Minimum wage - I was wrong

[danielost]

I have stated for twenty years that the only group that benefits from a minimum wage increase was the polotician. But, the another group benefits. The rich business owners/stock holders of those large corporaperations. Consumers expect them to raise prices which they. Doesn't matter if they get hit by the wage or tax or not.

[Beany]

Yes, let's keep those wages low for those folks so they can continue to qualify for and receive cash aid, food stamps, medical benefits, and low cost housing, and and the LIHEAP program. After all, could there be a better use of tax payer money then to subsidize the corporate work force and keep the happy in happy meals?

[danielost]

Let's force those wages up and up and up, so we can add more people to those help programs. Everytime minimum wage goes up so does poverty levels. You you make it cost or appear to cost more, the cost of living goes up.

[Agent0range]

This is probably the first time I have ever agreed with daniel. You raise the minimum wage, prices on everything goes up. If I am making 50K a year, suddenly, my 50K can only buy 40K of the same goods I bought the year before. My money is now worth $10K less. And for what? To save the $432 of my taxes that goes to food stamps and welfare?

[keithisco]

This is probably the first time I have ever agreed with daniel. You raise the minimum wage, prices on everything goes up. If I am making 50K a year, suddenly, my 50K can only buy 40K of the same goods I bought the year before. My money is now worth $10K less. And for what? To save the $432 of my taxes that goes to food stamps and welfare?

So let me get this right...you are saying that if the minimum wage is increased (no figures have been given for the supposed increase) your purchasing power will DECREASE by 20%, which of course will mean that personal demand (based on your purchasing preferences) for the products will decrease proportionately. This mean, in accordance with good old keynsian philosophy, that demand for the products you would otherwise have bought, will also decrease, but supply will be at the same level. This would lead to an oversupply in the Market of said goods and therefore a REDUCTION in the price of the goods you want to buy. No overall disadvantage to yourself.

To extrapolate further: The assumption made by Danielost is that any increase in Minimum wage will cause a hike in prices of the goods that you buy - the reality I suspect is that any increase in minimum wage will take a lot of people out of the Welfare system (and its benefits) and the additional money that they have will actually be spent on buying those goods that were provided free by the State prior to any increase.

The upshot of this is that Demand will not increase, but the source of revenue for the Suppliers will change, and that their overheads (not having to recuperate from the State) will actually reduce.

I stand ready to be corrected on this...

Edited October 17, 2013 by keithisco

[Agent0range]

So let me get this right...you are saying that if the minimum wage is increased (no figures have been given for the supposed increase) your purchasing power will DECREASE by 20%, which of course will mean that personal demand (based on your purchasing preferences) for the products will decrease proportionately. This mean, in accordance with good old keynsian polcy, that demand for the products you would otherwise have bought, will also decrease, but supply will be at the same level. This would lead to an oversupply in the Market of said goods and therefore a REDUCTION in the price of the goods you want to buy. No overall disadvantage to yourself.

To extrapolate further: The assumption made by Danielost is that any increase in Minimum wage will cause a hike in prices of the goods that you buy - the reality I suspect is that any increase in minimum wage will take a lot of people out of the Welfare system (and its benefits) and the additional money that they have will actually be spent on buying those goods that were provided free by the State prior to any increase.

The upshot of this is that Demand will not increase, but the source of revenue for the Suppliers will change, and that their overheads (not having to recuperate from the State) will actually reduce.

I stand ready to be corrected on this...

First of all, my numbers were just thrown out there. Second of all, you think raising minimum wage will make people have MORE money? That is not the case...they will have the same amount of money, just more EARNED money. A $400 paycheck and a $300 welfare check is not less moeny than a $700 paycheck...

[questionmark]

First of all, my numbers were just thrown out there. Second of all, you think raising minimum wage will make people have MORE money? That is not the case...they will have the same amount of money, just more EARNED money. A $400 paycheck and a $300 welfare check is not less moeny than a $700 paycheck...

The problem is not that they will get more money, the problem is that they are getting less money due to inflation that has already happened without them getting a raise.

[Sir Wearer of Hats]

It must be why Australia is such a pverty stricken wasteland then, what with our minimum wage being almost double of yours.

[Heru]

It must be why Australia is such a pverty stricken wasteland then, what with our minimum wage being almost double of yours.

Dont you guys pay more in taxes like most Europeans.

And what is the Australian dollar vs American dollar in the global market? How much do you import? How many Citizens do you have? What is the average cost of living for a family of four? And what is your main export...tourism??

There are many factors to look at instead of the good ole lets throw money at it. It works for my tiny island that has issues different from your large union of states so what works for us should work for you .....right? ........uh no.