Just wondering what everyone's thoughts are concerning the likely increase in federal minimum wage we will see from the newly elected congress. How high do you think they will try to raise it to? If you think an increase is a good thing, what do you think the ideal increase is? I have heard an increase to $7/hr is possible. I'm not sure it's a very good idea except from a political standpoint. No doubt an increase will be popular and help most that are involved in passing an increase get reelected.

__________________
"Some years ago I had a sobering realization about women, which was that there are just too many nice ones. One simply can't fall in love with, sleep with, or marry all the nice women...One of the saddening facts of life is that there is always going to be a delightful woman somewhere who, for whatever accident of timing or attraction, simply slips by and recedes to return only in a dream."
-Larry McMurtry in Roads

Here in ohio we just raised it to $6.85.

__________________
"Jesus said: I have cast fire upon the world, and behold I guard it until it is ablaze."
Gospel of Thomas

It was just raised here, too...Close to $7/hr don't recall exactly. Personally, I feel that raising minimum will do nothing but drive inflation up. Therefore, being a detriment to anyone who makes any amount of money above the minimum wage. Higher wages mean more overhead mean less employees and higher prices (yes I have been in business). I already think the typical greaseburger meal is an utter rip off (esp when considering the quality of food at a typical fast food joint).

POOR CHOICE!!

Anyways off my soap box...

__________________
"Bring the boys back home!"--Pink Floyd

NFA JJG 42-95

Free People/Free Markets

Following the Path of the Beam

Any introductory textbook in economics can explain what the problem is with having a minimum wage. Imagine for a moment you had a "minimum rent" for example. It destabilizes markets which creates inefficiency which brings total welfare/utility of the system down.

As usual, this isn't good economics, its good politics.

Most states minimum wage is already higher than the fed level. It's about time the fed caught up with reality. Democrats will do that. So far the only bill Bush vetoed was the one to save lives, stem cell research. Will minumum wage be the second bill?

But will it really help economically in the long run ?

If we take it to an extreme example/analogy, what would happen if the govt. gave everyone a million dollars every year ?

Print print print that paper that's backed by nothing

You need to have a closed market for it to work though.

For example, what if foreigners could build 'illegal' rental units that charge a fraction of what domestic rental units would charge because they don't have to pay taxes like the domestic ones do.

The domestic unit price would have to either decrease to match the competition or close and declare bankruptcy because it can't compete, costing the taxpayers money.

__________________
Two-thirds of the world's lawyers practice in the US

I've been around since "Buy American" meant "Made in the USA".

On the right hand an increase in the fed min wage sounds like a very good idea but on the left hand it will increase other prices. Items in the stores will go up because of the increased cost of goods.

The fed increase will do nothing for the self employed worker..

Raising minimium wage only hurts the very people it is supposed to help. It will force companies to lay off individuals and provide more part-time positions [which means no benefits]. On top of this, any additional expenses that are accumulated will be passed on to the consumer.

__________________
"I miss the days when they made toys that could kill a kid."
- Jerry Seinfeld

Passing the Minimum Wage Increase is a no-brainer, the only way the Republicans could stop it last time was to tie it to Estate Tax Repeal.
This time it will be out there on it's own and half the Republicans will vote for it.
And if Bush vetoes it, that's just another nail in the GOP coffin, because this is a social justice issue, and a veto will pry social justice voters that have been lured away from the Democratic party by wedge issues, back to the party that cares for the poor, because "caring for the poor" is huge for the evangelicals and Catholics, without whose votes there is no hope of a GOP majority.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

What's happening in those states that have increased the minimum wage on their own? What are their economies like?

The raise in the federal minimum wage being talked about is $2.10 - raising the minimum wage to $7.25.

The Economic Policy Institute has a factsheet on the minimum wage - see: Minimum Wage - Facts at a Glance:

I think that raising the minimum wage will be one of the first bills out of Congress, with support from Republicans, and Bush will sign it.

__________________
Curly

The people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.

- Hermann Goering

Minimum wages don't result in unemployment. Companies hire workers to the point where the marginal cost equals the marginal benefit (maximum profit), not were the marginal benefit equals the cost (maximum revenue).

Because of this Minimum wages only flatten the marginal cost curve, instead raising the number of people who will be hired.

Minimum wage has a negligible effect on inflation.

Applying an incorrect usage of economics merely muddles the situation.

No, I don't think will help in the long run. I said I don't think it is a good idea except from a political standpoint...meaning it will help people get reelected. On the other hand, it will probably politically hurt anyone that opposes it.

Also, for people that think it should be raised, what should it be raised to?

__________________
"Some years ago I had a sobering realization about women, which was that there are just too many nice ones. One simply can't fall in love with, sleep with, or marry all the nice women...One of the saddening facts of life is that there is always going to be a delightful woman somewhere who, for whatever accident of timing or attraction, simply slips by and recedes to return only in a dream."
-Larry McMurtry in Roads

Why not leave it up to the states? I see no reason it needs to be mandated at the national level.

__________________
"Some years ago I had a sobering realization about women, which was that there are just too many nice ones. One simply can't fall in love with, sleep with, or marry all the nice women...One of the saddening facts of life is that there is always going to be a delightful woman somewhere who, for whatever accident of timing or attraction, simply slips by and recedes to return only in a dream."
-Larry McMurtry in Roads

[quote=Thematic-Device;849117]Minimum wages don't result in unemployment. Companies hire workers to the point where the marginal cost equals the marginal benefit (maximum profit), not were the marginal benefit equals the cost (maximum revenue).

You have the right idea here, but you aren't 100% correct. The particular market a firm is in determines at what cost it produces. It is true that firms maximize profits where marginal revenue (MR) equals marginal cost (MC). However, in perfectly competitive markets both buyers and sellers are price takers. Therefore MC equals price (P) (which also equals MR). Obviously, this will change in monopolies, oligopolies, cartels, etc. Then again, this entire idea takes into account ecomomic profit, which includes implicit costs (ie opportunity cost). I think what most of us define as profit is accounting profit, which involves explicit factors only.

The bottom line is this (and it was mentioned earlier): higher wages mean higher costs, less profit, or less workers. Usually, businesses don't opt to cut jobs (they do sometimes, though). They hate to lose profits as well. So, if these two are held constant by the businesses, the extra cost must be recovered. This is where you and I come in. We will pay more. This is assuming that businesses don't cut costs elsewhere (enegry, operating expenses, etc., which is highly unlikely) Keep in mind this doesn't necessarily mean much more (could just be pennies on the dollar), but it will be more.

I am against the minimum wage increase. This is mainly because of my own personal beliefs of individual freedom. We should all have the freedom (and the responsibility, mind you) to negociate our own working wages with employers. I also see this as a way of the government making itself some extra money. Increase in wages means increase in tax revenue. Increase in tax revenue means increase in either government spening or an attempt to balance the budget faster. My "gut feeling" tells me that it's not the latter. In addition to these reasons, I am against the minimum wage increase simply because states can do this themselves. A couple of you have already mentioned this earlier.

__________________
"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