Social Question

Dan_Lyons's avatar

Is lowering the cost of living a better solution than raising the minimum wage?

Asked by Dan_Lyons (5376 points ) May 4th, 2014

There’s been a lot of chatter about raising the minimum wage, but then the chatter is that this will not solve the problem due to the high cost of living.
Can we lower the cost of living?

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58 Answers

JLeslie's avatar

We can if people stop paying the high prices. Some goods have small margins, but some have huge ones. If people had not purchased overpriced housing, the housing bubble would not have happened. Builders and individuals were making quick and large profits. This happens all too often in too many industries. A reasonable and fair steady climb in prices is better than sharp climbs.

I wish we could go back to single salaries easily affording a nice and safe neighborhood with decent schools and some discretionary income for fun and some savings. It’s not just housing, all expenses add up. Transportation, food, etc. It all feels out of control to me. As long as a portion of the population can afford higher prices and an additional portion will put things on credit, the economy will continue to be what I consider to be ahead of itself.

Symbeline's avatar

Don’t know much about how this all works, but yeah, perhaps the cost of living should be lowered. Well I guess it makes no difference, either lower the cost of everything or raise how much peeps get paid, thing is, economy isn’t going to happen if people can’t buy and pay for shit. At least that’s how I understand it.
People will do it because they have to, but there are limits. We’re nowhere near them, not compared to other places, but who’s to say it can’t happen.

ragingloli's avatar

No. It would make things worse, by exacerbating the downward spiral.
In order to lower the cost of living, products would have to get cheaper. That means revenue for producers would decrease, giving them more incentives/excuses to pay even less to their employees, lay people off, or off-shore more jobs to China.

jerv's avatar

The devil is in the details, but generally yes.

@ragingloli That depends on margins. Look at computers. HP has about a 5% profit margin while Apple products cost about the same to make but get marked up enough for profit margins in the 35–50% range. You aren’t paying more because Macs/iDevices cost more to build. And the insurance industry threw a big fit when they were told to pay out 85% instead of giving their executives 8-figure compensation.
Simple economics dictates that you can make good profits on slim margins if lower prices yield increased sales. Yes, it’s a curve, so there’s a balancing act there, but the American way is for companies to cut costs without lowering prices. That’s the problem; greed causes reality to diverge from theory in ways that lead to… well, what we have now.

How much of high housing costs is due to the real estate bubble we had and landlords trying to make up for being upside-down in their mortgages anyways? Considering that rent is the largest expense for most people, I think that’s a legitimate question.

ragingloli's avatar

@jerv
“Simple economics dictates that you can make good profits on slim margins if lower prices yield increased sales.”
And that is the problem. If people just started buying more, their (the consumers’) costs would stay the same, defeating the purpose of the solution.
The proposed solution to low-wage-caused-poverty of lowering the cost of living implicitly requires that consumption stays the same.
So with that in mind, revenue falls.
And as you already hinted at, companies will cut costs as a response to that, because they sure as hell are not going to just absorb the reduced profits, as that would contradict their raison d’être.

rexacoracofalipitorius's avatar

No. lowering the cost of living is not a “better” solution than raising the minimum wage, because it’s not the same category of thing. The minimum wage is a single value, like a knob that government can turn, with the expected effect of linearly raising the income of low-wage earners. It also has a variety of follow-on effects which a wise administration should take into account before turning the knob.
The cost of living, however, only looks like a single value because it can be estimated as a single value for a given set of circumstances. The cost of living is actually a complex of prices of goods, available infrastructure, and opportunity expenses. It’s not a single knob that can be turned up or down, and in fact it’s so complex that there’s no simple handle on it; governments can’t just raise or lower the cost of living at will.

Jonesn4burgers's avatar

The problem is too many people trying to live beyond their means. Everybody belives that freedom means everyone gets to be upper class, and spending more than they can afford to give the appearance of wealth has become commonplace. It has become a frenzy which only feeds the beast. People, as @JLeslie pointed out, pay way too much for things simply because they need those things to look wealthy. Overspending goes on for quite some time, then CRASH, the credit cards are maxed out, the house is reposessed, and people are not making enough to pay off their excess.

Darth_Algar's avatar

There’s a million different things that factor into the cost of living, so it couldn’t really be feasibly lowered at will. Raising wages is a much simpler, and much more linear matter.

