What I just can't understand is how can somebody be so un-resourceful that they can't find a job that pays above minimum wage. There are many, many jobs that require no skills whatsoever, yet still pay above minimum wage.

Minimum wage shouldn't be necesary. If you don't want to work for a wage that low, find another job that pays higher. Are people really too stupid to do that?

Most people would just like the government to tell them what to do, how to do it and when to do it.

The Government of today is not By The People For The People rather it is For The Government By The Government.

In short People are much like sheep!!

Both of you (AKDiesel and mpd8488) bring up good points. Both of them go with what I am saying about individual freedom. There are endless reasons why people take minimum wage jobs, but the important issue is that these people AGREED to work for minimum wage. This, in my opinion, is why there should be no complaints about the fact that minimum wage jobs are "below a living wage". It would seem feasible and logical (at least to me) to sign up for a job that pays enough to live on. I'm going to leave it at that given this particular forum's subject matter. Believe me when I say this that I could jump on a particularly large soap box talking about Americans' dependency on its government.

__________________
"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen."
-Samuel Adams

Ahh but can you really assume that the firms face no increasing costs with labor? That additional units of labor will all cost the same. I think not. The more people a firm wants to hire the more money they will need to offer to lure workers away from their current jobs.

There are a number of reasons for this, from simple friction, that a minimal increase won't lure people away, to uncertainty, a lack of information, but the end result is that labor isn't a market like corn, or oil, the products are differentiated, and price certainly does change when it comes to attracting new workers.

Which means that companies face increasing costs, and due to the fact that workers are not homogenous, they will also face decreasing returns. Therefore labor is hired at where MR=MC barring a massive recession, and it seems to me that we should plan, in general, our economic policy towards what happens equilibrium, rather then what happens towards recession, barring policy designed directly to rectify recession (over growth, or stagflation for that matter)

Not really, this money comes from somewhere, and if it does truly manifest itself in a very negligible increase in wages (or more likely a negligible increase in other segments of the workforces wages/dividends w/i the firm). From the simple fact of the matter, the moeny will have to come from people in higher tax brackets, thus decreasing the money the government receives (ignoring

Of course I can't assume that firms do not face increasing costs in labor. But this minimum wage increase will effectively raise average total cost. Price - ATC = profit. And it seems to me that you are more than smart enough to see where I'm going with this. Agree or disagree?

__________________
"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen."
-Samuel Adams

Most here have never been in business for them selfs.

A few might have had an Econ class in college but that would be it.

Most only know what the weekend news shows tell them.

Cost of living going up every few years? just ask some one that is in a Union. Every few years they are asking for more because the cost of living has gone up. And why has the cost of living gone up?


clue


wages.

It will raise the ATC in that it will flatten the MC curve for certain parts of their labor.

It will decrease the profit margins, but the point of profitability will have higher wages and more labor. And this is supported by the research cited earlier by Curly.

For example consider this company



downloadable version http://myweb.dal.ca/nc931164/mcmrexample.xls
(finally fixed)

Just using abstract numbers, and assuming both decreasing returns and increasing costs (pretty standard assumptions), and assuming that the factory can't keep the wages they're paying everyone a secret (i.e. worker 1 can't be paid 50 while worker 4 is paid 125 because eventually the workers will catch on and demand equal wages)

You can see that without a minimum wage there is an equilibrium of 7 workers, and a wage of 200 (or 6 and 175, same profit). But if there is a minimum wage of 225, instead the equilibrium is at 8 workers.

We want at around a 3% inflation because it motivates investment, but we also want wages to keep up with it.

