New estimates of the effects of the minimum wage

A large literature has examined the effects on employment of raising the minimum wage, with different researchers arriving at conflicting conclusions. The core reason that economists can’t answer questions like this better is that we usually can’t run controlled experiments. There is always some reason that the legislators chose to raise the minimum wage, often related to prevailing economic conditions. We can never be sure if changes in employment that followed the legislation were the result of those motivating conditions or the result of the legislation itself. For example, if Congress only raises the minimum wage when the economy is on the rebound and all wages are about to rise anyway, we’d usually observe a rise in employment following a hike in the minimum wage that is not caused by the legislation itself. UCSD Ph.D. candidate Michael Wither and his adviser Professor Jeffrey Clemens have some interesting new research that sheds some more light on this question.

Clemens and Wither study the effects of a series of hikes in the federal minimum wage signed into law in May 2007. The first of these raised the minimum rage from $5.15 to $5.85 effective July 2007, the second from $5.85 to $6.55 effective July 2008, and the third from $6.55 to $7.25 in July 2009. They note that such legislation would be expected to affect some states more than others, since many states already had a state-mandated minimum wage that was higher than the federal. They therefore chose to compare two groups of states, the first of which had a state-mandated minimum wage of $6.55 or higher as of January 2008, with all other states included in the second group. The hope is that this gives us a kind of controlled experient, with the federal legislation effectively raising the minimum wage for some states but not others.

The hike in the federal minimum wage should also matter more for some workers than others. To allow for the latter possibility, Clemens and Wither considered two different groups of workers. The first group had an average wage in the 12 months leading up to July 2009 that was below $7.50, while the second group had an average wage over this period between $7.50 and $10.00. We would expect the legislation to matter more for the first group than for the second. The quasi-experiment is thus to compare the change in wages between low skill and slightly higher skill individuals between states that were affected by the federal legislation and those that were not.

The upper left panel of the figure below summarizes the experience for workers in the first group (an average wage over August 2008 to July 2009 that was below $7.50). The dashed line follows individuals in states that already had a state minimum wage above $6.55 as of January 2008, while the solid line tracks people in states where the raise in the federal minimum wage would have been predicted to have a binding effect. The heights of the lines indicate the fraction of individuals in this group who were employed and earned a wage during the indicated month that was between $5.15 and $7.25. Prior to the hike in the federal minimum wage, this fraction was about 20% in the first group of states and about 40% in the second. After the final hike in the minimum wage, the fraction was about the same for both groups of states. The legislation thus had its intended effects of significantly raising the wage for low-wage individuals in states that did not already have a higher minimum wage.

The upper right panel follows individuals whose average wage over August 2008 to July 2009 was between $7.50 and $10.00, reporting the fraction within that group that earned between $5.15 and $7.25 during the indicated month. These are individuals who at some time before the final minimum wage hike had a much better paying job, but nevertheless took a low-paying job during the particular indicated month. Of course these numbers are much smaller than for the upper left panel. But it was still a little more common for the slightly higher skilled individuals in the low-minimum-wage states to take a job paying below $7.50 prior to the final hike in the federal minimum wage, with this small difference between states again disappearing after the final federal hike.

Left column: individuals whose average wage between August 2008 and July 2009 was less than $7.50.  Right column: individuals whose average wage was between $7.50 and $10.00.  Dashed lines: states whose minimum wage as of January 2008 was $6.55 or higher.  Solid lines: other states.  Top row: fraction of individuals within the indicated category who earned a wage during the indicated month that was between $5.15 and $7.25.  Bottom row: fraction of individuals within the indicated category who were employed in the indicated month.  Source: Clemens and Wither (2014).

Left column: individuals whose average wage between August 2008 and July 2009 was less than $7.50. Right column: individuals whose average wage was between $7.50 and $10.00. Dashed lines: states whose minimum wage as of January 2008 was $6.55 or higher. Solid lines: other states. Top row: fraction of individuals within the indicated category who earned a wage during the indicated month that was between $5.15 and $7.25. Bottom row: fraction of individuals within the indicated category who were employed in the indicated month. Source: Clemens and Wither (2014).

The second row of the figure summarizes the fraction of each group that were employed in each of the indicated months. Low-wage individuals were more likely to be employed in any given month in the low-minimum-wage states before the rise in the federal minimum wage, but this difference disappeared after the final hike in the federal minimum wage. By contrast, one doesn’t see much difference in the employment experience of slightly higher-wage individuals across the two groups of states as the federal minimum wage changes.