Or what @rexacoracofalipitorius just explained much better than I.

jerv's avatar

@ragingloli Which basically means that our best chance really is to give the current situation steroids and crash so hard that anybody with any sense of history will never do what we have done over the last few decades.

Until they forget the lessons learned…. which will be pretty quick, so it shouldn’t take long before history repeats itself.

@Jonesn4burgers How much of that debt is actually necessary though? Higher education is beyond the means of most unless they want to take on massive debt, so upward mobility is something that only those already on top are allowed. Medical care is too; it’s a leading cause of bankruptcy, and I know most of my debt is the result of the medical care I received after a nasty car accident.

While there is a bit of the sort of overspending that you point out, there are still tens of millions for whom eating more than two meals a week is living beyond their means. I’m not saying you’re wrong, just that you are pointing out just one piece of the bigger puzzle.

JLeslie's avatar

@jerv I learned from a Michigan friend a month ago that every student who wants to go to college on MI, maybe it is every state, has to fill out the forms for student loans. I think it is called FAFSA and basically every student can get a loan. I’m not sure exactly how that works, jellies can correct me if I am wrong. That’s ridiculous. Loans are being presented as the “normal” just like mortgages are for houses. My girlfriend doesn’t want or need a loan for her children for college yet she was forced to do all the bullshit paperwork for it. We talked about it on a Facebook thread, a friend of hers was on the thread and said she regretted not saving for her child’s education, because free money from the government she thought would be available for her daughter isn’t. She thought they were poor enough to qualify for some things. She wished she had not bought such a nice house and such a nice car. Money from the government and loans in my opinion have helped to drive up college costs.

Over 30% of Americans own their home outright, over 40% of Americans have no credit card debt (I am not exactly sure how credit card debt is calculated). People can do it if they sacrifice at first and then pay for things they can afford. Many many people are in debt who don’t need to be. I am not talking about the poor, the poor are in a very precarious position that I have empathy for. I am talking about the middle class, the middle class still is the largest class in America, how they spend and save really matters to our economy.

I wonder how much debt those people who can barely afford to eat really have as a percentage of their income compared to those who have much higher incomes? Part of me would guess poor people don’t have a high debt. They can’t get the credit extended to them. Although, I guess in the last 15 years maybe they could. The people with the least are preyed upon, I think it is awful.

I was at the bank helping my MIL last week and I wanted to make sure her account had no fees, what the minimum might be to avoid fees. They had an over age 62 checking account that had no minimum. But, if you are 20 and poor you pay a fee. Seriously? That should be illegal. Those fees are disgusting. I started my bank account when I was 5, my first grade teacher did it, and we brought in a $1 every so often to put in the bank. Small accounts should not be paying fees. The account earn .3% but there is a monthly fee of $15. Seriously? Highway robbery.

There also should be a law that tells people how much a house mortgage will cost over the life of the loan that is presented to them when they are given their good faith estimate. Instead they don’t sign off on it until they are at the closing table. I’m taking a loan out for $250k and my husband wanted a 30 year and I wanted a 15. The 30 year we pay something like $220k in interest and the $15 year is $80k in interest. A difference of $140k! That is easily putting two kids through a state school. But, people continue to pay on credit focusing on the monthly cost rather than the total cost. people are completely clueless on the cost of debt.

Crazydawg's avatar

@rexacoracofalipitorius Yes the government has a real ability to lower and raise the cost of living through taxes and subsidies to name just 2. Just last year the Feds let a payroll tax break expire and anyone earning a paycheck took a hit and someone on minimum wage probable sorely misses that extra 20 bucks a week they are no longer getting.

JLeslie's avatar

To clarify, when I was in first grade there were no fees for small savings accounts.

rexacoracofalipitorius's avatar

@Crazydawg You claim that the government has “a real ability” to affect the cost of living through taxes and subsidies, but you don’t specify exactly how. There are taxes, like estate tax, and subsidies, like those for ethanol, that don’t directly affect the cost of living. That’s not to say that they don’t affect it at all, which was never my point. The point is that the “cost of living” is a big mess of variables, and a minimum wage is just a number.

ibstubro's avatar

This is difficult for me to get my mind around, even harder to put into words. @rexacoracofalipitorius did a magnificent job. GA and I’ll stay out of the fray.

