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CBO Report Shows $15 Federal Minimum Wage Would Raise Pay for 27 Million Workers and Lift 1.3 Million Out of Poverty

Lol. So you’re admitting that there will be less job opportunities because there will be fewer companies. And by “reworking their business plans” I hope you don’t forget the age old strategy of replacing human labor with automation…

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Why in the world should the first job (doing barely entry-level, non-skilled work) of a 15-year old have a wage high enough to support a family of three? Are you crazy? Just think about that for a moment. Let’s say I’m an employer. I have an entry-level job that a 15-year old can do. It’s a simple summer job and will help that 15-year old build skills and learn what it’s like to work in the adult workforce. Now I’m told I’ll have to pay him a wage high enough to fully support a family of three. I say the hell with that. I’ll either try to (1) automate the job, (2) only hire someone with significantly more experience that’s overqualified to be commensurate with the pay, or (3) not hire anyone because doing so would be at a loss.

The real world isn’t pretty. There’s no utopia. But you can’t end poverty by fiat. If it was that simple, I’d go to Zimbabwe and told them that they could end poverty tomorrow if they just quadrupled their minimum wage.

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Call me mean spirited. But my solution is to completely eliminate the minimum wage tomorrow. It’s a terrible strategy for reducing poverty and hurts the people it’s most-intended to help.

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Yeah, look around and see that the minimum wage (which is much higher than $7.25/hour in most states) is just making unemployment a terrible problem right now.

Sorry - but your example simply does not apply. The minimum wage laws have an exemption for workers under 20 during their first 90 days of work per year (i.e. summer work of the type you are describing). Of course, that exemption does not apply if the young person is doing the same job that an adult full time worker is doing. There are also different rules for student internships.

Just because the money earned full time might be barely enough to scape by for a family of three, does not mean that is how it would be applied for every individual. For example, fifty years ago I worked summers at a dried fruit packing house and earned the minimum wage of $1.60 per hour. That money paid for the whole year for my tuition and fees and living expenses at U.C. Berkely where I went to school.

I’m not conceding a net job loss, you are. I don’t doubt they’ll be " job churning " in the next decades. Just like there’s been in the last few decades. " Well duh ", as the saying goes.

Just where does “$15/hour” come from? [I know… do you?]
And why do you think that pooh-bahs in WashDC know what the minimum wage should be?

This is a topic that is better left to the states and municipalities, “The laboratories of democracy” as Justice Louis Brandeis put it, to work on. Take it away from WashDC.
(Obvious examples of why this is wrong for WashDC to decide are Puerto Rico and American Samoa, where the wages are much lower than California, or even Mississippi.)

Comments to comments:

Obama did neither of those two things. The COLA is set in law. For recession reasons the Consumer Cost of Living Index (CPI) was very low during Obama’s presidency, and as remarked, for two years it was <= zero%. Be thankful that COLA-s can’t go negative.
- You can complain that the Cost of Living Inflation index is invalid for old folks. You will have to support that complaint with statistics.

Not long ago I read an article explaining where “$15/hour” came from. It was a political decision by the SEIU heads, for political Goldilocks reasons, a round number large enough to be an aspiration, not so large as to cause people to gag.

The availability of workers is independent of the law declared $xx/hour minimum wage. Set it unrealistically enough and you will get people hiring and working under the table at less than that, much like the old 55 mph speed limit.

Reply to Skeptic Tank. The system discourages quoting that person’s whole comment: “Yeah, look around and see that the minimum wage (which is much higher than $7.25/hour in most states) is just making unemployment a terrible problem right now.”
Consider economist Frederic Bastiat’s remark about what is seen and what is not seen. What you are not seeing are all the jobs that might have been created, or retained for a while longer, if not for that minimum wage. Many years ago I saw an article contrasting migrations, Western Europe deluged by East Europeans after the fall of the wall, and Florida deluges by refugees from the Caribbean. Florida, with a comparatively lower legal minimum wage and looser labor laws, was able to handle the deluge better than Western Europe was.

Sounds like Rebel_Farmer hadn’t planned well for retirement. Rebel_Farmer has had to live frugally for the past 12 years and will have to live more frugally going forward. If Rebel_Farmer had lived this frugally for 12 years before retiring, and saved, and tried to retire later, think how much less “against the rock” Rebel_Farmer would be today.
- There is a book by a former New York Times columnist, ‘How to Retire for less than you think’, by Fred Brock.

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In NAFTA negotiations Washington wants Mexico to pay $16 / hour, yet opposes raising wages in US to $15/ hour for US American workers. go figure…

Incomplete statement of facts: See this from the Washington Post, Aug 27 2018.
The U.S.- Mexico trade agreement is just a first step. … auto content must be made by workers earning more than $16 per hour . The average hourly pay for a U.S. autoworker is more than $22 an hour ,

Says nothing about wages paid elsewhere in the Mexican economy.

In any metro area, the prevailing wage is far higher than the current minimum. In my city, there aren’t enough workers willing to stoop to 11 or $12/hour to fill the many, many job postings. As for job openings requiring some basic, but specialized skills, there is a gaping labor shortage.

