Steve,

That's one of the little talked about problems with socialized anything. There is exactly zero incentive to be good (or better than somebody else) at something because everybody gets paid the same amount. Not good at all.

If you talk to anybody from England, you'll quickly find that if they want good or timely medical care, they go outside the system and pay market rates themselves. The same will be true here. Remember, our elected officials in Washington have their own healthcare system - and it's not Obamacare at all.

 

eliminate minimum wage and the unemployment rate would go down.

 

Know if from trolling around that section ( smart Grid ) of the industry.

A friend in CA is at a competitor of theirs ( or similar but different target market ).

CA has a few alternative energy programs in motion, but they are not what the current administration wants.

 

Socialized anything is on par with unions at some companies.
The battle cry " Can't tell the difference from my house"

If you talk with anyone from CAN, if you do not have the additional coverage insurance from your employer, you are screwed.
This is similar to what Medicare Part F ( from United Health or the likes) is to Medicare. Pays for the stuff Medicare does not pay for. Thing is in CAN, it is paying for getting a fiberglass cast instead of a plaster one, crutches ( I was shocked when I was told this by a CAN ) are 2 that come to mind.

 

Not sure I follow this thought.

Would eliminating min wage only effect those that earn min wage now ?

Just trying to follow the logic, and all I see is lowering the pay to the market conditions on the entry level side.

Nothing in this would increase hiring at jobs above min wage.

This is an opinion, not fact on my part.

I am just looking at 1999 when UE was in the 5% range, and McD had to pay 10.00 per hour to get people to take their job over one at BK.
Now that the pendulum has swung the other way, it is a case of having more people applying for the jobs than job openings.
Not saying this would cause the wage auctions that were common in the late 1890s and early 1900s ( prior to the new deal ), where the lowest offer got the job.

 

Steve, give this a look: http://mises.org/daily/2596

 

No it should affect other people also in that it creates other jobs(although most of the jobs that are created would pay below minimum wage)

Yes it could lower that wage for entry level but create new jobs at the same time so its a trade off. There may be other benefits that Im not completely studied on.
May be true Im not totally sure. If companies can hire people for what they're worth they can increase profitability. Maybe then they could afford to hire more specialized people at higher wages to make the company more efficient and profitable.

 

This is the part where I get lost.
My logic ( and that could be using the term loosely ) is McD needs 10 people per shift.
If there are 10 people there with minimum wage, if this was removed and they all took a 2.00 / hr pay cut, does that mean the owner would have 20.00 per hour in wage cost freed up, so he would hire 2 more people and still be ~ 6.00 to the plus side on cost per hour in wages, or would the owner pocket all 20.00 per hour gained ?

My thought is he is going to pocket the 20.00 per hr in wage money that got freed up.
Why have 2 more people per shift if the work can be done with 10 ?

This is the reason why I got removing min wage would open more jobs.
Sure there is a certain small ( my opinion ) percentage of jobs that will open up if this happened at other examples. The case where someone is working 3 people as 3.5 or 4, he might get another person to make the shift go easier.


I am counting this as only wages out of the gate.
Workmans Compensation insurance for the employer would go up as this is charged as per employee in a job category, not per employee's wage per hour.
So 3 people working in a warehouse @ 8.25 / hr is cheaper workmans comp ins than 4 people working @ 6.00 / hr ( trying to hold the wage total at 24.00 for the shift for the example ). The ins is per person per job hazard rating.

Social Security and Medicare are 6.2 % and 1.6% per employee wage total. If you have 3 people @ 8.00 / hr or 4 people @ 6.00 / hr the dollar amount the employer pays is the same, so this is a non issue.

The unknown is the "trip hazard" part, if you can have 12 people on a shift, are they more effective than 10 or are the additional 2 getting in the way ? That is job by job question and answer.

In the bigger picture, how many of the warehouse job examples where 25% more people ( 4 vs 3 ) are going to be hired to make a serious dent in UE rate ? Is this a 11% real number to 10.5% real number change or 11% to 9% ? Think the only way you know is by doing it and see what happens.
My opinion is enough companies are scared about what happens next year, they hold status quo, and nothing changes. Could be wrong about that.


This is true. If someone is only worth 6.50 / hr they can hire them for the pay that the job demands, not some artificial floor.