Crazydawg's avatar

@rexacoracofalipitorius I gave you the real example of how the government could have extended the payroll tax cut but they didn’t and my take home pay was subsequently reduced and that increased my cost of living. If the government lowered the tax on gasoline that would lower my cost to drive my car and my cost of living. There are all sorts of taxes we pay that the government could mess with as well as subsidies on many things we buy and use. State and Federal income taxes greatly affect yours and mine income which greatly affects one’s cost of living.

jerv's avatar

@Crazydawg But you just conceded @rexacoracofalipitorius’ point; there isn’t a single thing, but rather a number of things. Each of those is a separate dial, so to speak.

You also underestimate greed. Lower gas taxes means oil companies can charge the same price yet increase their profit margins. If you think they wouldn’t, you weren’t around after Hurricane Katrina.

Crazydawg's avatar

@jerv My comment was specific to @rexacoracofalipitorius statement where he said that the governments can’t just raise or lower the cost of living at will. they certainly can for the reasons I gave. I didn’t make my comment to debate the effect of corporate greed because that is an external force that we all have the ability to control in that if you truly feel X corporation is making too much profit just don’t buy their good or service it is that simple.

Dan_Lyons's avatar

@JLeslie Not only were there no fees for the poor little bank accounts, but there was 51/4% interest on passbook savings accounts and we were promised this would only go up (become a larger percentage) as time went by. {mid 60s}
This was a big clue to me how the banks later planned to steal hundreds of millions of $$$ from us over the next 50 years.
Their plan was simple. Lie to the public and then give them back nothing but maybe a toaster now and then.

Darth_Algar's avatar

In 18 years since I opened my first account I’ve never had to pay a monthly fee for a checking account.

jaytkay's avatar

Deflation is not good. Deflation makes people put off purchases, so they can pay a smaller price later.

A deflationary economy is a crashing economy.

Why does the Federal Reserve aim for 2 percent inflation over time?
“Over time, a higher [thank 2 percent] inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling—a phenomenon associated with very weak economic conditions.”

JLeslie's avatar

@Dan_Lyons Back then savings earned more like 10%. I think I had a CD earning over 12%. I must be older than you. This is back in the 70’s. I remember when I moved to NC back in 1999–2000 my savings was making almost 5%. Or, maybe that was a CD? Not sure, my memory isn’t great. I had a 4% CD about 6 years ago I remember. I wish I had done one for a longer term. Hindsight.

jerv's avatar

@Crazydawg I don’t think you’ve been following politics at all in the last few years then. Like our society, they are paralyzed by opposing factions butting heads. They filibuster roll call, and many on the side pushing for the policies that lead us to where we are are so fanatical that even death won’t stop them from pushing their agenda; they’ll rise as zombies and continue fighting.

So no, I have little faith that government can even tie even tie their own shoes, let alone pass any policy changes that aren’t concessions to terrorist demands or corporate whims. At least not on the federal level.

rexacoracofalipitorius's avatar

@Crazydawg Those are good examples, and I’m sorry I didn’t address them directly. Neither the payroll-tax nor the gasoline tax are direct determinants of the price of gasoline and of labor respectively. There are other transactions that take place in between you paying for the gas and the gas vendor paying the tax; similarly with your boss’ tax payments and your paycheck.

It’s certainly true that these things are related to the cost of living and that they affect it. However, the “cost of living” involves much more than just the amount in your paycheck* and the price of gas. If a government wants to affect the cost of living it needs to affect more than just one factor, because the influence of changing one factor could be drowned out by other factors. It’s a complex calculation to try to make, and it can easily be spoiled if there isn’t enough information of sufficiently high quality.

The minimum wage, on the other hand, is a single thing with a direct effect on the incomes of a targeted group. Whether it’s a good idea or a bad one, it’s a much more easily quantifiable one than is “lower the cost of living”.

Here’s an example. Many people (including quite a few here on Fluther) consider a smartphone to be a luxury. Lots of job advertisements these days require the applicant to have a smartphone. Not all of them, but many, and the number increases over time. Is the cost of a smartphone plan to be included in the cost-of-living calculation for that area? There are a lot of edge cases like that.