‘Good’ for your city.

Now, first, in most any economy there are different jobs with different skill levels and different prevailing wages. So it is a bit nonsensical to speak of one value as the prevailing wage of the city. One needs to know what your skills are before asking what is the prevailing wage for those skills in that city.

Second, just curious, does your city have slum neighborhoods of high unemployment and few jobs? If there is a gaping labor shortage, why aren’t the people of those neighborhoods crowding to get those jobs?

A2 –

Greenwich:
At one time – until Obama – COLA’s for Social Security were NOT a joke.
But Obama stopped them for two full years, then put them in hands of GOP.

Obama did neither of those two things. The COLA is set in law. For recession reasons the Consumer Cost of Living Index (CPI) was very low during Obama’s presidency, and as remarked, for two years it was <= zero%. Be thankful that COLA-s can’t go negative.

  • You can complain that the Cost of Living Inflation index is invalid for old folks. You will have to support that complaint with statistics.

Unfortunately Obama did EXACTLY those things.
The COLA may be set in law, but Obama stopped the COLA’s for two full years after taking office.

However, your comment is untrue –
After W-Bush every $1.00 that anyone had was worth .40 cents/.50 cents due to inflation.
And with US/CIA “illegal wars of aggression” inflation has continued to rage…
at times at 6.5%.

Further …

For recession reasons the Consumer Cost of Living Index (CPI) was very low during Obama’s presidency, and as remarked, for two years it was <= zero%. Be thankful that COLA-s can’t go negative.

No one is thankful that the COLA’s went negative after Obama put former Sen. Alan Simpson –
a long time enemy of Social Security – in charge of the COLA’s where they have been reduced
to a pittance – also called “Cat food COLA.”

Don’t know why you missed this, but actually many on Social Security didn’t have any
idea of what had happened.

Ten years later, most moderate Social Security checks would be double what they are
now had the COLA’s system not been betrayed by those looking to cut Social Security
benefits which included Obama. Basically, after 10 years, benefits are now worth HALF
of what they would have been had the COLA’s not been attacked.

There can be no basis for discussion when two people can’t even agree on what happened…

I will add that the same two years the state of Washington did not increase the minimum wage. That is also tied to CPI.

There are certainly minimum wage advocate and social security advocates who would have sued if the withheld increases violated the law. I did not hear of any such lawsuit. I did hear business groups who sued to get the minimum wage reduced, because one year the CPI was negative. The WA Supreme Court ruled against the plaintiffs.

This whole things shows

  1. Why ‘Entitlement’ should be one of the deadly sins.
  2. Why Central Bankers and their courtiers want a positive rate of inflation. Some actually want it in the 6% to 8% range. All part of Keynesian ideas that savings should at some point become worthless.

A2 –

Obviously, you made no effort to research what actually happened –

President Obama Changes His Tune on Social Security – The …
www.fool.com/retirement/2016/06/17/president
But soon after his re-election in 2012, Obama proposed recalculating Social Security COLAs by using the chained Consumer Price Index formula to determine benefits. This new formula was designed to slow the rate of future benefit increases in order to reduce spending. If it were enacted, beneficiaries would surely lose out over time.

The suggestion that this somehow reduces government spending is another lie –
Social Security costs the US government nothing – in fact, the Social Security Fund PAYS
the government 3% for administrating the program.
Obviously Social Security should play no role in the General Budget but it regularly appears
there in order to confuse the public – especially as to the outrageous costs of our MIC/Intelligence
budget.
Additionally, Social Security was designed to be a pay-as-you-go system only raising enough
funds through payroll taxes on employees/employers to cover current retirees.

The fact that Social Security was re-engineered to run SUPLUSSES is simply a sign of the
corruption of our elected officials acting in the interests of Elites to destroy the program.
Since that time, huge amounts have been “borrowed” from the Social Security
Trust Fund in order to pay for wars, tax cuts for the rich and other purposes which only
benefit the wealthy and to destroy the nation’s confidence in the program.

In return, the “borrowings” were covered by the Treasury in issuance of Treasury notes/
securities for the future return of the monies borrowed, with interest.
As is usual for Elites, they’d prefer not to pay up so there is a preference on their part to
do what they’ve done to pensions and that is simply to deny the debt and destroy the programs.

The Minimum Wage is also a victim of corrupt officials where it is now worth about .25
cents LESS than it was worth in the 1950’s. In other words, neither has it been allowed
to reflect costs of inflation.

And, btw, our corrupt government has been lying to the public about the rate of inflation
since at least the Vietnam Era.

Repeating GOP propaganda of “Entitlement” - which is another lie – doesn’t help your
cause in these posts.

And #2 is simply more GOP propaganda –
The current central bank has destroyed the dollar of 1913 when the Federal Reserve
was created – a third attempt at a Central Bank for the benefit of Elites with the prior
two having been overturned (and rightly so!) –
That 1913 dollar has now been reduced to 19 cents (or less) by the Federal Reserve.

