Minimum wage

Is there any connection to the increase in the minimum wage from 5.15 to 7.25 and the crash of our economy.
Minimum wage was voted to increase in 2007 with the wage rising to 7.25 over two years.
Some said it would cause many employers to lay off workers and have to get by with less employees in order to stay in business.
Is this just a coincidence or a cause and effect.

I believe we were warned this would happen.

I know the cost of fastfood went up over night.

Firm's kept profits up by doing several different things.
One they increased the price of their items a percent or two. Secondly, they decreased the amount of full time positions that were offered and increased part time positions. This means the firm paid less in taxes due to loop holes ( at least that is my understanding), and the firm didn't have to pay for insurance. With the rising cost of insurance firms were able to increase profits and hoard more money while common folks lost benefits. While it looks like one caused the other, the economy was going to tank and the signs were there as early as 2000.

Some want to blame Bush, who didn't help, but the majority of the blame should be placed on the shoulders of ol' Bill the horn dog for some of those tariffs he passed. I like Bill, but some of those were farking stupid and it made moving jobs overseas easier.

If the economy crashed because people are making $7.25/hr, then capitalism sucks.

In the particular field I am in, minimum wage does not mean a whole lot. Even the guy that does little more than sweep the floor makes above minimum wage.

I think the Sevice Industries are the ones hit hardest by mandates on minimum wage. That includes restaurants that do not work on the tip system, most small strip center shops, large retail outlets, such as Grocery Stores and "Big Box" outlets.

Companies that are on the manufacturing end of the scale in reality have few jobs that fall into the minimum wage sector.

I agree with Doove. If a particular industry's profit margin is so slight, and your labor force so unskilled, that a slight rise in minimum wage results in catastrophy, then there is something wrong with the system.

If the economy crashed because people are making $7.25/hr, then capitalism sucks. Originally Posted by Doove

I agree with Doove. If a particular industry's profit margin is so slight, and your labor force so unskilled, that a slight rise in minimum wage results in catastrophy, then there is something wrong with the system. Originally Posted by Jackie S

+2

I knew that would bring the commie socialists out.


Never said that was what caused the economy to crash and it sure wasn't the amount.
You commies never look at the root cause which is socialism.
The fact of the matter is an employer will pay what he has to pay to get an employee to work and do the job that is needed. The other driving factor is the competition in whatever business they are in and what it takes to break even. For those that have never run a business that is what has to be known before you can realize any profit. A person that is capable and produces half again as much as another worker is worth at least hafl again as much but when the government sets the wage why should a person bust their ass to produce.

No the economy did not crash because of a minimum wage increase but it sure shows the commie socialist thought process of some.

Obama has been the best President since Jimmy Carter to curb the influx of illegal aliens.

The cost of goods and services only went up a small percent because of the minimum wage. The rest of the cost increases are the result of Obama printing money and the resultant inflation. This is as easy to see as well the ears on Obama and the leading indicator is that the media says very little about it.

I knew that would bring the commie socialists out. Originally Posted by The2Dogs

Me thinks your second post in this thread was predetermined no matter what responses you received to your first post in this thread.

I knew that would bring the commie socialists out.


Never said that was what caused the economy to crash and it sure wasn't the amount.
You commies never look at the root cause which is socialism.
The fact of the matter is an employer will pay what he has to pay to get an employee to work and do the job that is needed. The other driving factor is the competition in whatever business they are in and what it takes to break even. For those that have never run a business that is what has to be known before you can realize any profit. A person that is capable and produces half again as much as another worker is worth at least hafl again as much but when the government sets the wage why should a person bust their ass to produce.

No the economy did not crash because of a minimum wage increase but it sure shows the commie socialist thought process of some.

Obama has been the best President since Jimmy Carter to curb the influx of illegal aliens.

The cost of goods and services only went up a small percent because of the minimum wage. The rest of the cost increases are the result of Obama printing money and the resultant inflation. This is as easy to see as well the ears on Obama and the leading indicator is that the media says very little about it. Originally Posted by The2Dogs

The minimum wage should be abolished. The federal government does not have constitutional authority to set a minimum wage. The real value of a person's labor is the market value. When you sell your house, the price you get is market value. A great athelete may get paid millions of dollars a year. He's worth that much because the market sets the value of his labor. No one forces the team owner to pay him anything. Having a federal minimum wage is part of having a centrally controlled economy. That sort of system never works. Market economies are always more successful than socialized centrally managed economies. The invisible hand of the market works better than the iron fist of the government.