Clemens and Wither examined these differences using a number of statistical approaches. The figure below focuses on the group of low-wage individuals, that is, people whose average earnings over August 2008 to July 2009 was below $7.50. The green x’s come from a regression that tried to predict whether an individual in that group would have earned a wage between $5.15 and $7.25 in any given month. The regression includes state fixed effects (the average experience of people in each state may be different), time fixed effects (the average national experience might be different in each month), individual fixed effects (the average experience of individual i might be different), a measure of house prices in state s in month t, and the possibility of a different average experience for each month in states that had a lower state minimum wage in January 2008 compared to others. The green x’s plot the values for the last group of coefficients for each month, and again show the expected result– the hike in the federal minimum wage successfully lowered the fraction of low-skilled workers who earned a wage below $7.50, as measured by the observed difference between states affected by the federal minimum wage hike and those that were not.

Dynamic estimates of the effects of minimum wage on low-skilled workers.  Green x's denote difference in probability of having a low-wage job between states with low minimum wages and those with high minimum wages.  Blue dots indicate difference in probability of being employed  between states with low minimum wages and those with high minimum wages, with accompanying 95% confidence intervals.  Source: Clemens and Wither (2014).

Dynamic estimates of the effects of minimum wage on low-skilled workers. Green x’s denote difference in probability of having a low-wage job between states with low minimum wages and those with high minimum wages. Blue dots indicate difference in probability of being employed between states with low minimum wages and those with high minimum wages, with accompanying 95% confidence intervals. Source: Clemens and Wither (2014).

The blue dots represent the results from a comparable regression to predict whether one of these low-skill individuals had a job. Clemens and Wither found that the federal minimum wage hike resulted in about a 6% decrease in the probability that low-wage individuals would have a job based on this comparison of states in which the minimum wage hike would have been binding and those for which it would not.

The hike in the minimum wage thus appears to have raised the wage for low-skilled workers but made it harder for them to find jobs. Clemens and Wither conclude:

Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

StumbleUponLinkedInReddit

193 thoughts on “New estimates of the effects of the minimum wage

  1. PeakTrader

    I think, raising the minimum wage to $15 an hour and eliminating tax credits would promote work.

    1. PeakTrader

      Cost of Improper Earned-Income Tax Credits: $10 Billion
      WSJ
      Oct 22, 2013

      “The payments paid out improperly for 2012 were at least 21-25% of all payments, according to the latest report from the IRS inspector general.

      The report estimated that improper payments totaled between $11.6 billion and $13.6 billion for 2012, out of total EITC claims of $55.4 billion.”

      http://blogs.wsj.com/washwire/2013/10/22/cost-of-improper-earned-income-tax-credits-10-billion/

    2. PeakTrader

      “Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.”

      I wonder what effect it had on productivity and GDP?

      There are other factors that can raise employment.

    3. Steve

      “I think, raising the minimum wage to $15 an hour and eliminating tax credits would promote work.”

      Yes, raising the minimum wage to $15 or even $10 alone would promote work. Millions of students, retirees, stay-at-home moms/dads and others not willing to work at $7.25 will enter the labor force at $10 or $15. Are there going to be jobs for millions of more workers at a higher wage? No, they will add to the ranks of the unemployed competing for the remaining minimum-wage jobs. And this is only the start of the problems.

      For more see the book: Ten Unavoidable Problems with a “Living” Minimum Wage from 100% Waste of Your Money to Millions Unemployed
      You can read the introduction and first few chapters for free with Amazon’s look inside feature:
      http://www.amazon.com/dp/B00KYDDLP4

      1. John

        John to Steve,
        Our Consumer Based Economy…….requires customers having money to spend.

        70% of our GDP is Consumer Spending.

        Raising wages increases customer spending……most people today….spend all or most of their wage into our economy.

        Raising wages…and encouraging more people to take on a job…..means more customers will have money to spend in our markets.

        Stagnation of wages may keep inflation low……but the price of poverty on our economy…..is too high.

          1. John

            John to E.Harding,
            Thanks for your chart.

            It shows…..over time…Consumer Spending makes up more of GDP than Government Spending and Business Spending.

            It also shows wages declining as a percentage of GDP……That shows Consumers are spending their wealth in addition to their wage….and you can bet….they get that wealth from mortgaging their assets…..not by choice….but do to the lack of wage growth.

            With Government Spending….and Business Spending declining as parts of the total GDP…..it makes wages even more important for GDP to continue to grow in our future.

        1. Junk Science Skeptic

          Raising all “wages” may increase spending, but raising only the minimum wage will not. Raising all wages would absolutely increase inflation. Only a small percentage of people make minimum wage, so not only would an increase in the minimum wage alone fail to increase spending, it also wouldn’t have much if any effect on inflation.

          The only effect of a minimum wage hike would be to price marginal workers out of the labor market.

          Even though plenty of folks will pay $2-3 for one Mrs Fields’ cookie, they won’t pay $2-3 for a single Chips Ahoy cookie, tasty as they may be. Why would anybody hire a Chips Ahoy worker for a Mrs Fields’ price? Of course, in the cookie world, Chips Ahoy doesn’t throw a tantrum demanding $2-3 per cookie, they become more productive than Mrs Fields’ and make it up on volume.

