:

      > I honestly don’t care which mechanism we use to ensure that

      > everyone has the ability to live out of poverty.

      The easier we make it for people to “live out of poverty” the more people we will have sitting around smoking pot and watching TV all day.

      I’m all for a system to avoid people sleeping on the streets but I think that letting people live in a dorm where they get up each day and learn job hunting skills (after morning calisthenics) is a better idea then putting them up in an apartment where they can use drugs and watch TV (raising kids who learn how to get a free apartment where they can sit around using drugs and watching TV all day)…

  9. Frankly

    If the goal is really to help more low income workers, instead of increasing the minimum wage which is essentially just another tax on business, we would simply reduce low wage-earner payroll taxes and fund the difference by reducing the size of government, and by reducing the wages and benefits we pay government employees to match the labor market.

    What more people need to understand is that 25-30% of any increase in minimum wage comes back to the government.  Also, labor unions want an increase in the minimum wage because it drives up all wages… and this results in even more tax money to the government.  These are the primary reasons why Democrats tend to support minimum wage hikes.  And you can prove this by their lack of care that it will hurt more of the most vulnerable and reduce the supply of jobs.

    .

    1. Don Shor

      I think that if you actually talk to people who support minimum wage increases, you will find that those are not their motivations. Also, they tend not to believe some of your primary arguments.

      1. Tia Will

        Frankly

        These are the primary reasons why Democrats tend to support minimum wage hikes”

        Now that is interesting because I am a registered Democrat and as Don has pointed out, these are not amongst my motivations at all.

      2. Don Shor

        Specifically:
        They don’t believe it will increase unemployment, and they point to studies that bolster their position.
        They are unaware of the added labor costs that employers have, or unaware of how much they add up to (matching social security and unemployment, workers compensation costs pegged to payroll costs, etc., overall about 30% of the cost of labor).
        They have a particular sub-category of worker in mind: the single parent who is working minimum wage at a large retailer or fast-food chain. That is who they are trying to help.
        They are unaware of the impact the increase would have on many other sub-categories of workers: first-time job seekers, the disabled, and people re-entering the workforce.
        Faced with the reality of the impact on those workers, it is often suggested that we (employers) should prioritize families, or something.
        They think increasing the minimum wage will help the overall economy by giving one category of worker more spending money (that being the point of today’s essay, apparently).
        So it’s a mix of misinformation, conflicting economic data, and values that you’re dealing with. It isn’t some nefarious plan to increase party registration of Democrats or gain government revenues.
        I do think the unions, faced with drastically declining influence, see this as a potent political issue that might help them regain some political clout.

        1. South of Davis

          Don wrote:

          > They don’t believe it will increase unemployment, and they

          > point to studies that bolster their position.

          It is important to point out that all the “studies” that say that an almost 67% ($9-$15) increase in the minimum wage are fake since there is not a single example of a 67% increase in the price of anything that did not result in people buying less of it.  If Don raises the price of pansies by 67% people in Davis will buy less of them just like if we raise the price of a minimum wage employee to $15/hr people in Davis will hire less of them…

        2. Frankly

          Those that don’t believe that raising the minimum wage to the levels suggested will result in fewer jobs are probably the same people that have a lot of crystals in their house and absolutely know that eating quinoa will prevent cancer.

          The non-partisan Congressional Budget Office that the left likes to quote when it supports their worldview…

          A $10.10 hike could lift 900,000 workers out of poverty, but cost 500,000 jobs

          So the federal minimum wage is $7.25.  A raise to $10.10 would be 39%.

          What if we increase the quality of public schools by 39%?  How many might be lifted from poverty from that?

          What if reduced taxes and regulatory excess that prevents economic growth?  How many people would be lifted from poverty with another 1% GDP growth?

          I guess the view from those pushing big minimum wage hikes is that it okay to have more people unemployed if it means they work for less that some wage that is determined “fair”.

          What they don’t note in their utopian pursuits is the destructive individual and social consequences cause by fewer people working.  The human condition is made whole by work.  Without it live is meaningless.  Without it people will pursue meaning in other ways… and many will find negative pursuits.

          We need to create incentives to get people working.  All over the world the biggest unrest is the result of too few people working.

           

      3. South of Davis

        Don wrote:

        > I think that if you actually talk to people who support minimum

        > wage increases, you will find that those are not their motivations. 

        I’ll be careful here not to infer what the motivations of any Vanguard posters are, but I think that it is fair to say that “some” of the SEIU union bosses that will get more money and power if we raise the minimum wage might have “other” motivations just like the cab drivers trying to stop companies like Uber for “safety” reasons and the California Legislators who got money from the Bluetooth manufacturers “before” proposing the hands free law (that resulted in millions for the Bluetooth manufacturers) may have had “other” motivations…

        1. Topcat

          Frankly said: So the federal minimum wage is $7.25.  A raise to $10.10 would be 39%.

          The current minimum wage in California is $9 per hour and it is going to $10 per hour January 1, 2016.

  10. Tia Will

    Don

    They have a particular sub-category of worker in mind: the single parent who is working minimum wage at a large retailer or fast-food chain. That is who they are trying to help.”

    This is true as far as it goes. However, it is not exclusive to this group. There are other groups that I also believe would benefit.

    1. The young person who is without significant family support who is attempting to support themselves and save for an education.

    2. The couple both of whom are having to work multiple jobs because they do not have the skills set yet to make more than the minimum wage whether or not they are supporting children.