Capitalism is an evil which can’t be regulated – it’s basic fascism intended to move
the wealth and natural resources of other nations from the many to the few – and it
has done that successfully all over the world for the benefit of Elites.
It’s also in its exploitations of Nature, Animal-Life, Natural Resources – and even of
other human beings according to various myths of 'inferiority" – created Global Warming.

Citizens create economies which are then manipulated by banks and financial institutions
for the benefit of Elites.

There doesn’t seem to be much that you do “hear about” …

The corruption today is full scale FASCISM by Oligarchy using corporations as fronts.

Obama’s Budget Would Change How Social Security COLAs are …

www.debt.org/blog/obamas-budget-seeks-to-cut

Here’s some quick math: This year the COLA was 1.7 percent. Thus, last year’s monthly Social Security check of $1,250 increased to $1,271.25. If the chained CPI had been used instead to calculate the increase, the percentage would have been 1.4 percent and the amount would have been $1,267.50 – $3.75 less per month and $45 less for the year.
.

Obama’s Budget Preserves COLA for Social Security: What it …

www.wiseradvisor.com/article/obamas-budget

Obama originally sought last year to link Social Security’s COLAs to a more conservative measure of inflation. Currently, Social Security is pegged to a consumer price index known as the CPI-W. It’s a broad measure of merchandise costs, and it’s categorized by a demographic that includes urban wage-earners and clerical workers.

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I’ve heard about the items you cite in the first six paragraphs.

I had heard during the Obama era someone propose using the “chained CPI”. Maybe someone in the Obama administration. I understand that they never did it.

Obama did participate in calling the Simpson-Bowles commission into existence. Alan Simpson was a former Republican Senator from Wyoming. Bowles was a Democrat. The Simpson-Bowles commission took testimony from the public and experts, and wrote a report. Obama and Congress did nothing with it.

So we are back to the fact that the CPI (CPI-W) was used to compute COLA during the Obama administration, GW Bush administration, Clinton administration, G Bush administration, … and came up with <= 0. during two years of the very slow Obama recovery post-2008, and that you don’t believe that those numbers really were 0. those years.

Seniors those years got what the law guaranteed them, an increase to match the increase in cost of living. CPI was <= 0. two of those years, they got nothing. Which was ethically right.

You and several others assert that seniors should have gotten some increase > 0. You say they deserve it, and now you say that prices inflated by >0. those years. (We could have saved a lot of time getting to this point earlier)
- This is why politicians and Central Bankers want positive inflation all the time, so that the politicians can hand out a COLA increase every year.

On a separate column of this whole discussion, my reference to minimum wage was to Washington state’s minimum wage, higher than the Federal minimum wage and increases every year with CPI. Plus whatever additional activists persuade WA voters to add to it in initiatives.

We really should state things more carefully in order to be correct. Today’s $1 USD will buy what 19¢ would buy in 1913. Estimated. Our dollars are worth that much less than dollars were worth in 1913.

a2 –

Why are you so desperate to deny that Obama also betrayed American voters
in destroying Social Security by corrupting the program?

Same method of corruption the right wing has always used - from the top down.

I haven’t seen Obama do anything substantive to “destroy Social Security”.
I expect there isn’t any point in discussing that point of the topic with you anymore.

Instead, I am interested in Social Security’s Marxist “inherent contradictions”, which means it has a date with Herb Stein’s law, “What can not continue, won’t.” It will self-destruct from a flaw built into it in the mid-1930s, and delayed by reforms all these years.

And I am interested in the resulting Cloward-Piven thunderclap. Sort of like happened to the farmer Wang in Pearl S. Buck’s novel ‘The Good Earth’. In the midst of famine the other villagers got the notion into their head that Wang had a secret stash of food. So they invade his cottage and strip it what little food was there and everything of value. As they left Wang’s wife complained out loud to them that now they (Wang’s family) is worse off than all those who had raided Wang’s house. Being a ‘Have’ of anything does one no good when hungry ‘Have-nots’ strip everything like locusts.

a2 –

Corruption of government is the flaw in Social Security and the only flaw.

As I confirmed to you previously, I note that you see very little …
especially that which you don’t want to see.

Corruption/evil will always exist – it is our job to make sure that we continue to do
what good we can in the world and to try to do what we can to control the right wing’s
efforts to destroy everything of beauty in Nature.
Also to try to relive the suffering the right wing brings to the world.

You are correct that no changes in the Social Security law were made during the Obama Administration (except for the minor tweak that prevented some Social Security payments from going to prisoners, current parole violators, and those fleeing prosecution - with retroactive payments made when they get out of prison or resolve their violations).

You are wrong to think that the Law is not perfectly sustainable over the long haul. The simple fix of eliminating the cap on contributions does that (and should have been done as part of the changes made in the 1980’s).

A common statement on the left. Is it true?

A thought experiment: Pres. Obama declared that income > $250,000 was “rich”. The people here on this forum hate anyone who earns in the top 1% of income, more hate the higher the income.
- Let us suppose that the rich “shrug” and stop earning anything above $250,000, and stop doing work that would have earned them above $250,000 in the pre-100% tax era. How long would your fix to FICA taxation, taxing everything earned, sustain it and keep it from going bankrupt?