          1. John

            John to Junk Science Skeptic,
            Raising the Minimum Wage…..has an impact on wages above the MW.

            Only 5% of workers make the MW of $7.25/hr….but….40% of all hourly paid workers…..make $10.00/hr or less.

            The CBO study says at a MW of $10.10/hr….

            16.5 million workers would get a raise.
            900,000 workers would be lifted out of poverty.
            500,000 workers may lose their job due to the wage increase.

        2. Steve

          One can’t just look at the benefit:
          “Raising wages increases customer spending……most people today….spend all or most of their wage into our economy.”
          without looking at the cost.
          The money for increased wages will come largely from customers (often as poor as minimum wage workers or unemployed) and the rest from business owners. These people will have less to spend or invest offsetting the workers spending entirely or nearly entirely depending on marginal propensity to consume and crowding out.
          Then when employment falls since some workers are not worth the higher minimum wage (all jobs not worth $10 or $15 will disappear), consumer spending will fall.

          1. John

            John to Steve,
            When Obama asked for the Federal Minimum Wage be increased from $7.25/hr to $10.10/hr…..A study was made to see the increase in prices to accommodate the $10.10/hr wage…….Walmart was one of the companies in the study.

            Walmart currently pays an average wage of $8.81/hr.

            The conclusion of the study…..was Walmart would have to increase all their prices…an average of 1.4%.
            A box of Macaroni & Cheese would have to increase from $0.68/box to $0.69/box.

            I’m sure Walmart would take the advantage of a wage increase….to increase their prices more than1.4%……but wages will not be their only consideration.

          2. Pookah Harvey

            This study was done over a period that saw the largest drop in economic activity we have seen in almost a century. To extrapolate that into a general rule for normal periods would seem to be ill advised. A real life experiment is described in a NYT article about cross border implications when Washington State increased minimum wage to 50% higher than neighboring Idaho.

            The result for small business was significant. One Washington family restaurant owner was sure he would have to move to Idaho. After the wage hike was implemented the effect was the opposite of what he expected, “To tell you the truth, my business is fantastic,” he said in an interview. “I’ve never done as much business in my life.” Likewise another small business owner stated “We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

            The overall effect was so great that the state’s major business lobby, the Association of Washington Business, no longer fought the minimum-wage law, The other important effect was that neighboring Idaho had to increase wages.
            See the article at: http://www.nytimes.com/2007/01/11/us/11minimum.html?pagewanted=all&_r=0

          3. Steve

            Steve to John,
            I think you made my point. By taking on 1 cent to every 69 cents or $1 on every $69 retail Walmart order to pay higher wages, one is taking the same amount of money from customers – they have one dollar less to spend – and giving it to workers – who have one more dollar to spend, so there is no (or little) increase in spending.

            Sadly, I agree with your point
            “I’m sure Walmart would take the advantage of a wage increase….to increase their prices more than1.4%”
            but for a different reason. Walmart does not need an excuse to raise prices; they could raise prices anytime they want.
            A minimum wage increase will affect dollar stores and small local stores more than it affects Walmart. Walmart currently has competition that pays workers less than Walmart pays workers. Faced with less low-cost competition, any business will raise prices.

          4. John

            John to Steve’s REPLY on 12/11/14 at 7:32 PM,
            You worry…raising the Minimum Wage would force workers above the MW to have less money to spend…and hurt low margin businesses like the 99-cent stories that would have to pay their employees more.

            You miss some of my points….
            The CBO reports 16.5 million workers would get a raise at a MW of $10.10/hr instead of $7.25/hr.
            The increase to $10.10/hr takes years before it reaches $10.10/hr…..There’s no SHOCK to business of higher wages in the first year.
            Those workers will spend that wage increase directly into our economy….they are so poor…they have to.
            All business sales will be increased.
            The inflation caused by this increase is not overwhelming.

            Thanks for your COMMENT.

    4. Danite

      If that’s true, wouldn’t raising it to $100 per hour obviate the necessity of eliminating tax credits, plus promote even more work?

      1. John

        John to Danite,
        There’s a reason……increasing the MW slowly, over time…..is critical to it’s success.

        If you raise the Federal Minimum wage from $7.25?hr to $100.00/hr ……many businesses would simply close their doors.

        I understand you were making your point.

        I agree….raising the MW is a positive move for our economy.

  2. Denis Drew

    >>> Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point. <<<
    I'm so glad that somebody in academia may have noticed that a tiny loss of employment is hardly of any concern to minimum wage earners who get a _relatively_ large increase — we are still talking way under LBJ's, 1968, minimum wage, DOUBLE the per capita income since here.