    3. An older individual who lost  their  better paying job in the economic down turn and now finds themselves unemployable at a job offering a living wage.

    4. Any one whose finances have been destroyed by an event beyond their control. Say a medical catastrophy that has cost them their job, their emergency fund, their savings, and perhaps their home.

    Many posters who oppose an increase in minimum wage seem to believe that this is the role of families to help out their members in these circumstances. However, this ignores the fact that not everyone has familial support. I would fall into that category. I lived in a state of anxiety until my children became adults because for my “family” sometimes supporting as few as just myself and my two children, sometimes as the primary support of up to six people at a time, I was it. Not such a burden as a gynecologist, but I have known many patients who prayed every day not so much for themselves, but rather because they, on very low wages were the sole support for their family. This is not a one size fits all situation either for the workers or for he business owners and I think that in the conversation, it is critical that both opponents and proponents of minimum wage laws recognize this.

     

    1. Topcat

      Many posters who oppose an increase in minimum wage seem to believe that this is the role of families to help out their members in these circumstances.

      Actually it’s the exact opposite.  Increasing the minimum wage will decrease employment opportunities.  As I have pointed out before, many low skilled and disadvantaged people will find it more difficult or impossible to find employment.  These individuals will have to find other ways to survive than working.  Relying on family assistance is one of the ways that some of these people will use.

  11. Topcat

    The point that seems to keep getting lost in this discussion is that a drastic raise in the minimum wage such as the raise to $15 per hour in Davis (but not the surrounding communities) will hurt the least skilled and most disadvantaged people in society the most.

    Employers facing a drastic increase in the minimum wage will compensate by cutting back the number of people they employ or cutting employee hours.  Some employers may find ways to increase labor saving automation (for example: self check out in stores, voicemail systems instead of live people answering the phone). Some people who might be considering opening new businesses or services may choose not to do so and some employers will find it is no longer economical to do business in Davis and they may just close down.

    Is this really what we want?

  12. Robb Davis

    I think it is important to engage Claire’s central point in this article: do we have a vision for the “ends” of creating a life beyond  “a cycle of work, food, rest, and work again” for low income workers ?  (These are the people who, among other things, clean the offices we work in, maintain our lawns, plant, tend and harvest our food and serve it to us in restaurants)  

    But… further to the minimum wage discussion please see these studies:

    http://www.cbo.gov/sites/default/files/44995-MinimumWage.pdf (see especially Appendix A on methodology and note the adjustments made due to “publication bias”–interesting)

    Check out the review here (A “pro-minimum wage increase” publication but one that, nonetheless, reviews the most recent literature on the topic. Note especially the more recent county to county comparisons and the notion of controlling for regional wage differences that are missing from many studies)

     

    1. Anon

      Federal spending and taxes would also be indirectly affected by the increases in real income for some people and the reduction in real income for others. As a group, workers with increased earnings would pay more in taxes and receive less in federal benefits of certain types than they would have otherwise. However, people who became jobless because of the minimum-wage increase, business owners, and consumers facing higher prices would see a reduction in real income and would collectively pay less in taxes and receive more in federal benefits than they would have otherwise. CBO concludes that the net effect on the federal budget of raising the minimum wage would probably be a small decrease in budget deficits for several years but a small increase in budget deficits there- after. It is unclear whether the effect for the coming decade as a whole would be a small increase or a small decrease in budget deficits.”

      So our own federal gov’t concedes that raising the minimum wage would result in:

      1. A decrease in jobs; and those who are jobless will be getting more in gov’t benefits

      2. Low wage earners would pay more in taxes; receive less in gov’t benefits

      3. In the long run, it is not certain whether raising the minimum wage would result in an increase/decrease in the budget deficit.

      So I am not seeing any upside to increasing the minimum wage.

  13. Frankly

    Wait a dog gone minute.

    We already gave all these low-wage people a raise…

    President Obama’s healthcare law will spend about $2 trillion over the next decade on expanding insurance coverage but still leave 31 million Americans uninsured, according to an analysis from the Congressional Budget Office released on Monday.

    When Obama pitched the healthcare law to Congress, he said it would cost “around $900 billion” over 10 years. But his statement was misleading because the way the law was designed, the major spending provisions didn’t kick in until 2014. This meant that 10-year estimates at the time the law was passed in 2010 were artificially low, because they included four years (2010 through 2013) in which spending was negligible.

    The new CBO analysis finds that between fiscal years 2016 and 2025, spending on the law’s expansion of Medicaid will cost $920 billion and insurance exchange subsidies will cost nearly $1.1 trillion. The major spending provisions, taken together, will total $1.993 trillion.

     

  14. Robb Davis

    Frankly – you failed to provide a source for the editorial comment you posted.  It is from the Washington Examiner.

    Here is exactly how the CBO described this issue from their January 2015 budget outlook Appendix B:

    CBO and JCT have updated their baseline estimates of the budgetary effects of the ACA’s insurance coverage provisions many times since the law was enacted in March 2010. As time has passed, projected costs over the subsequent 10 years have risen because the period spanned by the estimates has changed: Each time the projection period changes, a less expensive early year is replaced by a more expensive later year. But when com- pared year by year, CBO and JCT’s estimates of the net budgetary impact of the ACA’s insurance coverage provisions have decreased, on balance, over the past five years.  

    Please help me understand exactly how the ACA equals an increase in the minimum wage.  Not everyone is covered by medicaid.  Many will go into the exchanges.  Some will purchase an inexpensive plan.  So now they are covered… but they are paying for it.  What is your point exactly?