As to your claim that we should just not buy corporation X products if we don’t like the way corporation X acts, I think that’s naive at best.
First, a lot of people live in a one-company town, and increasingly so. Walmart is notorious for coming into a town and driving out all other retailers. If you live in such a town and you need a widget, it might be a choice between buying it at Walmart or going without. More realistically (it’s pretty easy nowadays to buy things from nonlocal stores) if Walmart is the only employer in your area and you can’t afford to move, then it’s work at Walmart or don’t work. It doesn’t matter whether you like Walmart or don’t.
And it’s not just Walmart. I’m just picking on them because I don’t, in fact, like walmart and I don’t shop there. There are plenty of similar corporations that people are locked into, and even more situations where you do business with a corporation without knowing it.

Beyond that, some corporations are bad citizens, and some are criminals. We have societal sanctions against human beings who are bad citizens, but corporations aren’t human beings and they don’t care if you shun them. Different sanctions are needed for corporations than for human beings. For a pro-social pressure to be effective it needs deterrent power. Corporations don’t respond to the same deterrents as humans.
If you think one person refusing to do business with corporation X matters to corporation X, then either you’re wrong or corporation X is poorly-run and will go away soon. There are corporations whose bottom lines depend on a single customer, but usually that customer is another corporation or a government.

* This assumes that your income is relevant to the cost-of-living calculation, which is debatable. I don’t think it is.

Crazydawg's avatar

@rexacoracofalipitorius You are demonizing the corporations when they are merely “bottom feeders” in the pond that our Government gives them to swim in. The taxes imposed on these businesses whether they are income tax or minimum wage requirements all affect their bottom line and what we as consumers are presented with as a choice of what we can afford to consume. A delicate dance is an understatement and why this is such a difficult topic at best.

As non-PC it is to say it the reality is if you raise the minimum wage you will benefit a small minority of our population and then penalize the rest of the population who will pay more for goods and services thus raising their cost of living and penalizing the businesses that are trying to manufacture and provide these goods and services. The sad part it the super rich are essentially insulated while you and I pay out the nose in more ways than you realize unless you take the time to fully appreciate the complexity of our economy.

jerv's avatar

@Crazydawg How much would we save in reduced government assistance and the administration costs that go with it though? Probably enough to lower taxes.

Coloma's avatar

Sure, I think the government should have another land rush, let settlers come in and improve their claim and…oh wait, there is no more free land and claim staking went the way of the buffalo. Well nix that thought. I think 1814 was a fine year. lol

jaytkay's avatar

if you raise the minimum wage you will benefit a small minority of our population and then penalize the rest of the population who will pay more for goods and services

If it only benefits a small number of people, but it dangerously raises prices throughout the market?

That math doesn’t work.

Coloma's avatar

Min. wage is $13 an hour in France, and Australia is $16. Go figure. Time to leave this played out husk of a country.

rexacoracofalipitorius's avatar

@Crazydawg Which of my statements is “demonizing” anyone? If it’s true, then surely it’s not demonizing- where have I committed an untruth?
Is it your contention that no corporation anywhere has committed a crime or acted as a bad citizen? The former is for the legal system to determine, the latter for its neighbors to determine, and there are plenty of records of both categories of determination.

I suspect you are attacking my statements in order to support some political position or other. I’m not interested in politics particularly. If you want to argue policy then I’ll engage, but I’m not interested in fighting over whose team is better.

Coloma's avatar

@rexacoracofalipitorius There are no teams, only illusion. ( delusion ) haha

Crazydawg's avatar

@rexacoracofalipitorius but corporations aren’t human beings and they don’t care if you shun them Show me one corporation that is not made up of ordinary people like you and I. All corporations especially S Corps and LLC’s are owned by people and profits and losses of those corporations directly affect these people who I can guarantee you are very concerned how their products and services are received by their customers. Even if that corporation is strictly wholesale, their profitability and viability wholly depends on their good or service to eventually hit the retail consumer market. And for better or for worse I cannot think of one good or service that is not affected by the policies AND the politics behind them. Taxes and regulations affect every iota of what a business does and the profit and or losses that ensue from new policies and regulations and conversely when legislation is removed or expired. Every business owner whether mega corporation down to the mom and pop business will give you an earful if you ask them how policies and politics affect their business. And it is not all in the Feds lap either. IMO more of the more impactful policies and regulations that not only effect the cost of doing business and affect the cost of living of it’s citizens come from the state and local level.

jerv's avatar

@Crazydawg Most smaller corporations are as you describe. That should tell you something about how a few bad apples (like Walmart) spoil it for everybody. Those that run the smaller corps probably get it worst as the are saddled with both the stigma earned by the sociopathic corps, and also with the tax bills that the megacorps dodge. Of course, the megacorps have awesome accounting and legal resources, so any attempt to rein them in will only hurt the smaller businesses… and also the labor pool, since small businesses are the ones doing most of the hiring, if they have enough money to do so after paying their taxes, the megacorp’s taxes, and their own non-tax overhead costs.

