Minimum wage earners must work 89 hours per week to afford modest apartment
March 17, 2013 at 4:39 am in Alexandria Echo Press
According to a national report released last week, a minimum wage earner in Minnesota would have to work 89 hours per week or hold 2.2 full time jobs — to afford a modest two-bedroom apartment. Of the twelve states in the Midwest, Minnesota has ranked the worst for affordability for minimum wage workers for three consecutive years. Continue Reading
I find it ironic that someone from an organization called JOBS NOW believes that raising the minimum wage is an urgent concern. Raising the minimum wage is a jobs killer.
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Another unsourced study. Here’s one for you. Princess Pelosie says that unemployment compensation is the greatest boost you can get for the economy. Minimum wage was intended for entry level jobs and seasonal jobs. Welfare has eliminated the need for minumum wage jobs and we have to import labor to do the unskilled work that isn’t good enough for our reserve work force. The market will decide labor rates. When you pay people to sit home and have to turn a blind eye to ILLEGAL labor that willingly takes those jobs and send msoney home, it’s hard to say it’s not a living wage. Dry up the surplus labor and the wage rate will adjust to attract employees. Presently, by not enforcing existing law, we have a surplus of labor.
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Well, realist, it’s more than a “chestnut.” It’s Econ 101. Where do you think the money comes from to pay labor?
A business exists to return a profit for its owner. The owner has price competition in a free market economy. He must price his product or service according to the market. When he is suddenly compelled to pay more for labor, what is he going to do? Buy more of it? No, he buys less unless he wants to lose money.
Some may argue that since all businesses are affected similarly by the same minimum wage requirement it will all come out in the wash, because everyone will have to raise prices at the same time. The problem with that argument is that simple economics tells us that raising the price of anything will cause less of it to be sold. It’s basic supply and demand. When the burger place raises its prices, it will sell fewer burgers, even if all the sellers of burgers are doing the same thing. When the number of burgers sold goes down, so does the demand for labor to make the burgers and therein is the reason why an artificial impediment to the free market like the minimum wage kills jobs.
If you don’t believe me, I’d like you to sit down and write the CEO of McDonald’s and ask him or her whether a dime increase in the price of a Big Mac will result in more Big Macs being sold or fewer. Whether it’s burgers or jet aircraft, the principle is the same.
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Another ECON 101 theory: Raising the minimum wage raises the purchasing power of the lower class. Greater purchasing power, greater demand for goods and services.
One needs to realize that the lower and middle classes are the largest purchasing blocks in the nation. By catering to the upper 1% or upper 2%, you are limiting the power of that largest group to help grow the economy. If a companies widgets are selling and with the increased purchasing power of the largest groups leading to more widgets being sold, jobs are created, not lost. But by allowing the upper 1% to 2% to keep pocketing the tax breaks, incentives for businesses, etc., the job base and the economy doesn’t grow. The upper 1% to 2% can only consume so many widgets…..
Hot debate. What do you think?
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But raising minimum wage costs companies more. Where exactly do you think this money is supposed to come from? Thin air? No. It will come from increased prices on goods and services, thus LOWERING the purchasing power of the lower class (and other classes). The solution is not to raise minimum wage, but to get people to stop thinking that it is the same as a living wage. People need to aspire to advancing into better paying jobs, which will actually and effectively raise their purchasing power.
Hot debate. What do you think?
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It sounds, Mr. Beaver, like you attended the Nancy Pelosi School of Economics. I don’t wish to insult you, or “realist,” who thinks I’m from the Stone Age in his hidden comment, or anyone else. May I suggest, however, that you have been misinformed by whomever taught you this tautology at Bemidji State. By your logic, the minimum wage ought to be raised to $50 an hour. That’s a nice thought, but it would be an economic mess.
I can’t explain all of economic price theory in a single post in Area Voices. But I can tell you that society simply can’t manufacture wealth or create prosperity by re-engineering a free market economy. It doesn’t work, no matter how many times politicians or liberal professors tell you it will.