    Anon – I believe you fail to describe clearly the nuance with which the CBO described the results you highlight.  At least they and the CEPR document are honest about all the caveats related to their studies and conclusions.  It is important to note that the elasticity estimates related to the effects of an increase in the minimum wage on employment include an interval that includes zero–according to the CBO. That means that there is a non-zero probability, based on the best studies that raising the minimum wage will have no effect at all on employment.  You also fail to acknowledge income gains noted in the report.  In the real world, policy choices almost always involve tradeoffs.  A minimum wage increase is no different.

      1. Robb Davis

        I disagree.  I am reading the VERY nuanced analysis provided by the CBO.  Yes, they make statements but they also lay out the methodology and the caveats that must be accounted for in assessing their conclusions. I am also reading the CEPR document that has very useful information on the latest research that controls for critical factors like regional income disparities.

    1. Frankly

      Does not “ACA” stand for “affordable health care”?   We are absorbing $2 trillion more deficit spending and greater taxation of “rich” people so that health care is more affordable to lower income people.  Lower income people are minimum wage people. right?  So we have lowered the cost of their healthcare and in effect have increased their disposable income… in effect increasing the value of their minimum wage.

      1. Robb Davis

        Key word: more affordable.  When you go from NO healthcare, to SOME healthcare your costs do go up.  Come on man, do you know anyone making these kinds of choices?  Seriously.

  15. South of Davis

    Robb wrote:

    > In the real world, policy choices almost always involve

    > tradeoffs.  A minimum wage increase is no different.

    We all know this and that is why there is a debate on the topic.

    If the people in Davis get to vote on the minimum wage we will see if the people want pay higher prices and have more people out of work so the people making minimum wage who keep their jobs get more money and pay more in Social Security and Medicare to the government.

  16. Robb Davis

    Royal “we” SOD?

    You wrote:

    If the people in Davis get to vote on the minimum wage we will see if the people want pay higher prices and have more people out of work so the people making minimum wage who keep their jobs get more money and pay more in Social Security and Medicare to the government.

    So, you haven’t read the two reports I posted because your statement “more people out of work” is not supported by more recent studies.  I know, it does not fit your narrative but…

    Also, are you suggesting that those keeping their jobs pay a higher SS and medicare tax rate?  Of course they pay “more” because they earn more.  This also means they will be eligible for “more” benefits when they retire.

    1. South of Davis

      Robb:

      If I pay enough I can get a “study” or “report” that says anything.

      As I pointed out earlier in this post:

      “It is important to point out that all the “studies” that say that an almost 67% ($9-$15) increase in the minimum wage are fake since there is not a single example of a 67% increase in the price of anything that did not result in people buying less of it. ”

      Can you give me ANY example of something actually going up in price by even 50% that did not result in people (who had a choice) buying less of it?

      I’m not saying it is wrong to want a $15 (or even $25) minimum wage I’m just saying that it is wrong to think that the “price” of labor is different than the price of anything else and that increasing the price of labor in Davis will not result in less demand for labor in Davis.

    2. Frankly

      The CBO has concluded that a federal increase of the minimum wage to $10.10 would lift 500,000 out of poverty and cost 900,000 jobs.

      The problem with the studies “proving” that raising the minimum wage will not result in job loss, other than being irrational and illogical from a simple business and economic perspective, is that they cannot adequately control for economic factors.  And they also conveniently fail to calculate the rate of discouraged workers and underemployment.   These metrics are part of the REAL unemployment picture.

      I would encourage anyone that doubts that raising the minimum wage results in the loss of jobs to simply go talk to business owners and ask them how they will respond to a requirement that they raise the minimum wage to something like $15 and given it will also put upward pressure on all wages.

      There seems to be a lot of people on the side of increasing minimum wage lacking understanding of business finance and profit margins…. I guess believing a narrative that all business owners have excess income capacity that they should just turn over to their workers.   That is fantasy thinking.

      1. Robb Davis

        Would you read the links rather than the summaries?

        You write:

        The problem with the studies “proving” that raising the minimum wage will not result in job loss, other than being irrational and illogical from a simple business and economic perspective, is that they cannot adequately control for economic factors. 

        Okay, first, they don’t “prove” anything.  They are basically “natural experiments” (some are econometric modeling exercises–you do know how results of such studies are articulate don’t you?).  Irrational and illogical?  Why, do you say that?  Because they do not fit a highly simplified personal model of economic “reality” that you hold to?

        I find the unwillingness to have narratives challenged on this point a bit discouraging.

        1. Robb Davis

          Specifically, your “simple business and economic perspective” seems to not include the reality that there are job-creating multipliers built into increases in wage at the low end of the earning continuum.  I believe there is evidence of strong multiplier effects when wages for the lowest wage earners increase.  Why?  Because they spend a greater proportion of what they earn.  

        2. Frankly

          Robb: I believe there is evidence of strong multiplier effects when wages for the lowest wage earners increase.  Why?  Because they spend a greater proportion of what they earn.

          Money really does not grow on trees; it grows from production of value exchange.  You are talking about increasing the cost of something with no commensurate increase in value.  Therefore something else has to give.

          More costly products and services.

          More businesses on the margins go out of business.

          More business ideas on the margins never start.

          More business that automate to prevent needing to hire over-priced labor.

          Fewer jobs because of the former.

          Business owners with less discretionary income to spend.

          Business owners with less retained earnings to invest back in their business.