Crazydawg's avatar

@jerv I have great disdain towards Walmart for the effect that their slash and burn approach does to the small mom and pop businesses but IMO there is no denying the overall positive effect Walmarts have on the communities they enter into. AFAICT they bring more jobs, more products and much lower costs and that in turn can lower the cost of living for those that patronize Walmarts for their lower priced wares. I just don’t get why so many people get wigged out over mega corporations? Sure they have mega profits but they do mega business which does mean lots of good paying jobs and obviously taxes. Sure there are headlines of some big corps paying low amounts even no taxes but those are outlier returns where they use one up tax write offs do to buying and selling parts of their corporation. Mega corporations benefit also from their “buying power” over the resources they bring to the communities that welcome them in with reduced tax incentives that would obviously benefit their bottom line. Small businesses have no leverage to get that kind of attention and endure that higher tax burden. It’s all part of the free market system that ultimately does work if big Government keeps it’s meat hooks off of it. Too much taxation and too much regulation will strangle an economy much of like we have witnessed these past few years. I cannot recall a time when I witnessed so many businesses going out of business. My community is littered with shuttered restaurants and shops. The big mall in our town is a ghost town. Entire strip malls are vacant. Granted I know that internet sales has had a role in that. But I use closed restaurants as the true barometer of an economy where people have extra cash to go enjoy a meal out and it just isn’t happening at the level it once did a few years back.

jerv's avatar

@Crazydawg Do they bring enough jobs to replace those lost by driving local businesses out of business? Do they pay enough to really live on? (Half the hours I work at less than half the hourly wage I make…) And having Uncle Sam (and thus, us taxpayers) pay for their employees healthcare… there’s a few reasons. Costco does things differently, yet manages higher profits per store. And for much of the stuff I buy, they manage lower prices as well despite their worker’s high wages.
Worse is the effect on small businesses though. Thought you might start a business, earn your way up the ladder through hard work and sacrifice? Nope. The best you can hope for is to be bought out instead of shoved out.

Then again, that’s really more a matter of ethics than size. And it’s the unethical ones that cause government and union regulation. They’re the ones that make free market theory fail. Some things look great on paper, but the “Robber Baron” days proved that they don’t always work in practice, and we’re repeating history.

If you want a true free market then it has to be self-regulating. The unethical businesses have to be removed from society the way humans remove criminals and the dangerously mentally ill from society. Unless and until that happens, government will regulate, and the business world as a collective whole has only itself to blame.

Crazydawg's avatar

@jerv This document summarizes and proves the point I believe you are trying to make here @jerv

Walmart has 4 times the sales as Costco, Walmart CEO salary is 6.5 times higher than Costco’s (17.9 mil to 2.7 mil), Walmart gross profit margin is double Costco’s (24% vs 12%) and Walmarts average hourly pay is half that of Costco’s and Costco’s benefits are almost all paid in full by the company. Clearly Costco invests it’s profits in it’s employees. I don’t begrudge Walmart from doing what they are doing but I can vote with my dollar and why I do not patronize companies like Walmart who on paper Walmart could easily do the same.

jerv's avatar

@Crazydawg And, around here, many do. Might explain why I haven’t seen many in the last 5 years despite living in a metropolitan area with >3.5 million people.

As for begrudging anybody, I dislike anything that causes more harm than good. The only difference is whether I consider them malicious or merely mentally incompetent, but neither type should be allowed in public unsupervised.

eno's avatar

@Dan_Lyons

I think it depends on who you ask. I prefer a much higher cost-of-living because it works as a filter for the environment you reside in. See gentrification.

A high cost-of-living forces the middle class and poor to leave and usually, but not exclusively, creates a specific demographic. The neighborhood becomes healthier since those who reside in it have good access to healthcare which also keeps the neighborhood diseased free. The quality of schools-education increases. Infrastructure is maintained and the neighborhood is crime free.

