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talljasperman's avatar

Could we have a minimum wage for middle class non-business owners?

Asked by talljasperman (21858points) December 10th, 2014

I’m thinking of a minimum wage ,(start pay) for the middle class, the lower class has a minimum wage maybe they can have a minimum wage for the middle class non-business owner? Or even a bumped up employment insurance for the rich? I removed business owners because they get the profit from taking a risk with the money that they invested in the business.

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24 Answers

stanleybmanly's avatar

Not likely. There is no uniform accepted definition as to to where the line is, and there’s certainly disagreement among the people involved. And are you stipulating that the workers of business owners be exempted? If so, who’s left?

flutherother's avatar

The middle classes are more or less defined by their income to begin with. If they don’t have enough to be considered middle class they would be lower class.

talljasperman's avatar

@stanleybmanly Entertainers, athletes, legacy’s, CEO’s , stock holders,

stanleybmanly's avatar

Wait a sec. So would the federal poverty line be the demarcation point between lower and middle classes? Otherwise, who do you know who might agree that they have “enough” income?

talljasperman's avatar

@stanleybmanly It would be a more expensive E.I. (employment insurance) that can be privately owned and purchased, and is open to anyone who wants to buy it.

stanleybmanly's avatar

I’m trying to understand the concept. Doesn’t it make more sense to maintain the present system, in which one is already allowed to collect money in proportion to his or her income while employed? As for CEOs , gimme a break!

Jaxk's avatar

I can’t figure out what you’re trying to do with this. Are you really talking about a minimum wage or unemployment insurance? either way it doesn’t sound like anything viable.

talljasperman's avatar

@Jaxk Creative taxation and insurance… you pay into what you please from rich or poor and get the equal insurance, (that you paid into ) against wage loss… even partial wage loss.

Jaxk's avatar

@talljasperman – Won’t work. No legitimate insurance would write a policy where you have control over when and how much is paid out. I would sign up for a huge salary, get fired and take some low level job that only pays a fraction of what I signed up for. I have control over getting fired, and the job I take next. Unemployment insurance has a fairly low cap and prior to this last administration had a term limit.

CWOTUS's avatar

You should realize – anyone who advocates for a “minimum wage” should realize (but they seldom do) – that “minimum wage” = “guaranteed unemployment” for more and more uneducated, young, unskilled, disabled and other marginal employees.

Think like a business owner: any employee that you hire has to be worth the cost of his or her hourly wage + added taxes and benefits that the employee costs. That is an “iron law” of economics. Any business that violates that “law” will not be in operation for very long. You as the business owner absolutely have to cover the employee’s costs, obviously, but in addition to that there has to be some measure of profit for you, or there’s no sense in taking on the risk of a new employee in the first place.

If your business is already operating on close margins – as many do, both large and small – then “added costs of employment” for the new person who was on the bubble mean you’re not going to hire him or her. Multiply that times the number of marginal businesses in various jurisdictions, and you’re looking at massive quantities of people who won’t get that first job.

On the other hand, if an employer is enabled to hire a willing employee at a price they both agree upon, then that person gets work experience, learns skills, starts networking, develops the habits of showing up on time and working a full day (or whatever part he has agreed to work) and becomes more valuable. Before long, if he wants to, he’ll be moving on to other jobs or more responsibility – and value – to the current employer, resulting in higher wages.

Minimum wage laws guarantee that more and more people will be shut out from that first job.

johnpowell's avatar

The minimum wage was codified in American law in 1938. Think about that in historical context.

grac3alot's avatar

Pretty much what cwotus wrote. A new peer-reviewed study just came two days ago to confirm this again.

Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. [snip] Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point. source1

Another study from last month source2

One more source3

johnpowell's avatar

Again grac3alot. All your sources are from the same really horrible source. It is like if I linked to Al Gores website three times to promote climate change.

grac3alot's avatar

@johnpowell

On the contrary, it is the only peer-reviewed source that is reliable. Read the about link

The NBER is the nation’s leading nonprofit economic research organization. Twenty-four Nobel Prize winners in Economics and thirteen past chairs of the President’s Council of Economic Advisers have been researchers at the NBER. The more than 1,300 professors of economics and business now teaching at colleges and universities in North America who are NBER researchers are the leading scholars in their fields. These Bureau associates concentrate on four types of empirical research: developing new statistical measurements, estimating quantitative models of economic behavior, assessing the economic effects of public policies, and projecting the effects of alternative policy proposals.

The NBER is governed by a Board of Directors with representatives from the leading U.S. research universities and major national economics organizations. Other prominent economists from business, trade unions, and academe also sit on the Bureau’s Board.

jerv's avatar

Minimum wage is meant to provide a bare minimum living.

That said, not having a minimum wage leads to the sort of exploitation that ran rampant during feudal times, and is making a little bit of a resurgence these days.

@CWOTUS If by “willing employee” you totally ignore the duress of having to live with zero income at all (and thus no housing, food, or any of the other things that every UN member nation besides the US considers “human rights”), then I suppose; I mean, nobody literally holds a gun to people’s heads telling them they must work for minimum wage, and I suppose no wage at all is an option. One of the reasons I come across as a Liberal is that I consider coercion to be pretty much the opposite of free will.
Also, I fail to see how simultaneously increasing taxpayer burden by forcing low-income workers onto government assistance while simultaneously reducing the number of taxpayers by putting more below the 0% tax bracket helps the economy at all. The only people I think it helps are the multi-billionaires with good enough accountants to have half the effective tax rate as most middle-class people.

@grac3alot Your sources (what little information they give to non-subscribers) overlooks the positive economic effects of having many people lifted out of poverty. In fact, that information may be in there. Many of the numbers I’ve seen have the number of those who wind up unemployed being about half of the number that are helped, and the savings in food stamps alone would add up to a few billion dollars in taxpayer money.
Personally, I’ve seen a lot of arguments on both sides, few of them from truly neutral sources. But if we go by Dept. of Labor’s word, well, we have a different picture. It also directly refutes @CWOTUS’ opinion that minimum wage only applies to, ”...uneducated, young, unskilled, disabled and other marginal employees.”. And the DoL links to a few studies like this Berkeley one that pretty much call sources like your’s out.

At best, @grac3alot, there is enough debate within the economic community, many peer-reviewed studies on both sides, etcetera, that the only sources many people consider “reliable” are those that agree with their own preconceptions. It’s called “confirmation bias”. The exceptions are those that are too inconclusive to make good sound bites for a a political campaign or just don’t make good ammunition in a mud-slinging fight.

grac3alot's avatar

It doesn’t overlook the positives. Source3 points that out. We conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others, and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage.

NBER is an economic peer-review organization. Berkeley is .edu. The Berkeley study hasn’t gone under any peer-review scrutiny so it isn’t a credible source to go by. That is why they only published it on their own personal website. I would only take it seriously if it was reviewed by NBER and published or some other distinguished economic peer-review organization.

Your link to the Dept of Labor isn’t a study at all.

There is nothing in the United states that compares to NBER in terms of neutral, unbiased, peer-reviewed work which means whatever studies are published by NBER is the final say.

grac3alot's avatar

That conclusion in source3 was in 2013. Source2 and Source1 are 2014 studies which build on previous studies, however the difference is now they’re showing that the negatives of increasing the minimum wage are outweighing the positives. That it is no longer a tradeoff, but is now negatively effecting those people that the minimum wage is trying to help.

grac3alot's avatar

@johnpowell

Oh, you’re the guy who tried to slander me with false accusation on the blacks and cops question when I linked to a peer-review study. Why are you trying to character assassinate me here and there? You don’t provide any evidence of your accusations. Just propaganda. You threatened by the truth?

