[jeffkrol]

pay attention please.... a little something for everyone
Vote: Minimum Wage for Hong Kong, Good or Bad? - China Real Time Report - WSJ

Hong Kong is about to enact its first minimum wage, which will likely be around 28 Hong Kong dollars, or US$3.61, per hour. Legislation to enact a minimum wage was passed in July and is part of the government’s efforts to address Hong Kong’s worsening wealth gap. But opinion is divided on whether setting a wage floor will help or harm workers as well as the overall economy.

Economist Stiglitz endorses Hong Kong minimum wage - China Real Time Report - WSJ

Stiglitz recalled supporting the lifting of the minimum wage in the U.S. when he was on President Bill Clinton’s Council of Economic Advisors in the early 1990s. “The evidence in the U.S. was overwhelming that the minimum wage could have a positive effect on both the economy and people at the bottom,” he said.

Chinese Workers’ Rising Rights-Consciousness - China Real Time Report - WSJ

The party-state might find it harder in the future to suppress pressure for legal reform if labor disputes and labor activism increase in the midst of other social tensions

[mikemike]

I think minimum wages are only effective if they are at or just slightly above market rates for unskilled labor. But as I am sure Jeff could point out with dozens of news and research snippets having a minimum wage doesn't do much for income inequality.

The people minimum wage hurts the most are teenagers and fresh college grads who are in the catch-22 of not having any experience and not being able to get a job to gain experience. Hiring them, even at minimum wage, is a big risk for a company because they require so much training and might not have a mature attitude. The actual wage that they earn isn't too important to many who are desperate for experience since they can still mooch off their parents until they establish their reputation for hard work. I was in this situation until I got a break when my grad project was picked up by a commercial interest and I was able to ride that into a job. I know a lot of friends who were never able to break into the professional world and are still working at dead end jobs as waitresses or manual laborers and pushing into their late 20s partially because of this phenomenon (partially because they got accustomed to a $13-20/hr lifestyle and didn't want to take an entry level job that paid less, but thats a different story).

I think our recent minimum wage bumps in the middle of the recession has caused a spike in this problem and they need to either relax the minimum wage for young people. Maybe letting anyone who is still being claimed as a dependent to take a lower minimum wage as long as they aren't working in a position where the minimum wage is the prevailing wage and only for a probationary period like 3-6 months.

[Chwisch87]

Well, benefits that all people can enjoy such as universal healthcare would be much more effective as it would decrease the cost of working families.

[jeffkrol]

I think minimum wages are only effective if they are at or just slightly above market rates for unskilled labor. But as I am sure Jeff could point out with dozens of news and research snippets having a minimum wage doesn't do much for income inequality.

You talk like research is a bad thing.......

The people minimum wage hurts the most are teenagers and fresh college grads who are in the catch-22 of not having any experience and not being able to get a job to gain experience. Hiring them, even at minimum wage, is a big risk for a company because they require so much training and might not have a mature attitude. The actual wage that they earn isn't too important to many who are desperate for experience since they can still mooch off their parents until they establish their reputation for hard work. I was in this situation until I got a break when my grad project was picked up by a commercial interest and I was able to ride that into a job. I know a lot of friends who were never able to break into the professional world and are still working at dead end jobs as waitresses or manual laborers and pushing into their late 20s partially because of this phenomenon (partially because they got accustomed to a $13-20/hr lifestyle and didn't want to take an entry level job that paid less, but thats a different story).

I think our recent minimum wage bumps in the middle of the recession has caused a spike in this problem and they need to either relax the minimum wage for young people. Maybe letting anyone who is still being claimed as a dependent to take a lower minimum wage as long as they aren't working in a position where the minimum wage is the prevailing wage and only for a probationary period like 3-6 months.

Think or know???? Seeing things on a micro level can be distorting..
thus the use of "studies".....
As far as I'm concerned minimum wage is a zero sum game w/ little downside.. markets adjust to it as they do to material costs...
Looking at it regressively what if wages went to zero..... leading to totalitarian/dictatorship or socialist/communist state.......
To me the only way to sustain a capitalistic/democracy is thought "real" wages.. ones that allow a bit more than subsistence. Going down on min. wage would be counter productive to a recession with an added feature of being hard to readjust when times change (it was good enough then ect.)
Industry/corps are very sluggish in this areas.. thus the unions....

[Ira]

Of all those working in the U.S., what percentage earn minimum wage anyway?

In my area, they all offer substantially more to get qualified people at all. (Fast food, for example.)

I think this is one of those emotional issues that libs and conservs like to fight about, but:

1) Raising the minimum wage doesn't make companies hire less and kill jobs.

2) Keeping it the way it is isn't forcing people into starvation.

As it is, any increases have been minimal, with negligible effects to either party.

[mikemike]

As far as I'm concerned minimum wage is a zero sum game w/ little downside.. markets adjust to it as they do to material costs...