What some minimum wage people do is cram in a bunch of families into one residence and split the high cost-of-living.

Dan_Lyons's avatar

@eno Unfortunately the mental health of folks in these higher costing neighborhoods is abysmally dismal.

eno's avatar

What makes you say that?

jerv's avatar

@Dan_Lyons I have to agree. Whether it be them more worried about the dent in their Mercedes than about the person they hit and killed that put that dent there or merely being so out-of-touch reality that they have no idea what the really real world is like, many do fit one definition or another of “mentally ill”. Then there are the ones that are too elitist to consider those of lesser economic standing to be human; those people should get their wish to be segregated from society… though I don’t think they’d fare too well since they can’t grow their own food or make their own manufactured goods, so they rely on those they see as slaves too much to leave willingly.

Of course, there are people-of-means that are just normal people with a few extra zeroes on their net worth. Looking at the philanthropic efforts of Bill Gates and Warren Buffet proves that one can be wealthy without being a sociopath, just as one can be Christian without being a zealot. Problem is, you don’t hear about that type as much; they make for boring headlines.

Dan_Lyons's avatar

@eno I say that because I grew up in one of those upper class big money neighborhoods.

and @jerv hit the nail on the head in his first paragraph.

Coloma's avatar

^^^ So did I, and for all the money and Cadillacs and Country Club blow outs, everyone, and I mean EVERYONE was a major alcoholic. How happy can one be of they have to slam about 7 Martinis every night? haha
Keep the Country Club ghosts away I guess.

My mom used to trade Valium with the Avon lady. lol

Crazydawg's avatar

@jerv but neither type should be allowed in public unsupervised. what you describe is a “Big Brother’ police state we are creeping awfully close to being and I do not support that mindset one bit and in fact I will fight it tooth and nail.

jerv's avatar

@Crazydawg Do you want violent criminals and the dangerously insane walking the streets?

rexacoracofalipitorius's avatar

@Crazydawg An individual employee or shareholder of Walmart might be impressed with your unwillingness to do business with that company due to their business practices, and might be motivated to change it. However, Walmart as a corporation patently does not care, because they aren’t changing. One customer more or less does not make any difference to them.

As long as quarterly profit numbers rise, why should the shareholders interfere with the CEO?

jerv's avatar

@Crazydawg The mindset that I oppose is one that considers callous disregard for human life to be acceptable, or even virtuous. While I myself don’t want a “Big Brother” state, I don’t consider donating to a local homeless sheltefrr admirable ifyyou killed 8 people robbing a bank to get the money to do so. Nor am I a fan of letting the criminally insane go without oversight. I suppose being dangled off a third floor balcony by my ankles and being thrown across the room hard enough to put a hole in the wall may make me biased on that second one though. As much as I’d like to let things be free, human nature is such that we need to have certain restrictions in order to have a functional society.

The situation we have now with minimum wage is because some don’t care about society, only about their bottom line; profit at any cost, so long as others are paying the price. Lack of accountability for their actions lets them get away with it too. Since self-regulation won’t happen, it’s either government intervention, or let society be thrown to the wolves in order to benefit the greedy. I’d like to avoid both, and business could do so while government is duty-bound not to allow the latter. Therefore, business is causing their own pain here by forcing government to do what they themselves should’ve done.

Crazydawg's avatar

@jerv I have faith in the free market dynamics and limited intervention from the Federal Government and leaving it up to individual states to create the work climate that best suits their states best interest. I disagree that business are causing their own pain by not paying higher wages. There is much more at play than merely paying higher wages and I do not think it is as simple as overriding greed by companies. Companies have to make a profit in order to stay in business and you have to consider who these businesses are that employ these minimum wage employees. Fast-food restaurants, manufacturing, textile, farmers etc. these are the producers of all things cheap that our economy demands and it gets. The reality is then either domestic producers satisfy these demands by employing minimum wage workers or cheaper labor countries will. So it comes down to jobs @jerv. Jobs is what our country needs to sustain our economy. States with higher minimum wages have bled hemorrhaged jobs because they have a higher minimum wage than neighboring states. Thankfully those jobs and businesses simply moved across state lines. If the Feds get involved by mandating a higher min wage I can guarantee you many jobs will then move across borders instead of state lines.