          If your point is that putting more discretionary income into a smaller percentage of low-wage workers (because of the resulting job loss) will multiply in the economy as this additional pay becomes a sort of social-economic “investment” in helping to grow a low-wage earner to a medium-wage earner… I am more than dubious about this.  You are basically making the case for tickle-up economics… that sprinkling some more cash extracted from private business onto the workers will give them more to spend and also help them grow into greater economic self-sufficiency that will expand the economy.

          Here is my basic problem with this thinking…

          We already have everything needed for capable people to move to economic self-sufficiency except for the oversupply of low-skilled labor, the under-supply of jobs and our tax and regulatory climate.   The challenge beyond that is “capability”.  And I remain convinced that a minimum wage earner stuck at minimum wage (e.g., not just a young person starting their career and moving up), will remain stuck at minimum wage unless and until he/she develops the motivation and capability to do the things that lead to higher wages.

          Increasing the minimum wage does nothing to address capability.  And in fact it will cause many businesses to kill training programs for cost reasons and because they have raised the hiring requirements commensurate with the new mandated high wages and no longer need to train those entry-level people.

          And raising the minimum wage absolutely does nothing to increase the motivation to pursuit higher wages.   Just the opposite, it will provide a big sigh of relief that resting on one’s laurels is good enough for now.  Maybe that is good enough for some people advocating for the minimum wage hike, but let’s be honest about it.

          And note that employers will also start cutting benefits to make up for the higher wage costs.  This is not going to be a panacea for all these low-wage workers.   Higher performance / productivity requirements… fewer perks and benefits… more competition for a smaller supply of better-paying jobs.

          Like I said, something has to give.

          Lastly, this is a very inefficient way to try and “multiply”.  The average employee will pay 35% of that extra cash in taxes.  The business will pay $1.35 dollars for every dollar in additional wage cost.

          And Matt’s point about social security tax being forced savings.  For most of these low-wage workers, social security will be insolvent by the time they need it.

          Here is what this comes down to…

          I think we simply cannot afford to raise the minimum wage in this city and this state.

          Bureau of Labor Statistics (BLS) data reveal that during 2013, states with minimum wages above $7.25 per hour averaged higher unemployment rates and lower net job growth rates than states with minimum wages at $7.25 per hour.

          Higher minimum wage = lower job growth rate and higher unemployment… and these negative results are exponential for teenage labor.

          It is a terrible idea.  There are much better ways to help fix poverty problems.

    3. Matt Williams

      With respect to Robb’s point about paying more in Social Security Tax, let’s be realistic and honest about what Social Security is. It is “forced savings” and was enacted because substantial portions of the population were not practicing the self discipline necessary to voluntarily save for their retirement. Therefore, if you earn more, you save more … and you get more back in benefits when you reach retirement age. Earn less and you pay less and you get less back.

      1. Robb Davis

        Frankly – It is clear to me that you have not read the literature I linked to, or having read it, you have simply dismissed it because you disagree with its conclusions.  Job losses are NOT the finding of all studies and even the CBO admits that and includes and elasticity of zero in its category of plausible (evidence-based) outcomes.  What I am saying is that more money in poor people’s pockets gets spent and that spreads through the community creating new jobs.  Why do you accept the logic of a multiplier for things such as the innovation parks but treat wage increases for low paid workers (who will spend the money) as a zero sum game.

        Your “model” also includes these amazing tricks that tilt any outcome in favor of your preferred outcome:

        More costly products and services.

        There is evidence that only a portion of costs are passed along after wage increases.  Other drivers (including non-labor input costs) must also be accounted for.

         For most of these low-wage workers, social security will be insolvent by the time they need it.

        Seriously… This is an argument?  So… I am sorry, I just don’t even know what this has to do with this discussion.

        Higher minimum wage = lower job growth rate and higher unemployment… and these negative results are exponential for teenage labor.

        Read the damn studies–many focus on teenage labor.  Where did the “exponential” come from?

        And I remain convinced that a minimum wage earner stuck at minimum wage (e.g., not just a young person starting their career and moving up), will remain stuck at minimum wage unless and until he/she develops the motivation and capability to do the things that lead to higher wages.

        I am so glad you are “convinced” and that you have done a detailed analysis of the motivations of low-skilled workers.  I did not realize you were taking a faith-based approach to this discussion.  (Feels ickily “emotional” to me–not what I would expect from the hyper-rational Frankly)

        And in fact it will cause many businesses to kill training programs

        Evidence?  The authors of the various studies actually have a theory about how costs are absorbed from minimum wage increases. You have this…?  Despite the fact that the CBO and other studies indicate less turnover and less need for training when wages are increased.

        And raising the minimum wage absolutely does nothing to increase the motivation to pursuit higher wages.   Just the opposite, it will provide a big sigh of relief that resting on one’s laurels is good enough for now. 

        Wait… aren’t you the one that argues ad nauseum that one reason we need to cut taxes is because they reduce income of the “producers” who, as a result of lower wages will work and “produce” less?  So, on the other hand, increased wages will not motivate?  I am terribly confused.  Are “poor people” another species subject to different laws of human nature?  How about I say this (I have as much evidence for my statement as you do):

        And raising the minimum wage absolutely provides motivation because instead of having to work multiple jobs, often entailing extensive commuting time, workers can work one job, spend more time with their family and friends and lose the anxiety of not being able to meet the rent and utility bills.  It will open up opportunities for learning, volunteerism and greater community engagement which is good for everyone.

        A final point:

        Bureau of Labor Statistics (BLS) data reveal that during 2013, states with minimum wages above $7.25 per hour averaged higher unemployment rates and lower net job growth rates than states with minimum wages at $7.25 per hour.