To address 2Dogs, I am far from a commie socialist but in this case I don't think the 7.25 number caused this particular crash. The starting wage at McDonald's before the raise was 8.00 in most areas. That is generally considered the "real" minimum wage. Next time you visit a fast food joint, just casually ask a manager what they pay to start. Most of the time it is around $1.00-2.00 above minimum wage. In some poorer neighborhoods though, the rise in minimum wage did cause spikes in unemployment among the unskilled labor force. This is comprised mostly of those under 21. So the minimum wage, designed to help the unskilled, does cause a rise in unemployment among the unskilled. Unfortunately, a disproportionate number of these are African-American and Hispanic. The law of unintended consequences strikes at the liberal heart again.

That said(written), this crash was caused largely by laws passed in the 90s that over extended credit in the housing market. That caused a construction bubble around 2005 which imploded. Consequently, the credit markets tightened considerably as defaults began to occur and that snowballed into the crash. In past business cycles when the economy slowed down, interest rates dropped and businesses borrowed at lower rates. In this crash, interest rates dropped but because banks were damaged (through their own fault) they have chosen to tighten business credit which hinders any job creation. Alternatively, had the government allowed the banks to fail (i.e. go into chapter 11 bankruptcy, reorganize, and emerge), the post bankruptcy institutions would have been able to increase business lending. Currently, until these TARP banks clear their books of underwater mortgages, their capital requirements will hold back business lending and private sector job growth.

I did not say it CAUSED the crash, my point is really about government control and how unintended results MAY happen because of it.
Can you prove that this was NOT a contributor to the cause?
Do you think it was a single thing that caused this economic collapse or a soup of things.

The discussion isn't just about "the minimum wage" but about government invading where they should not or call it social engineering if you want.
This is much like the issue with housing that created the two federal government charted agencies called Freddie Mae and Fannie Mac that were created for social engineering. Why is it the job of the federal government to guarantee loans. Same as with the student loan program. More social engineering.

I worked and paid my way through college without ever taking out a single loan or getting government assistance.
I did get my house on a FHA loan but it was the worst mistake of my life and I would never do that again. I got out of it as quickly as possible and did not lose my hose in the process. I sucked it up and cut my spending until I could afford to buy my way out.

So in light of what has happened over the past years, is the minimum wage as a social engineering project beneficial or damaging? If you cannot prove that it is not a contributor to the collapse how can you say it is a good program.

I find it fascinating how many people cannot survive without the government telling them what to do.

Raising the minimum wage didn't single handedly cause the crash. As with all social engineering, you can exaggerate the numbers and see if it is truly a win-win situation or political folly. For example, suppose you raise the minimum rate to $1000.00 per hour, what do you think will happen? If your uneducated, your immediate thought is "o wow, I'm gonna be rich", if your educated, you know better.

I did not say it CAUSED the crash, my point is really about government control and how unintended results MAY happen because of it.
Can you prove that this was NOT a contributor to the cause? Originally Posted by The2Dogs

It sounds to me like your point is.....you have no clue, and because it might have, you're against it....but even if it didn't, you're against it. Or something.

Doove, where do you get off saying that I have no clue.
Are you that mentally challenged to only be able to come up with a lame ass retort like that?
Come on dude and put some of your remaining unwashed brain to use and think about it a bit.

The minimum wage should be abolished. The federal government does not have constitutional authority to set a minimum wage. The real value of a person's labor is the market value. When you sell your house, the price you get is market value. A great athelete may get paid millions of dollars a year. He's worth that much because the market sets the value of his labor. No one forces the team owner to pay him anything. Having a federal minimum wage is part of having a centrally controlled economy. That sort of system never works. Market economies are always more successful than socialized centrally managed economies. The invisible hand of the market works better than the iron fist of the government. Originally Posted by joe bloe

Great thought! Penetrating as it is full of prunes (and the end result of their action on the digestive tract). The "invisible hand" of, say, those who intentionally hire illegals in order to game the market's supply of labor, thus artificially keeping lower end wages depressed? No supply without demand, big boy.

To the OP: Your premise, to draw out the "commie socialists," I suppose would mean that anyone who would answer "no" to your original, as written question then can look forward to incurring your wrath, since you and only you, like all true parriotriots, have the market cornered on whatever you think it is you have cornered, facts notwithstanding.

How do we get you TPers and other reactionaries out of middle-school thought processes?