I see where and what you are arguing, Thematic. The problem is this: you cannot deny the fact that costs to the company are increasing with a minimum wage increase (unless the workers are already paid above the proposed minimum wage). What you are effectively arguing is the wages at two different points. What I am arguing is the increase in cost from one point to another. In other words, we are at point A, and the government is moving us to point B (everyone gets a raise at once). There is no way that you can argue that an increase in wages will not affect a given firm and add to its costs. Here is a pretty non-biased link I found. It reviews both sides of the coin. As you will see, even proponents admit that there are extra costs involved. As I mentioned earlier, firms have to increase cost or cut jobs to make up the difference. Anyway, here's the link. I hope you find it helpful as to what I'm trying to tell you.

http://www.bos.frb.org/economic/nepp...006/rr0601.pdf

__________________
"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen."
-Samuel Adams

Let us do away with the worker earning the pay raise.......... just let the feds pass a law increasing the pay increase every few years.

If the worker is not getting a pay raise then the worker should be looking for other work.. I did that years ago when I was working 2-3 part time jobs while looking for a full time that paid a good wage...... when I found the good wage I stoped the part time work... it is called personal responiblity.

Minimum wages are apparently deemed to be necessary to protect the poor young sports stars.

I believe it is $300,000 for baseball, $100,000 for hockey...

Such minimum wages hardly damage the financial health of these corporate enterprises...

I'm not denying that it will increase costs for the company. It will cut into profits (accounting rather then economic), in my example it clearly shows that, but it does not result in unemployment. Further, the few firms which operate so close to bankruptcy that they cannot handle an the size of increase that is usually being talked about, are probably going to be put out of business regardless. But if you are to look at the ATC curve, it is not readily done, since its shape will change rather then simply having it move up or down.



As for the article I'd say it its flawed in that the evidence it cites is almost entirely predictions. And the few cases it does cite tend to be poor cases to prove ones point.

for example

Not only are their predictions are inconsistent with reality, and a survey of economists estimates is hardly empirical evidence.

cited earlier http://www.epi.org/content.cfm/issue...e_minwagefacts

The above citations are consistent with my experience (and studies I can cite less readily)

Further, offering as an example that New Hampshire had higher growth in leisure/hospitality and retail then Massachussets does little to establish that the minimum wage was the cause. Correlation wasn't even established much less causality. Other studies cited, such as the Dept. of Agriculture's, that a 17% increase in minimum wage would result in a 2% increase in wages (assuming all costs are passed on to the consumer) fails to also consider, that when applying a study of agriculture to massachussets that not all sectors which employ minimum wage laborers employ them to the degree that agriculture does. And while such a study may be a good example of the uppermost bound, it should not be expected to be the norm. Something the article imo fails to discuss.

On the whole for reasons like this i find the article, uncompelling.

And those "minimum wages" are set by the MARKET (government has NOTHING to do with it)

I think Republicans should show the courage of their convictions and bid up the minimum wage to a point where the democrats either balk at it, or if implemented will make the negative aspects of the minimum wage readily apparent, and then when all the unemployed want it revoked, stand firm and pledge to either keep it high, or eliminate it all together.

It's called FREEDOM. Why should the government have any right to tell a person that they may not enter into a mutually beneficial and agreed upon contract for otherwise legal work.

__________________
"It's a good feeling to shoot a bad guy. Something you democrats would never understand. Americans are homesteaders, we want a safe home, keep the money we make, and shoot bad guys!"

----Denny Crane

Ok, Thematic. I must apologize then because this whole time I thought you were arguing over costs, not the effect on emplyment, but you were actually doing the opposite. My apologies. I would therefore agree with you for the most part. I would have to say, though, that a chance does exist that labor would be cut (on a small scale) to recover these extra costs. However, this would be on a business-to-business basis. I would also question the integrity of any companies or businesses that cut labor because of this increase. The main method of recovering these extra costs will be through price increases. I'll say it again, no minimum wage increases.

__________________
"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen."
-Samuel Adams

As for social value of minimum wages, suffice it to say the USA has the lowest minimum wage in the western world and the most relative poverty and the most poverty amongst the working poor.

Do you think there might be a connection here? Nah... just a coincidence I'm sure.

Many of those other western countries, with their high minimum wages seem to be out-competing the USA in the US domestic market. I wonder how they do that if even half of what anti-minimum wage people say is true?