        So… what?  Causality?  No. You have no evidence of that because there is none.

        1. Don Shor

          What I am saying is that more money in poor people’s pockets gets spent and that spreads through the community creating new jobs.

          Where does that money come from?

        2. Robb Davis

          It comes from several sources Don but the nature of the multiplier (any multiplier) means it is not a zero sum game.  Prices go up (not the full amount of the wage), efficiencies are sought, training is reduced (but that may not be a problem because retention is higher).

          And that is part of the point: certain costs of doing business go down: recruitment and training tend to  be reduced.  So there are cost reductions as well.

          1. Don Shor

            It comes from several sources Don

            If someone tells me I have to increase my payroll by 30% or so, where do you think I am going to get that money? At the end of the day, will I, the business owner, have more or less money to spend locally?

        3. South of Davis

          Don wrote:

          > Where does that money come from?

          It comes from the pockets of business owners who no longer have it to spend and spread through the community creating new jobs…

          P.S. If I’m wondering if Robb can explain how if I pay the same kid $5 more per hour I will have less training costs…

  17. Robb Davis

    Barak Palin – No I am not.  I doubt the efficacy or wisdom of raising it in a small town like Davis.  I have been consistent in saying that this is a state/national issue.

    I want to add, however, that it strikes me as odd that so many people are opposed to a hike in the minimum wage given the fact that we are in an extremely low inflation  environment that could slide towards deflation at a national level (Europe is already there).  This will lead to economic slowdown and is almost entirely a demand deficit slide.  A generation of low wage increase is finally reaching its logical conclusion in loss of demand for goods and services.  However, a large section of the population will not accept any of the following to stimulate demand:

    1. An increase in the minimum wage (which will, according to the CBO, increase GDP growth)

    2. Any government stimulus, even if targeted at infrastructure improvements

    3. Any effort to decrease the value of the dollar, that takes jobs offshore and creates huge trade imbalances that further dampen demand.

    4. Any evaluation of the minimum wage rates in real dollar terms.

    5. A continuation of basic safety net programs like food stamps (which have been cut) that free up income for other purchases (Apparently some people believe that such programs should all be cut because recipients are lazy, fat and ignorant–funny, I know a good number of recipients of these programs and they seem to all work multiple jobs, scrimp and save for everything, walk, bike and use public transit because they cannot afford a car, and talk frequently about how to stretch their food dollar… but I digress).

    And… back to Claire’s central point in this article: do we have a vision for the “ends” of creating a life beyond  “a cycle of work, food, rest, and work again” for low income workers ?  

    Anyone want to engage that one?  BP, Anon, SOD?

    1. Barack Palin

      “a cycle of work, food, rest, and work again” for low income workers ?  

      Hell, I was a medium income maker as a CSR for a major airline for over 30 years and my life was basically the same routine, work, food, rest then work again.  Should I have demanded CEO pay?  Even at that I’ll bet the CEO would tell you his life was also that same routine.

        1. Frankly

          I think the point here is one of relativity.  Someone always makes more.  Someone always has more free time.  But MOST people work a 40+ hour week with commute time.  So why are we assessing a victim class to some or all of these people?  And if some, then where to draw the line?

          And lastly, are minimum wage increases a hand out, or a hand up.  I think they are more the former and less the latter… and in fact, are a hand down for many.

      1. Frankly

        Bingo.

        Somewhere a weird social justice twitch developed that people need to be saved from toil.   It would be telling to do a survey of background and politics of the people holding this view.   When the hell did people working for a living become a new victim class?

        1. Davis Progressive

          guess the question is how hard, under what conditions and to what end they are working?  if it is merely a matter of people working for a living, then you might be right.  if it’s a matter that people who work hard for a living are not able to earn a livable wage, then perhaps you’re simply ignoring the obvious.

        2. Barack Palin

          Exactly Frankly, I made decent money but still had to work hard, come home tired, eat dinner then go to bed just to get up and do it over again.  Was that someone else’s fault?  Should I have demanded more pay, like maybe what my manager or even my CEO made?  Or if I didn’t like my job or pay maybe I should’ve got more education or skills to get a better income.  I also at one point worked for minimum pay, $2/hour.  I always understood that was an entry job and a start.  I never planned to stay at that job for life, but if I had it was only I who I had to look at for not succeeding.

    2. South of Davis

      Robb wrote:

      > I want to add, however, that it strikes me as odd that so

      > many people are opposed to a hike in the minimum wage

      > given the fact that we are in an extremely low inflation  

      > environment that could slide towards deflation at a national level 

      I know many of the “official” inflation reports show “extremely low inflation” but here in Davis the average home price (according to Zillow) has gone from $431K in 2012 to $560K at the end of last year (over a 30% increase), our grocery bill (especially eggs as Rich pointed out yesterday) is also up about 30% and health care and city services bills (when you add two months) are up over 30%.  I don’t have all the exact numbers (since there are so many add ons) but UC Davis tuition is up close to 30% in the last few years (and there is talk of 5% per increases over the next 5 years).  We don’t eat out as much since the price at just about every restaurant in town has been going up quite a bit over the last 5 years (even coffee at Peet’s).  I don’t have time to find the UC survey link Don has posted many times but I’m guessing that Davis apartment rents have not had “low inflation”.  I’m wondering if Robb can name a few things in Davis that have had “low inflation”?

      1. Robb Davis

        I was talking nationally SOD so I am not sure why you are trying to pin me down to Davis.