It might be a zero sum game in terms of GDP but it definitely destroys jobs as businesses shift to less labor intensive means of production, cut corners on overhead costs like support staff, and when it comes to direct hires vs. outsourcing for unskilled jobs.

Surely you have seen where increased material costs have resulted in excessive adjustments to the detriment of the consumers.

Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

The biggest explanation is of course the bad economy. But it's precisely when the economy is down and businesses are slashing costs that raising the minimum wage is so destructive to job creation. Congress began raising the minimum wage from $5.15 an hour in July 2007, and there are now 691,000 fewer teens working.

Minimum Wage Increase Leads to Higher Teen Unemployment Rate - WSJ.com

My first summer job was washing and vacuuming cars for minimum wage, today that place has switched from hand wash to having a drive through with hand dry and they have cut back on the number of days when they are open. It might be a micro level observation but the aggregate of these does destroy jobs, closes and closes opportunities for young people.

[Ira]

It definitely destroys jobs as businesses shift to less labor intensive means of production, cut corners on overhead costs like support staff, and when it comes to direct hires vs. outsourcing for unskilled jobs.

So what you're saying is that we can put a million Americans immediately back to work, by abolishing the minimum wage, paying them 50 cents an hour, and retrieving all of those call center jobs that moved to India?

I'm HAPPY that the minimum wage kills jobs with salaries like that.

[Ira]

Minimum Wage Increase Leads to Higher Teen Unemployment Rate - WSJ.com

You mean people have been losing jobs over the past few months?

What a surprise!

[jeffkrol]

It might be a zero sum game in terms of GDP but it definitely destroys jobs as businesses shift to less labor intensive means of production, cut corners on overhead costs like support staff, and when it comes to direct hires vs. outsourcing for unskilled jobs.

with or without it that's a business mantra "cut cost increase profits"

Surely you have seen where increased material costs have resulted in excessive adjustments to the detriment of the consumers.

Only because there pay was not increased as well.... zero sum again
It's the constant balance/ unbalance cycle that is the problem not the actual numbers....IF the tech was such that business could replace all workers and still create profit THEY WOULD, pay rates would be a pointless discussion.. That's just reality.
Raising the min wage to $500 / hr would have little effect in a closed economy (obviously not what we have) since costs would go up proportionately (in theory).. zero sum.
Some of the biggest min wage increase whiners in the past are still some of the better producers and profit sources...seems history is forgotten.

Minimum Wage Increase Leads to Higher Teen Unemployment Rate - WSJ.com

My first summer job was washing and vacuuming cars for minimum wage, today that place has switched from hand wash to having a drive through with hand dry and they have cut back on the number of days when they are open. It might be a micro level observation but the aggregate of these does destroy jobs, closes and closes opportunities for young people.

Has nothing to do w/ wages except you became more expensive then a "box" and as we know from business, the price of the "box" will always fall.... self defeating race to the bottom in my mind.
Oddly enough many would find the "box" is more expensive in the short term anyways..
businesses are not always the best example of logic and the penny wise pound foolish motto usually kicks in somewhere.......

[mikemike]

So what you're saying is that we can put a million Americans immediately back to work, by abolishing the minimum wage, paying them 50 cents an hour, and retrieving all of those call center jobs that moved to India?

I'm HAPPY that the minimum wage kills jobs with salaries like that.

I'm not happy when I call up a call center and I get someone in India. I have noticed an increase in robocalls from politicians since the minimum wage has increased. I don't know if that is totally linked, but I used to get called by a real person who was a US citizen soliciting my vote.

Heres another research supported factoid about minimum wages to chew on.... Minimum wage increases are poorly targeted if the goal is to reduce poverty. Most people who work minimum wage jobs are not working those jobs to keep themselves off the streets, they are working them for some spending money in a household where a breadwinner is already covering most household expenses.

Using data drawn from the March Current Population Survey (CPS), we find no evidence that minimum wage increases between 2003 and 2007 lowered state poverty rates. Moreover, we find that the newly proposed federal minimum wage increase from $7.25 to $9.50 per hour, like the last increase from $5.15 to $7.25 per hour, is not well targeted to the working poor. Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households, an even smaller share than was the case with the last federal minimum wage increase (15.8%). Of those who will gain, 63.2% are second or third earners living in households with incomes twice the poverty line, and 42.3% live in households with incomes three times the poverty line, well above $50,233, the income of the median household in 2007.

Minimum wages and poverty: will a $9.50 federal minimum wage really help the working poor? | Southern Economic Journal | Find Articles at BNET

This is another case where a government policy redistributes money upwards.

If anyone thinks that minimum wages ease income inequality please explain why income inequality has increased in the past decade in lock step with the minimum wage increases.

[reeftool]

The minimum wage is so low anyhow that nobody but teenage workers can afford to work for that amount. Even a kid with a part time job will spend half of what he makes on gas drive to there. People should be paid fairly for work performed. The minimum wage should be raised IMO.

[mikemike]

Raising the min wage to $500 / hr would have little effect in a closed economy (obviously not what we have) since costs would go up proportionately (in theory).. zero sum.