There is a lot more the Federal government can do than make demands on businesses, lower tax rates on businesses and a little less regulation would jump start this economy which would mean lots more jobs and good paying ones that will give min wage earners a chance to have access to these new better paying jobs. Right now because of these policies of the current administration are so anti-business and I am talking small business here, workers aren’t getting raises or bonuses and most people I know have not had a raise or bonus in over 5 years and forget about promotions. It is pink slip city out there and record numbers of companies are going out of business at a rate we haven’t seen in 40 years. Raising the minimum wage will only exacerbate and accelerate this problem.

JLeslie's avatar

@Crazydawg If fast food is making huge profits they could cut their profits and still make huge profits. People get paid a better wage and their retail prices stay the same. I can’t find an argument to support having to make millions or billions in profit, when half the profit is still millions. I just wrote on a different Q I am tired of paying for food stamps, EIC, and other support systems for people who work hard and work full time. Why should I pay for them to live with my tax money? Wouldn’t it be better for them to make enough money to support themselves. Wouldn’t it be better for society all around? Wouldn’t the person themselves feel better, be able to have pride in their job and in society? We take away the dignity of hard working people by not paying them a just rate. I know it’s a fantasy, because the people who have the most power and the most money don’t want to change it.

jerv's avatar

@Crazydawg I have faith in humanity’s profound ability to disprove/defy theory by acting like humans instead of as gears in a machine. If you were correct, unemployment would be half of what it is now, but instead the incomes of the top executives are quadruple what they were.

How is it that, last I checked, many of the states with lower minimum wages (specifically, the South; coincidentally, all Red states) tended to have higher unemployment then? Those states also took more federal money than they gave. By that logic, unemployment in Europe and Australia should be hovering around 30–50%. Also, this

I do agree with you in part though. See, many of the regulations meant to curb the excesses of big business put undue strain on small business, and largely without even affecting their intended target in the slightest.

That said, you are outright reinforcing my point by basically stating that small businesses have zero power whatsoever. They cannot even organized amongst themselves to apply peer pressure to police big business; the business community as a whole is incapable of self-regulating.

But you really seem to think that you can let your roommate blast the stereo at 2AM, fire a few gunshots, rape the neighbors cat, and not have the police come knocking on your door. No, it doesn’t work that way; that’s precisely why the government is intervening.

Then again, it’s almost moot. See, we have such a service-based economy, and most of the minimum wage jobs are there, that it wouldn’t make sense. Think about it; will you go to India for a Big Mac? How is someone in Taiwan going to stock the shelves in your local Walmart?

As for your last paragraph, reread my second paragraph and look at the way Golden Parachutes have grown for some. I know of non-government ways to end that as well, but so long as those measures don’t happen, government will do what it can to cushion the inevitable fall.

I think the difference between you and I is that I believe that if you try something and it doesn’t work, trying again won’t help, and if you made things worse by trying, trying harder will only make things even worse. I also feel that way about government intervention, but I see that as the lesser of two evils here really. So, we have two things that haven’t worked. You (and most Conservatives) want to try the more destructive of them again, only with more gusto, whereas I would like to see Option #3; something without the proven disastrous track record, and that also keeps Uncle Sam largely out of the loop.

rexacoracofalipitorius's avatar

@jerv There’s no point in arguing with him. He has faith.

jerv's avatar

@rexacoracofalipitorius My blood pressure would drop 20 points if I could just remember that.

Crazydawg's avatar

@jerv Don’t ever stop trying to change things but be cautious of trying to change things for the sake of change. Change is not always good and often carry consequences one is unable to see on the fore front.

Many people cheered when the tax rate for the rich was raised 5% but no one made a squeak when the payroll tax relief was rescinded. The rich could easily bear the 5% increase yet anyone here raise your hand who felt good when 2% of your hard earned pay was suddenly absconded by the government right out from under your nose.

jerv's avatar

@Crazydawg No, but change has more chance of working than things that have been proven not to work.

As for the other, I think adding more brackets to accommodate for those with incomes orders of magnitude higher than the current cutoff for the top bracket would be a better change than just jiggering the rates on existing brackets.

Crazydawg's avatar

@jerv Then you now bear the burden of proving what has worked over the policies that have not worked and IMO there is heavy lifting involved to do so even I am not inclined to do to make a salient point. Good luck sir.

ibstubro's avatar

Didn’t we try the “more brackets” thing and it didn’t work?

jerv's avatar

@ibstubro When was that?

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