        If you saw my response to BP you know I am not pushing for a Davis-only minimum wage increase.

        This is a broader issue and I am not going to make a case about cost inflation in Davis.  The point is, using any inflation measure from the CA CPI, to the core CPI to a national 6-month rolling average broader CPI to the “Billion Prices” project index, national inflation is low and falling.  Though most people would not see that as a problem there are huge disadvantages to very low inflation/deflation as you know.

        1. South of Davis

          Robb wrote:

          > I was talking nationally SOD so I am not sure why you are trying to pin me down to Davis.

          I thought we were talking about raising the minimum wage in Davis, not nationally?

          If I live in Davis and a “Billion” prices are lower or not much higher somewhere else, but I’m paying a higher sales tax, more parcel taxes, higher water bills, higher trash bills and higher costs for a place to live food to eat and my health care why does it matter?

          P.S. For me just about everything I spend money on has gone up in price by a fair amount and while it is true I can get a DVD player (and a lot of other stuff I don’t buy) for less than a few years ago why does this matter?

    3. South of Davis

      Robb wrote:

      > do we have a vision for the “ends” of creating a life beyond

      > “a cycle of work, food, rest, & work again” for low income workers ?

      We (not the Royal We) probably all have a different “vision” for low income workers.  Some in Davis might see the worker getting a job close to their co-op and biking to work every day and going to activist meetings at night while others might see the worker moving to Woodland where he can rent a nice home with a big garage and restore a 1960’s VW Bug at night, while others might see him renting a small room, going to school night school to become a CPA before starting his own company to do pro-bono tax work for non-profits…

    4. South of Davis

      BP Asked:

      > Robb Davis, so are you supporting the $15 Davis minimum wage push?

      And Robb wrote:

      > Barak Palin – No I am not.

      I’m wondering if Robb will let us know if he thinks that a $15 minimum wage is a “good idea”?

      I’m not a “supporter” or “opponent” of the minimum wage, I just think it is a “bad idea for Davis” and I’m hoping that taking the time and effort to post about it might help some other people “on the fence” see that it will not help “most” people and might really hurt quite a few (the charities and non-profits forced to pay more, the people that lose their jobs and the people that need to close their business or move from Davis).

      I’m also wondering if Robb will let us know why he is spending so much time defending the $15 minimum wage and the “studies” that supporters of the increase like.

      1. Robb Davis

        SOD – My comments have nothing to do with the local debate about a $15 minimum wage.  What in my response to BP is not clear to you? An immediate increase to $15 is not a good idea in my view and I think the studies I cited would push for a lower increase with indexing to inflation (perhaps). Is that clear enough for you?

        Why am I spending “so much time?”  Well, first of all, I do think there is evidence that minimum wage increases can be a positive and recent studies by reputable researchers demonstrate what they are.  Real increases in minimum wage are my concern and stagnating wages at the lower end do no one any good.

        Could you help me understand what your concerns is about me “spending so much time?”  Really, what is that about?  I think there is enough evidence to suggest that an increase might actually help solve some of the social challenges that we deal with in this city but I concur that a Davis-only approach is a bad idea (for reasons that opponents have articulated).

        Why would I not want to consider this option?  Did you read what I wrote about secular wage stagnation?  Are you concerned about deflationary pressures?  Do you understand what higher real wages could yield via multipliers?  Have you read any of the studies I provided links to ? Have you considered what a generation of macro-economic policies that drive wages down and drive jobs offshore have meant to many families?

        Like everyone on this site I am wrestling with how to create a better community.  Should I not be doing that?

    5. Topcat

      back to Claire’s central point in this article: do we have a vision for the “ends” of creating a life beyond  “a cycle of work, food, rest, and work again” for low income workers ?

      My vision would be for such a worker to improve their work habits, skills and abilities so that they are able to advance to a higher skilled and higher paying job.

      This may take many forms. For example:

      For a worker with poor work habits it might include learning how to get to work on time, how to follow directions, how to get along with co-workers, and how to communicate effectively in a work environment.

      For a retail worker, it might include improving customer service skills, becoming an expert on the products or services that the organization provides, or becoming good at training other workers.

      For a worker who does physical work or works in the service sector it might include developing ways to improve work processes, improve product quality, and finding ways to improve productivity.

      For someone with poor language or writing skills it could include improving these skills through self study or classes.

      An employee who improves their work habits, skills and abilities becomes much more valuable to an employer. Such an employee has options of moving up to higher paying positions. They are no longer stuck on the bottom rung of the economic ladder.

      1. Tia Will

        Topcat

        And that is nice for the examples that you have chosen to highlight. Now what about the following situations:

        1. The worker who has all of those skills and has not landed a better job due to a downturn in the economy.

        2. The older worker who has been let go and cannot find work in their field regardless of their skill set because of their age.

        3. The worker whose job has been sent overseas not because they cannot do it well but because someone overseas is willing to do it for less.

        It is not hard to come up with various scenarios. This does not help us to resolve the very complex issues that we face because as a society we would prefer to tell ourselves stories about how things “should work” regardless of the reality that is plain to see which is that there simply are not enough jobs that pay a living wage for the number of people in need of them regardless of where you want to point the finger of blame.

        1. Topcat

          Now what about the following situations:

          1. The worker who has all of those skills and has not landed a better job due to a downturn in the economy.

          2. The older worker who has been let go and cannot find work in their field regardless of their skill set because of their age.