Don't know if this impacts the bottom line enough to create a 15.00 / hr job ??

 

Or he could use the 20 dollars per hour in savings to buy other equipment or make his products cheaper. In other words reinvesting in his business. If he buys more products to make his business run more efficient(using less product to make the end product or equipment that lasts longer) he is creating jobs for the people making those products.

The rest of your post brings up some good points too. Heres another point. If we eliminate minimum wage why would someone take a job for 5 or 6 an hour if they can make 8 off the government? They either wouldn't or they would in order to maintain a job, learn skills for promotion or be putting in time for that promotion or to maintain a job long enough to switch to a better job(lot easier to get another job if you currently have one)

 

Valid point. I was going at it from a McD / Warehouse POV.
If it is a manufacturing case, and the company's cash flow stopped them from getting a loan for new equipment, this would help out. Again if not from the manufacturing company that is buying the equipment, the company that builds the equipment ( we can only hope it is made in the US ).

That is a problem in itself now.
If they can make 8.25 . hr as min wage, and somehow hit 8.00 on UE Ins, that is a broken system.
The new jobs bill ( the GOP one ) the UE ins extension was agreed to, but it had reforms added to it. I can only speculate that this was to stop the 3 year of collecting UE Ins type cases.

Don't know how much a reduced / removed Min wage would push someone to get training to get a better job to make more ( on a broad scale ).
The term living wage keeps getting tossed around with minimum wage. Some how the 2 have been melded together, and are considered one in the same by a percentage of people.

 

Just got a chance to put some serious concentration towards this URL.
Prior I did the gloss over, which was asking for trouble.

So it seems by me not being an economist ( or thinking I am one ) I can come up with the same half baked ideas Ellen Dannin does. Given I am not a self proclaimed expert in labor laws of New Zealand, I can still make uninformed decisions. Unlike Dannin, I only have an opinion ( not fact ) and won't stand my ground on an opinion only.

Logic ( even mine ) would say when minimum wage is increased, that companies starting something new ( or even having turn over in an existing running business ) will only have a budget of x amount for labor costs ( taking into account the company share of SS & Medicare, benefits and workmans comp ins ).
If the minimum amount they need to pay goes up, this has a magnified increase on the company side ( 10% increase in the hourly wage also needs to have SS, medicare, and paid holidays included in the cost ).
Makes sense.
This is what the NJ to PA part showed.
NJ minimum wage goes up, the jobs available drop, as companies only have x amount to employ people, and that is divided by the FTE cost per hour and produces a number of people they can have on payroll. The cost for a cup of coffee at McD has a loaded labor cost to it. If the minimum wage keeps going up and the price of that cup of coffee does not change, what happens ? Easy enough.

The creation of minimum wage caused people to be out of a job, same case as above ( as creating it has the same impact as increasing it )
Only a pool of x amount for labor, increase the labor costs and the quotient goes down. Basic math learned in primary school shows this.

The part I did not see ( or missed ) is something that says lowering or removing minimum wage will create jobs.

There are case points to both sides.
If 10 people is a full shift at McD, are they going to hire another 2 people if the minimum wage drops by 2.00 per hour, due to having a lower divisor or is it going to be a case of tripping over people / pocketing the money.

The other side of the coin is where a shift has 3 people on it, and they are working over time ( working 3 people as 3.5 or 4 people ).
This could result in a new employee if the divisor is lowered as the overall labor cost would be the same ( not paying out at 1.5x rate for the OT equals another person at straight rate.

If I did a good enough job at reading it, the premise of the studies done is raising minimum wage reduces entry level positions, so lowering must increae it.

I have both sides of the coin shown ( the pocket it, and the new job creation / new equipment purchases with lowered labor costs so this creates jobs at the equipment mfgr ), so I am still out on what would really happen if minimum wage would be lowered / removed.

I guess the only way to prove it is to have it happen and see what the results are.
Not too sure with the current administration and make up of the 112th congress if any company would willing spend money if it was lowered.
If the composition changed, there would be more belief in what was happening for companies, and they might cautiously start to hire / purchase equipment.

Then again, if the current administration gets round 2, I could see contraction very easy, does not matter what happens with minimum wage.