Not really, a lot of what we spend money on is really discretionary stuff that we do for ourselves if it is too expensive to have someone else do it for us. Or we could get away with doing it less often without a huge downside i.e. washing your car, getting your hair cut, mowing your lawn, painting your house, steaming your carpets, etc. If it was too expensive people would still do these things they just wouldn't hire someone else to do it for them.

[mikemike]

The minimum wage is so low anyhow that nobody but teenage workers can afford to work for that amount. Even a kid with a part time job will spend half of what he makes on gas drive to there. People should be paid fairly for work performed. The minimum wage should be raised IMO.

In reality they will never be able to increase the minimum wage to a "living wage." There are better ways to target and alleviate poverty than through minimum wage laws.

[reeftool]

It will never be a living wage but at least a minimum is slightly above slave labor/sweatshop status.

[jeffkrol]

In reality they will never be able to increase the minimum wage to a "living wage." There are better ways to target and alleviate poverty than through minimum wage laws.

Come on Mikemike I want studies.........

Most estimates, especially those over the full set of increases, lie close to zero. In the case of teens, the Card test suggests employment fell in response to the first increase, but the estimate is sensitive to changing the base year for the comparison and, in any event, is counteracted by slightly larger, statistically significant gains in employment associated with the second increase. The results for less-educated adults show the opposite pattern, with a marginally significant employment rise associated with the first increase and a significant decline associated with the second increase. Neither movement, however, is particularly robust, and estimates of the employment effects over the full increase are statistically insignificant and near zero in economic terms. Similarly, this update of the time-series analysis that originally shaped the conventional wisdom that minimum wage increases lead to job losses suggests that, were this analysis undertaken today, the results would be quite different. First, using variants of the original models run by the Minimum Wage Study Commission shows that the negative elasticity becomes smaller and less significant over time. Of equal importance are the advances in our understanding of this type of analysis, which suggest that these early models were incorrectly specified, leading to "false positives" (i.e., thinking that significant relationships have been identified where there are none). When these more recent methods are applied, the fragility of the relationship between the minimum wage (as measured by the Kaitz index) and teenage unemployment is evident.

The impact of the minimum wage

Conclusion Minimum wage increases have at least two purposes. The first is to lift the earnings of low-wage workers. Opponents of the policy have often raised the potential disemployment effects, but this analysis shows that minimum wage increases do not price low-wage workers out of the labor market. The employment effects, while negative in some models, never reach anywhere near the level where the benefits to low-wage workers would be outweighed by their costs in terms of job losses. These findings, especially when taking into consideration the characteristics and incomes of minimum wage workers and their families, provide convincing evidence that the policy is effective in raising the earnings of low-wage workers, most of whom (though not all) reside in below-average income households. The second purpose of the minimum wage is to maintain a floor underneath the low-wage labor market. This role of the minimum is important, because low-wage workers have historically had the least bargaining power in the U.S. workforce. As shown in Table 1, they are least likely to be represented by unions and more likely to be female or minority, two groups whose wages and incomes have historically been lowered by discrimination. Figure 3 makes the point that this floor used to be significantly higher, high enough, in fact, to lift a working mother with two children above the poverty line. This is no longer the case, and this worker must now depend on other supports, such as food stamps and the Earned Income Tax Credit, to provide her family with an income that enables the family to meet its basic needs. These subsidies are an important part of a package of income supports that help working families make ends meet. But it should also be stressed that the minimum wage, which has the direct effect of raising the market wage paid to the low-wage workforce, is an important component of that policy package.

Here's one.......
http://onlinelibrary.wiley.com/doi/10.1111/1468-0084.64.s.7/abstract
bibliography's useful:
http://humanresources.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=humanresources&cd...bor/wm2557.cfm
Considering your stance on health care.. I fail to accept your "sympathy" for the youth......
I take it this is your "library".......
http://jec.senate.gov/public/index.cfm?a=Files.Serve&File_id=919b0f21-10e6-4...9-6806f254678c

Conclusion
The recession has badly hurt today’s youth – unemployment has risen much more for workers aged 16 to 24 than for the overall economy. This will leave many workers with worse job prospects and lower earnings throughout their working lives. Unfortunately evaluation studies show that youth employment programs do not to improve youth job prospects. Increased funding for youth jobs programs would accomplish little beyond adding to the national debt.
The best way for Congress to improve the job prospects for youth and other low-skilled workers is to pass policies promoting entrepreneurship and investment that increase business demand for new workers. To specifically boost youth employment Congress could return the minimum wage to $5.15 an hour. This would spur business to hire hundreds of thousands of young employees and provide them with important experience and skills.
Fortunately, despite its costs, this recession does not threaten to turn today’s youth into a “lost generation.” Unfortunately the looming federal spending crisis does. Paying for the baby boomer’s retirements without cutting spending would require raising middle-class income tax rate to 47 percent. Unless Congress acts today’s youth will become a debt-paying generation.

NOT in my country............