          3. The worker whose job has been sent overseas not because they cannot do it well but because someone overseas is willing to do it for less.

          In all of these cases I would suggest that the worker needs to be flexible and creative in finding work.  Historically this has been what people do to overcome hard times.  My grandparents left Europe to escape very difficult economic times and find a better life.  Throughout the history of the United States, people have moved to find work.  In very recent times we have seen the boom in oil production in North Dakota leading to a shortage of workers and the resulting high pay for even low skilled retail and labor jobs.  There are plenty of other examples of new industries that have created tremendous opportunities for people who are willing to take on the challenges.

          As industries and technology changes it is often necessary for people to change career fields.  Sometimes this involves retraining and doing things they never realized they could do.  I’ve known many people in my own life that have made job transitions.  As for older workers not being able to find work, I have seen many older workers who have been able to transition to different jobs and have thrived in the process.  Employers often find the older worker’s work ethic and reliability are a big advantage over younger workers.

  18. KSmith

    “And… back to Claire’s central point in this article: do we have a vision for the “ends” of creating a life beyond “a cycle of work, food, rest, and work again” for low income workers ?”

    No–we really don’t. And judging from some people’s comments, this is not desireable, because if those low-income workers aren’t out doing the work by which the human condition is made whole (to paraphrase one commenter above), they’re just lazy, and will be out causing trouble, getting tats, smoking pot, having Western-society-ending casual sex, and engaging in criminal activities. (Not my opinion, BTW).

    I am of the opinion that the scope/definition of “work” needs to be expanded to include activities other than reporting to a job or making widgets and getting paid for it. What about volunteering? Creating art? Caring for an elderly or disabled person who lives with you, or caring for your own children?

    There are other ways of looking at valuable contributions to society/your community as “work,” even if these contributions do not always generation cold hard cash.

      1. KSmith

        Nope!

        I do work for the university in two different capacities, though, and do some freelance work on the side. Prior to my work for the university, though, I spent quite awhile working in the private sector–both as a minimum-wage worker (fortunately, not for very long), and at higher levels.

        I’m not necessarily for raising the minimum wage to the amount that’s being suggested, but I do feel strongly about non-work (as you appear to be defining it) contributions that people make/can make, and allowing people to have some free time so they don’t feel like they have to constantly be on the hamster wheel of work, eat, rest, work, eat, rest, work, eat, rest, ad infinitum.

        1. Frankly

          The hamster wheel is simply life.  Social Security was enacted with a retirement age of 65 because women tended to live to 67 and the intent was to prevent wives from being destitute after the working husband died.

          Work = life.  Work = good.  Work = human necessity.  Work = satisfies human needs.  Work = a necessary part of the human condition.

          It has always been that way.  It is why you have that marvelous machine that you are posting on.

          I don’t get this new apparent view that working is cause for victim-ology.

          I think the people that are not working are the victims.   And yes, you might decide to you want to do something else.  Fine, then go work on getting to that place.  It is not any societal obligation or goal to provide for people that don’t want to work.  I would argue that it is a terrible idea for a society to start viewing work as a victim condition that demands a remedy.  It is completely unsustainable to pursue that type of utopia.

          Now, there is a point about people being stuck in a job that they don’t like.  I’m down with working on that problem.  Let’s start being eliminating all defined benefit pensions so grumpy government workers are not job-locked and can go do something else.

    1. Topcat

      What about volunteering?

      If it’s illegal to pay someone less than the “Minimum wage” to work, how can we allow someone to work for nothing by volunteering? And what about internships where people also work for less than minimum wage?  Should internships be illegal?

      1. South of Davis

        Topcat wrote:

        > how can we allow someone to work for nothing by volunteering?

        It is very hard to do a lot of volunteer work already and getting harder every day (my nephew is learning about union power as they fight to stop him from doing an Eagle Scout project that the union wants to get paid to do themselves).

        > what about internships where people also work for less than

        > minimum wage?  Should internships be illegal?

        Internships “Where You Do Real Work for Free Are already Illegal”.  It is sad but unless you are a huge company with an “internship program” it is not worth the risk today for most people to offer an official an internship and risk getting sued if the person happens to do any “real” work.

        http://www.newsweek.com/internships-where-you-do-real-work-free-are-illegal-colleges-havent-treated-them-229349

        This is real sad for the next group of kids like me who had poor parents that didn’t graduate from college or have any “country club” connections.  I was able to learn a LOT from many different unpaid internships as I paid my way through college.

        The kids with Dad’s in the Bohemian, PU and Sutter Clubs still work unpaid internships today learning a lot and making even more connections while the poor kids are sitting around hoping the people of Davis vote to increase the minimum wage…

  19. Frankly

    And… back to Claire’s central point in this article: do we have a vision for the “ends” of creating a life beyond  “a cycle of work, food, rest, and work again” for low income workers ?

    I made minimum wage, and then lived paycheck-to-paycheck until I was in my young 30s. Learned a number of skills. Went to night school to earn a degree.  Worked two jobs.  Taught myself how to program.

    You use the term “low income worker” as it is something branded on a person’s forehead never to change.  The picture I get is like Indian’s untouchables that we are compelled to help raise to the next socioeconomic level.

    Minimum wage is an entry-level wage.   People should not be stuck making it into their career unless they are stuck in other places.   Work on getting those other places unstuck if you really want to help them.  Just raising the minimum wage actually does the opposite.   It gives them relief that they is nothing they need to work on to advance.  And they stick at the lower rungs and block those job opportunities for young people needing to access the lower rungs of the prosperity ladder to start their climb.

