Do you support raising minimum wage to $9? I'd like to hear someone explain how this would help end poverty.



Basic economics and finance tell us that "poverty" is a defined income level that is a relative value compared to middle class, upper class, etc. It is important to note that this is NOT an absolute value. For example, take the current "poverty line" and raise the cost of goods 10%, you've just change the poverty line.



That being said, if you raise min wage, you will effectively raise the cost of goods. McDonald's isn't going to take a profit cut just because they have to pay you $9/hr instead of $8. They will raise their prices. Common sense.



Now take this one step further, the rest of the pay scale isn't going to want their standard of living to be lowered. After all, burgers cost more now! So employers across the board will have to raise pay rates. Even McDonalds. The burger flipper with 2 years experience who worked his way up to $9 through raises, isn't going to be content making the starting wage again. So his pay rate will have to be increased accordingly.



I know, some employers won't do this "fairly", but pay rates will creep up eventually.



I don't see how you can end the class system in a free society. The middle class are motivated to work hard to live "better" than the lower class. The same extends to the upper class.

 

I think it will end up bringing the middle class a bit closer to the poverty line. Those currently classified as middle class will probably be the last to get a raise in that scenario you just gave. The only way it would help the poverty issue would be if big business absorbs the extra labor cost and prices remain stable. Then those on minimum wage would have a better standard of living. Now, I could see the big guys like Walmart and McDonalds being able to absorb that, but many of them are already paying a bit over minimum anyway. However, what about the small businesses that are already running a small profit margin. They will be forced to do something. Don't they say small business is the fuel for our economy? Not good I think.

 

Most small businesses thrived in the Bush era. 8 years worth.



Most successful small businesses shut down after 2008.



More small businesses will shut down if they raise minimum wage (ex. chef makes nearly as much as waiter/busser/host?)



Conglomerates will unite and rule over all. Matter of fact, we see this now with U.S. Airways/American Airlines. More to come...

 

This idea is mostly to "help" union workers with salaries set at multiples of the minimum wage. Their numbers are dwindling, but they sure know how to turn out rabble rousers for an election!

 

I honestly didn't know there were that many who had their salaries set like that. That makes it a bit more clear on why the democrats are pushing for that so hard.

 

The worker who was previously on $8 per hour can now spend an extra $1 per hour on eBay though, until prices rise. Even though the poverty line moves with minimum wage, it means that the workers are being paid a higher absolute amount. So when they are looking at goods that aren't priced according to the domestic market, they can afford more.



As far as wage rises go, minimum wage is a pretty nice one to go for. Most people on minimum wage aren't living comfortably.

 

Never heard of that and I use to negotiate union contracts. They usually go by the industry average. Of course if your industry average is the minimum wage the union is really screwing you.

 

Red Raspberry, nevermind I didn't say anything and don't go gettin ideas! It is apparently not the norm, but it does happen that contracts get wages fixed at multiples of the minimum wage. There are also contracts that have automatic raises if the M.W. gets too close to the lowest agreed-to wage, so the membership gets a union-minimum wage somewhat higher than the national minimum.



wheel_of_steel, minimum wage isn't SUPPOSED to be a living wage. Minimum wage is for students and/or people just starting out - then most people get raises. My first job started at the M.W. and I got pay raises the longer I worked there, to the point of being something like 20% over the minimum in under a year (then I left). If you are working two or three minimum wage jobs for more than a few months, you are failing. If you are not gaining knowledge/skills/experience and then getting a better paid job, you have missed the boat in a big way.



A local economics/marketing professor said it best: If you aren't making $100k/year in America, it's because you either don't really want to, or you suck.



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quick google search:

63 percent of the minimum-wage workers in their sample were employed at higher-than-minimum wage jobs 1 year later. Also...only 15 percent...after three years, “which suggests that long-term minimum wage employment is rare

 

Hey, I don't make the stupid people. But we better look after them because it really sucks when the gas station keeps getting held up.

 

Broke and criminal are not synonymous. There is a cultural problem in America, and throwing money at low-wage workers is not going to fix how they were taught to treat people.