BTW, that other study I linked to in the cop question was also peer-reviewed. link

jerv's avatar

@grac3alot It was meant merely to illustrate my point that there is no universal agreement, and it doesn’t take peer-review studies to prove the existence of doubt, conflict, confirmation bias, or any of the other reasons for my skepticism. Given how many opinions are out there, how many claim or are claimed by various sides to be “THE ONE TRUE SOURCE!!!!”, etcetera, I have some serious trust issues. Maybe I should’ve been a little more clear about what my point really was.
However, the burden of proof for “Opinions differ!” is far lower than the burden of proof for “Minimum wage is harmful!”, so I’m not even putting any effort into it the way you seem to be proselytizing about the holy sanctity of the NBER.

@Jaxk “No legitimate insurance would write a policy where you have control over when and how much is paid out.”
Personally, I wouldn’t trust an insurance company that didn’t have a legal team putting “escape clauses” in the contract. If they lack the drive and/or competence to look after their own interests, how can I expect them to look after my interests?

grac3alot's avatar

I understand, I just disagree. I don’t think your point is valid. Your skepticism is unfounded because it doesn’t differentiate between quality and quantity and probabilities and unlikelihoods. The very function of peer-review is to greatly diminish doubt, conflict, and confirmation bias. What you said here, Given how many opinions are out there, how many claim or are claimed by various sides to be is precisely the reason peer-review exists. It is the high-standard created by professionals of the given field to phase out the quality people from the quantity and derive probabilities. Therefore, we don’t need a universal consensus because not everyone is qualified to disagree or agree, especially anyone here on fluther including myself.

NBER is the main economic peer-review organization in the United States. As you read the about, it is an enormous community and within the community you have the highest standard that exists (Nobel Laureates). While usually not the case, in this case, the NBER organization is the “one true source”. I haven’t see other economic peer-review organization in the U.S other than NBER which is probably why it is such a large organization.

So there is a big difference between an established, distinguished,and enormous professional economic peer-review organization V.S some self-proclaimed professional writing up a study and publishing on his own blog/agenda driven website.

As it stands now, with the amount of studies published throughout the years by NBER, the general consensus is that minimum wage is harmful. The probability of that being true is much higher given the years of accumulated data.

jerv's avatar

@grac3alot “So there is a big difference between an established, distinguished,and enormous professional economic peer-review organization V.S some self-proclaimed professional writing up a study and publishing on his own blog/agenda driven website.”

That is why politics and economics are harder to research than “hard sciences”; while the vast majority agree that F=ma, the “soft sciences” are full of agendas. Trustworthy sources are hard to find. But like @Jaxk chronically does, you underestimate my cynicism. Let me just let you know where I’m coming from here.

I’ve seen enough counter-examples that I’m rather undecided on the issue. My feelings are rather mixed, actually. The fact that we Seattlites have the job growth we do despite our state minimum wage for most of WA and the notably higher wage in certain areas of the metroplex tells me that there is more to it than minimum wage. And when I broaden my scope beyond the local to see what people who know far more about economics than you or I do have to say about minimum wage, I see far more of a divide than I do on global warming where >96% of the community shares the same conclusion.

The things I’ve seen (both anecdotally and academically) bring just enough counter-proofs and questions about correlation vs causation to bring stuff like the NBER papers outside of the range of what I personally consider enough to really convince me. I know a few things about probabilities, and the weight of the evidence isn’t enough to make me comfortable saying either way without further more research than I feel like doing considering that this thread will have zero effect on economic policy, and my individual voice (whether at the voting booth or writing my Congress-thing) will have barely much more.

You have a better idea of why I am skeptical now?

Haleth's avatar

For the middle class, that issue may be overtime pay.

jerv's avatar

@Haleth That is why I don’t do salaried work any more. Then again, Amazon doesn’t pay for the time you spend after your shift waiting to get through security. SCOTUS says they don’t have to.
Minimum wagers get boned, middle-class get’s boned, the lower end of upper-class (like many small business owners) gets saddled with a heavy burden… the only ones not hurting are those with so much money that the only thing thing they can do is use it to make more money. That’s “Horse and sparrow” economics :/

kritiper's avatar

Why discriminate? Pay everybody the same minimum wage!

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