    I’m not saying to ignore growing income disparity as a real social problem, but that raising minimum wage is like pushing on the wrong end of the rope to dislodge it from the tree.

    1. Robb Davis

      1. To you, is there a meaningful difference between raising real versus nominal minimum wages?

      2. You believe in the multipliers that come with innovation parks; do you believe in the multipliers that work through wage increases?

      3. Your thoughts on a low-demand-induced economic slowdown and how we get out of it?

      1. Frankly

        First, on #3.  Economies are always cyclical.  Always have been, and always will be.   So a low-demand period will be temporary.

        #2… as an example, I have a business that I am working on.  ALL of the raw materials and packaging are produced in China.  All but one used to be produced in the US and Canada.  They stopped being produced in the US and Canada because Chinese labor was cheaper.  Now Chinese labor is less cheaper, and with the added cost of shipping, it is starting to make more economic sense to bring back the manufacturing of some or all of these raw materials.  However, now the production of these raw materials is more automated… requiring skilled workers.  And the technology used for automation also requires more skilled workers.

        We have flooded our country with millions of uneducated low-skilled workers from lax immigration enforcement.

        We have a crappy education system that is not working well enough to crank out a capable workforce.

        Our tax, economic and environmental policies push capital away from investments in business starts and expansions.

        #1 – I don’t believe in a minimum wage.  I think we need market wages and work on keeping the market healthy and competitive and work on educating workers so they advance up to higher-paying jobs and don’t get stuck working in low-wage, low-skill jobs.

        We have too big a supply of low-wage, low-sill workers and not enough jobs and career opportunities for them and your prescription would just exacerbate the problem.

        Frankly (because I am) raising minimum wages to “fix” poverty and income gaps is an unsustainable solution.

        1. wdf1

          Frankly:  We have a crappy education system that is not working well enough to crank out a capable workforce.

          We have an education system that works pretty well, given what it deals with.  But we have had a failing social safety net when it comes to taking care of children.  A child poverty rate in the U.S. that is abysmal compared to other western nations.  By one measure, half of all school kids in the U.S. now come from lower income households.  Blaming it on a “crappy education system” is a way to avoid addressing the root issue of child poverty.

        2. South of Davis

          wdf1 wrote:

          > Blaming it on a “crappy education system” is a way to

          > avoid addressing the root issue of child poverty.

          Kind if like blaming the problem on “poverty” is a way to avoid addressing the root issues of why so many poor kids don’t learn much (before they drop out)…

          > We have an education system that works pretty

          > well, given what it deals with

          Our current “educational system” does a decent job teaching upper middle class kids that are going to college, but since none of the teachers in CA have not gone to college very few are good at relating to guys and girls that might be happier (and make more money than all the teachers) working in a trade like plumbing or HVAC repair.

          When I want to get poor young males to focus on school I will get them to focus on how the skills I mam teaching them will help them to make money down the road.

    1. Topcat

      The minimum wage should be abolished.

      I tend to agree with this, but there is zero chance of the minimum wage being abolished. I think the best we can do is to try to educate people on how economics works.  Most of us who have studied some economics understand the relationship of supply and demand, but unfortunately there are a lot of people who do not understand these basic concepts.

  20. Tia Will

    I have a recommendation for those who do not believe that there should be any minimum wage at all. Make a visit to a sweat shop producing garments for chain stores such as H&M in Cambodia, or if you want to get the same effect, spend a week in Haiti, for a view of what life can look like without a minimum wage.

    Then read a little history about how life was here before those unions that are now so hated  helped lift our lowest paid workers out of those kinds of working conditions. Ask yourself how long it might be before we lapsed back into those conditions without a minimum wage and protective regulations.

    I do not claim to know what the “optimal” minimal wage is. Nor do I know whether I believe that Davis should set a minimum wage that is out of alignment with the surrounding communities or state. What I do know, is that the way the “free market” for employment is “supposed to work” is not how it does work in the real world .

    It may be the case that some people honestly do not care what happens to others in their community or outside their own families. Certainly some recent posts on another thread would suggest that this is a common sentiment. However, I cannot believe that we honestly want a society in which we support and help only those who are already do very well ( subsidies for farmers, bail outs for the rich ) and leave those at the bottom of the economic system to scrape for enough to eat, housing and medical care. I remain convinced that this must not be people’s intent, but it seems to me that there is an unwillingness to admit that this is the consequence of policies that favor a beneficial “free market” that does not exist.

    1. South of Davis

      Tia wrote:

      > I have a recommendation for those who do not believe that

      > there should be any minimum wage at all. Make a visit to a

      > sweat shop producing garments for chain stores such as

      > H&M in Cambodia

      Serious question:

      “Do you really think getting rid of a minimum wage in the US will result in people working for $3 a DAY like in Cambodia?

      http://blogs.ajws.org/blog/2014/01/14/life-on-3-a-day-garment-workers-and-cambodias-struggle-for-human-rights/

      If you don’t think we will have sweat shops in Davis (why would H&M pay kids in Davis $4 a day when the kids in Cambodia can make trendy shirts for $3 a day) why even bring up a corrupt third world country (that has hundreds of bigger problems than lack of a minimum wage)?

    2. Topcat

      I have a recommendation for those who do not believe that there should be any minimum wage at all.

      No worries; there is no chance of the minimum wage going away. In fact, California’s minimum wage is going up to $10 per hour in January next year.  This raise won’t have much effect for us here in Davis because most workers here already make more than the minimum wage.

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