Impediments to free markets, like minimum wage or unions, or for that matter, impediments on the other side like fixing prices for the purchase of labor, make markets inefficient, for the benefit of some but to the overall detriment of most.
America has been the beacon of free market capitalism for over two centuries. That is why we are the most prosperous nation in the world and the reason why so many people want to come here.
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Nobody gets something for nothing unless someone gets nothing for something. Government allows tax subsidies to stimulate production of something they feel is needed. Like housing, energy, more widgets and more than that. In more recent times, we see feral children subsidized and whole industries formed to cater to them. Providing care for them from cradle to grave. No need for them to strive for minimum wage or any wage. Their needs will be met and their singular duty is to convince US that we OWE them a better way of life just for existing. Henry Ford found a need and filled it without the government having to jump start his industry. All the green industries would not exist without tax subsidies and the difference is that government has decided what is necessary vs the marketplace deciding. Those “rich” people didn’t get that way by putting their money in the bank. Their money was working and building business that employed people and put food on the table. Some were hiring crop pickers and meat packers, jobs that “nobody” will take now. Those jobs paid a living wage and built a lot of homes and put the kids through college. Honorable work. Not below their status.
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I am often astounded by how many people apparently think minimum wage is equatable to a living wage. It is not and was never intended to be.
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Uh… “Social justice?” Really? No, sorry. To put it very simply, a living wage is the amount of income it takes for someone to be able to independently afford basic food, shelter, clothing, and health needs. As I said, minimum wage was never intended to be a living wage and it should never, ever be made to become so. Sadly, people today think minimum wage should be able to pay for everything: food, shelter, clothing, health needs, transportation, entertainment, etc. They also think that companies can just wave a magic wand (figuratively speaking) and make money appear out of nowhere to cover completely unrealistic increases in minimum wage. Worst of all, they think that it’s the government’s job to ensure that they get pay raises instead of they themselves making the effort to bring about raises for themselves.
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What you have described as a living wage is essentially a social justice concept. We don’t disagree on that. It is not a legal term but a goal each person works for.
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This article needs to be put into perspective. Approximately 3% of people who are working are paid minimum or less (2011 data from the US Department of Labor) . The largest group of individuals who are paid minimum wage or less are ages 16-19. When this statistic is broken down further to account for part-time workers, workers who are not the primary source of income etc. . . the actual number of people who are trying to pay their own rent on minimum wage is very small. Also note that the article discusses individuals but uses a modest two-bedroom apartment as the standard for the rental unit. Additionally, all of these individuals would be eligible “Section 8 Vouchers” (government funded rental assistance). The perception that there are significant numbers of households trying to live on a single minimum wage earner is not correct and ignores all of the available government assistance programs.
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You raise an excellent point. Minimum wage is really nothing more than the government telling a buyer of labor and a seller of labor that they are prohibited from agreeing on a price for that labor that would otherwise be acceptable to both parties. And we wonder why the teenaged unemployment rate, especially in large cities among minorities, is so incredibly high. Better, I guess, that these kids roam the streets this summer.
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Expecting entry level, minimum wages jobs to pay a “livable” wage does a disservice to workers who actually want to put in the effort.
When I entered the workforce at minimum wage I needed to prove that I was worth keeping around. When I showed management that I was ambitious I was given a raise.
Having to provide a “livable” wage to someone who shows no interest or ambition in bettering themselves is simply a handout. That “livable” wage should be earned, not simply expected.
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I moved out when I was 16. I managed to stay in high school. I graduated early in January. I worked five nights a week to pay my own rent. I didn’t have a car until I got married at 21. Funny thing is I never felt poor. I always had money. It helped though that I worked at a restaurant and got free meals. My rent was only $185, phone bill $7, and cable $7. It was easy to make enough money in tips to cover my bills back then.
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