Re: OT :On Bill, his stupidity, and the Min-Wage law.

no ***

On Oct 7 2008 9:32 PM, gtech1 wrote:

Post is too long. Please post an executive summary.
On Oct 7 2008 10:59 PM, Beldin the Sorcerer wrote:

I'll be flaming away at Billie the idiot soon, I'm sure. His whole schtick
is to pretend that what I say isn't true, even when it is, because he
can't
understand it.

However, he's ran away and hidden from any number of points on the min
wage
/ living wage discussion, which he's concealed through his idiotic bluster
about what the word "inflation" means.

His idiotic claim : There are millions of people working full time earning
minimum wage.

Fact : There may be millions of people working full time HOURS, but most
of
them aren't full time employees.
Min-wage jobs are most often held by high school and college kids.

Here's a quote from a pro-min wage increase site :
http://mediamatters.org/items/200701100004

In fact, while most workers earning the current minimum wage of $5.15 per
hour are part-time workers, the majority of workers who would see their
wages rise under the Democratic proposal are not.

Let's stop there, because it's pathetic to see people change the rules in
the middle of a sentence.
It confirms I'm correct; min-wage jobs are held by part timers. Low paying
jobs in general are held by high school and college students; often for
the
5-7 years it can take to finish college (working the occasional long
weekend, school break, and summer vacation.


Indeed, in order to get the numbers up to anything they can talk about,
the
websites pushing for this DON'T talk about how many people are at the
current federal minimum, but rather how many people would LIKELY get a
raise
when the new law hits

Here's a couple of examples :
Ibid
The Economic Policy Institute (EPI) found that a majority -- 53 percent --

of those who would be affected by the Democratic minimum-wage proposal are
full-time workers (at least 35 hours a week).
http://www.epi.org/content.cfm/issueguides_minwage_minwagefacts
a.. An estimated 13.0 million workers (10% of the workforce) will receive
an
increase in their hourly wage rate when the minimum wage is raised to
$7.25
in 2009. Of these workers, 5.6 million workers (4% of the workforce)
currently earn less than $7.25 and will be directly affected by the
increase. The additional 7.4 million workers (6% of the workforce) earning
slightly above the minimum will also be likely to benefit from an increase
due to "spillover effects".


.. They count not only people who are currently making above the min-wage
now, and would be making at least the new min-wage (and probably more with
experience, or else they'll go elsewhere) but also all the people earning
more than new min-wage who would feel slighted at now making 25 cents more
than Jonnie Nosepicker walking in the door, green as hell (yes, that's my
term.) after several years on the job, and would get a raise due to what
THEY call a 'spillover effect'.

Bill's idiotic myth : There are no jobs lost due to increases in the
min-wage.
Fact : There are always jobs lost when min-wage goes up. This is not done
at
once, this is done as technology improves and the replacement cost of a
worker (as measured in payback time) increases. There are no elevator
operators (or very very few) any more. There are almost no full service
gas
stations any more. Why? It became cheaper to install automated systems.
There are now self-check systems going into any number of retail
institutions, because it's cheaper to pay one person to watch 6 people
scan
their own items than to run 6 quick-check registers.

Let's be fair, some people did studies. They were poorly done studies, as
they were done in the middle of the 90's, the height of the tech boom when
people couldn't get help anywhere, so the min-wage wasn't really being
used
as a baseline to begin with :

a.. A 1998 EPI study failed to find any systematic, significant job loss
associated with the 1996-97 minimum wage increase. In fact, following the
most recent increase in the minimum wage in 1996-97, the low-wage labor
market performed better than it had in decades (e.g., lower unemployment
rates, increased average hourly wages, increased family income, decreased
poverty rates).

Look at that again. Two years, and they think the impact is all there. It
hasn't even started yet, of course. It took a lot longer to develop
systems
to replace people... like those self-checks going into stores now.

This is a common theme in discussion of the impact, or non-impact, of
min-wage increases... that the need for non/semi-skilled workers is
inelastic, like the need for gas. And that's a good metaphor, for as the
prices rise, so does the economic feasability of alternative forms of
it...
be it automatic elevators, going to self-serve gas stations,

Bill's idiotic claims : Productivity goes up from min-wage increases.

Fact : Productivity per manhour almost has to, initially. It costs more to
get the work done, and the same number of payroll dollars are available.
However, what actually generally happens is that corners are cut, and
small
details are skipped... costs are deferred. Unskilled, inexperienced
workers
don't learn faster because the min-wage has increased.

There are other concerns as well. Studies claim all kinds of things,
generally what they wanted to prove when they started... and they tend to
ignore data that hurts their cases.

http://www.huppi.com/kangaroo/41More.htm

The study of the federal minimum-wage increases of 1990 and 1991 has also
come under fire. Donald Deere and Finis Welch of Texas A&M University and
Kevin Murphy of the University of Chicago agree that low-wage states did
better than high-wage ones after the changes.** But they put this down to
regional variations in economic growth, not the minimum wage. Moreover,
they
find evidence for the conventional theory. Because younger workers are
likelier than older ones to be poorly paid, their jobs should be more at
risk when minimum wages go up. The same is true for blacks and Hispanics
(compared with whites) and less-educated workers (compared with
better-educated ones). Sure enough, these groups all suffered when the
minimum wage rose.

