Since I’m traveling abroad and unable to stay on line for long using the Italian phone system, I’ll use a Herald article as a citation for MA’s recent increase in the state minimum wage.
Just when we’re losing population and jobs in the Commonwealth, our genius solons pass this legislation?
I assume I’ll get the standard liberal BS about “living wages” and “try living on $5.15 an hour,” but the reality is as the Herald editorial says: raising the minimum wage kills jobs.
This now, on top of “health insurance reform.” Great.
We’ll soon enough see newpaper stories about this or that coffee shop being unable to hire summer help. And expect reporting on how the inability to hire less expensive labor turns MA into an haven (heaven?) for illegal immigrants.
Hasn’t anyone taken Economics 101?
My prediction: MA’s on track to lose 20,000 more people 2006 (3,000+ in 2004, and 13,000 in 2005.) And two — two! — US Congressional seats 2010.
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And your point would be?
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For those who skipped Economics 101: raising the minimum wage CREATES jobs. Ceteris paribus, a rise in wages represents a reallocation of factor rewards from capital to labor. Or, to be overly simplistic, a shift in income from the wealthy to the poor. This will probably not change the consumption patterns of the wealthy, but will have a dramatic impact on the spending of the people who receive the higher wages. Poor people tend to have a very high propensity to consume (that is, they spend most of what they earn), so nearly all of the higher wages will be recirculated into the economy, creating new jobs because of higher demand for goods and services.
Do we think that minimum wage folks are just going to put the money under the mattress? No. They spend it. Good for them, good for their neighborhoods, good for the economy, good for jobs. Cf. Henry Ford doubling wages.
You believe raising the minimum wage CREATES jobs? What does “reallocation of factor rewards from capital to labor” mean? Is this some Marxist dialectic I’m missing? Please find some cites.
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Hey, if $8.25 is better, why not $10 an hour? More is better, right? What’s a “fair” annual salary in MA? $35,000? $40,000? Ok, let’s set minimum wage to that: $20 an hour. Heck, $50!
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Explain to me why if $8.25 is good, why isn’t $50 better?
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Would that create jobs? Someone making minimum wage today will find it harder to stay employed, and the corner coffee shop is less likely to add that extra college-kid summer job if that employee costs 15% or 20% more.
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If an employee’s job is “worth” $6.75 an hour, will that job be around if the state commands that job to be $8.25? Not everyone who has a minimum wage job today is going to get a pay increase. Some will. But some will lose their positions. Or future hires will not happen.
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Check here, and here, and here.
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I suppose you believe rent control creates more housing?
Citing to the Heritage Foundation, the Cato Institute and the Ludwig von Mises institute are not credible ways to support your arguments. This is an interesting issue, and there are good arguments on both sides, but not from pseudo-academies like those. They are not reality based. You might as well cite to Donald Rumsfeld on the subject of WMDs in Iraq, or to Bill Frist on how responsible physicians should diagnose end-of-life health issues. While you are at it, please provide some citations that show that lowering the minimum wage would create jobs in Massachusetts.
I was just trying to use some Economics 101 terminology. If you don’t understand the concepts, it’s going to be a little hard for us to carry on a dialog.
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You ask for “some cites.” Try any introductory Economics textbook.
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Your own citations of right-wing and libertarian sites make me wonder why you’re posting on this one.
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I’m happy to participate in a discussion, but I don’t accept the mission of providing a tutorial for basic economics concepts.
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The issues go beyond Economics 101, of course, and touch on social and economic justice, but I’m not clear you’re interested in talking about those things.
At $50 an hour, the marginal propensity to spend would obviously fall way below one, which would reduce the velocity of money and reduce aggregate demand.
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Would a simiilar wage hike to $8 or $10 an hour cause the same problems with AD? Not in Massachusetts, where the prices are significantly high enough that basic living expenses would keep the money circulating.
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Honestly, for a guy with a Master’s Degree in Economics, you sure do like to play dumb.
it’s pretty self-evident that the minimum wage should just be tied to inflation instead of jumping up drastically every so often (though this is over two years), but this is pretty much the same for 2008 as it was when i was in high school working at a movie theater and it went up to 6.75 (which is worth abotu a dollar less today). Are you saying your for continuing to lower the minimum wage year after year instead of catching up with where we were? The minimum is the foundation of an economy to make sure it is working okay for everyone trying to get by (though this is still too low to achieve that fully)… it is the basic element of judging the morality of a nation, how it treats the least amongst itself.
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And what’s with complaining about the “health insuarance reform”? If it acomplishes anything it is reducing the burden of forcing businesses to provide health insurance: I’m pretty sure that small businesses are the only group that comes out significantly better off for that law. Maybe some of them on Beacon Hill should take Econ 101 to learn the basic economic fact that markets are not an efficient or effective way to ration health care.