And of course, there's a price that some people don't consider. It's one,
alas, I'm personally quite familiar with... the price of making too much
money too early in one's life.

ibid



Some say that a higher minimum wage also has more subtle costs. In another
new study*** Messrs Neumark and Wascher argue that it makes American
16-19-year-olds more likely to leave school. And youngsters who have
already
left school, whether or not they had jobs before minimum wages rose, are
more likely to become unemployed.



I can say from personal experience that it doesn't stop at 19. Someone
earning $32,000 a year working a job at 20 might easily wonder why paying
$14,000 a year for college makes sense to get into a field starting at
$23,000.
The answer of course deals with the high-end of the industries in
question... but that's something that most younger people dont' spend a
lot
of time considering.

Bill claims there are dozens of peer-reviewed studies proving productivity
increases when minimum wage goes up.

I threw Minimum wage increase productivity into Google, and haven't found
one yet.
I've found things supporting MY point, of course :
http://www.springerlink.com/content/000qvx52w7r7ew9d/
Bradley S. Wimmer1

(1) University of Nevada, 89154 Las Vegas, NV


Abstract A firm's ability to adjust its production process to economize
on
low-skilled labor when faced with a minimum wage increase will differ
greatly depending on industry or occupation. For example, more
capital-intensive means of cleaning hotel rooms or serving customers at
restaurants may not be readily available without degrading service
quality.
In such situations, the productivity of labor is essentially capped, and
firms have few options when the minimum wage increases. This simple
observation has implications for studies that rely on microdata to examine
the effects of minimum wage increases. If firms only increase prices in
response to a minimum wage increase, employment effects are likely small.
If
the goal of the minimum wage is to redistribute income from firms and
consumers to workers, minimum-wage increases targeted at industries and
occupations where such rigidities result in an inelastic demand for labor
may achieve the desired goal at a lower cost than across-the-board
increases. However, such a scheme causes an inefficient allocation of
labor
and would be subjected to substantial political pressures that may lead to
anomalous results. Additionally, it is unreasonable to conclude that
policy
makers have the necessary information to skillfully set the minimum wage.

I've seen lots of claims with no evidence. I've seen lots of stupidity out
there too.
From A left wing idiot site :

http://www.theliberaloc.com/2006/07/18/should-market-forces-set-minimum-wage/

Look at this claim :
While the market has had some effect on wages by encouraging many small
business owners to recognize that employees paid a livable and competitive
wage stay longer and are more productive, large companies such as Wal-Mart
do not. These greed-ravaged companies prefer to pay their employees as
little as possible and refer them to public assistance for food stamps and
health care. In the 9 years since the last minimum wage increase the
so-called market forces have not sufficiently corrected the disparity
between minimum wage and livable wage. In an environment where gas prices
have risen more than 50% in the last year and health care and housing
costs
are soaring out of control it is time for Congress to address the need for
an increase in the minimum wage.

I know from being close to several people who worked for Walmart, that in
2000, they were hiring in NH at $9.00 an hour. $10.00 per hour, if you
worked their 'weekend warrior' shift of 12-10, Thurs-Sunday.

The Min-wage in NH at the time was the federal minimum. 8 years ago they
were hiring at more than the proposed min-wage now, and this idiot is
blasting them. Fascinating.

From a Florida proposal a few years back.
http://www.americanprogress.org/issues/2004/09/b191242.html
a.. The $406 million in cost increases for private businesses amounts to
0.04 percent of the total sales of these businesses, which was $928.7
billion in 2003. The average firm in Florida would therefore have to
increase its revenues by 1/25th of 1 percent to fully cover the costs of
the
minimum wage increase to $6.15.

Now this is the kind of stupidity that's disgusting. The businesses don't
need to increase revenue, they need to increase profit to cover this
expense.

Look some more here :
Ibid
a.. The primary way that businesses are likely to adjust to these cost
increases is to raise their prices by small amounts.
- A representative retail clothing store would face a cost increase of
0.05
percent of its sales. It could fully cover its increased costs by, for
example, raising the price of a $20 sweatshirt to $20.01.
- A representative restaurant would have to raise the price of a $20 meal
to
$20.14 to cover its increased costs of 0.7 percent of sales.
- A representative hotel would have to raise the price of a room from, for
example, $100 to $100.20 to cover its increased costs of 0.2 percent of
sales.

Note the assumption that all other costs will be the same. They won't.
The warehouse worker picking the shirt, the loader putting the pallet on
the
truck, the receiver unloading it, all need more money. The person
stitching
the shirt, the guy sweeping the floor at the factory, etc, etc, etc. The
wholesale costs go up, the handling charges go up proportionally.

This last proposal was several years ago. Anyone from Florida seen actual
results?
We're in a recession now, of course, so it's probably hard to get
meaningful
results. Min-Wage predictions are useful if current trends continue. When
they change sharply, all you can reasonably do is extrapolate what WOULD
be
the case now, it the wage hadn't changed, vs what IS the case.

I could do this for hours. It's too easy. But I'll stop for now. It can
be
rather dry to some people.


--
"Actually, I will read Jason's posts too. He's smart also." - Paul
Popinjay, 10/21/2007 (http://tinyurl.com/4bggyp)

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