    The kind of increase — usually a dollar or at most two — that academics typically discuss shift a fraction of one percent of income — too small for their effect on poverty to be measured; lost in the noise. (Ditto for the E.I.T.C.; $55 billion, a quarter of one percent.)

    How about some real THOUGHT experiments:

    If average Walmart nonsupervisory pay were raised to $100 an hour, the price of $10 items would only rise to $15. Walmart labor costs are 7%. Nonsupervisory workers average $12 an hour. $12 X 8 = almost $100. One of the $12s is there already. 7×7% = 49%.

    Double current Walmart nonsupervisory pay to $24 hourly, throw on 25% for benefits to make it $30 and prices rise about 10%.

    Somebody challenged me that raising Walmart prices 10% (at $30 — only 3.5% at $15 min wage) would charge low income consumers $26 billion more a year ($260 billion sales). I pointed out they could take it out of the $560 billion raise they would get from a $15 minimum wage.

    A $15 minimum wage would shift about 3.5% of income from the 55 percent of the workforce who garner 90% of income to the 45% who scratch only 10%. $8,000 average raise X 70 million (45% of 140 million + 5% at minimum now) = $560 billion out of $16,000 billion GDP. BTW, 45% of workforce not going to be sent home over a 3 1/2 percent shift in income share.

    100,000 out of (my estimate) 200,000 gang age, Chicago males are in street gangs – I say because they wont work for a minimum wage several dollars below LBJ’s 1968 minimum wage ($10.95) after per capita income about doubles. A $15 an hour minimum wage might actually put American born workers back to work at America’s McDonald’s.
    * * * * * * * * * *
    ”Denmark has no minimum-wage law. But Mr. Elofsson’s $20 an hour is the lowest the fast-food industry can pay under an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.” A.K.A., centralized bargaining.
    http://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html?_r=0

    $20 an hour + benefits: it’s the truly-free (one common contract) market!

    Somebody better come up with something soon — or else:
    If the top 1% income continues to receive all the economic growth, then, by the time the output per person expands 50% (25-30 years?) the top 1% income will “earn” half of a half-larger economy (25% + 50% = 75% of 150%). By the time output per person doubles (typically 40-50 years) the equation will read 25% + 100% out of 200% = 62.5% of a twice-as-large economy.

    1. andy

      I’m so glad that somebody in academia may have noticed that a tiny loss of employment is hardly of any concern to minimum wage earners who get a _relatively_ large increase

      The number of people earning minimum wage is tiny who get a raise is tiny. 0.7% difference in unemployment is tiny. The number of people who used to earn a minimum wage and now are unemployed because of the legislation is tiny divided by tiny, which probably amounts to quite a high percentage.

      1. Denis Drew

        The number of employees earning the federal $7.25 minimum is 5% of the workforce — 7 million. If you raise the min wage to $15 the number would grow to 45% immediately because $15 is the 45 percentile wage. As some employees got additional raises beyond $15 (some from $15 and some above) the percentage at min wage would go down — technically you might say.

  3. Lord

    The problem I have with this, other than the timing of this around the recession and county rather than state data being a better test, is that the real minimum wage declined for years before this without leading to an increase in employment to population ratio, so this would be an asymmetric effect. The Hungary paper where the increase was quite large but led to businesses largely passing along the costs is in many respects more interesting.

    1. mulp

      In free lunch economics, you only need to reason from a one sided perspective.

      This is all part of a set of free lunch economic premises.

      Workers are not consumers, consumers are not workers.

      Consumption is driven by the wealth effect and tax cuts putting money in your pocket so you can spend, but not on higher wage income putting more money in your pocket to spend.

      Welfare creates an incentive to not work because wages are lower than welfare benefits – but anyone can get a job if they look.

      But higher minimum wages lead to higher unemployment because all the jobs that welfare slackers won’t take because the wages are too low instantly vanish.

      Workers have no costs to work because they do not need housing, clothing, food, transportation, but businesses are sunk by the cost increase of a dollar in a fraction of its labor force which is a fraction of its total costs because businesses must pay for land, buildings, supplies, transport, energy, taxes, and labor or be creatively destructed. Remember, workers are not consumers, but businesses must consume to produce for consumers. Who are never workers.

      1. John

        John to mulp,
        I fine it hard to agree with your logic…..

        The U.S. GDP consists of:

        70% Consumer Spending
        18% Government Spending
        12% Business Spending

        How can you say….”Workers are not consumers, consumers are not workers”?

        Our population of 316 million people require consumption to exist……

        You say….” workers have no costs”……Where do you get such a thought?

        One argument for raising the Minimum Wage…..put more money is pockets of workers (consumers)…..they will spend that money….the Economy will benefit.
        I’m a lay person….not an economist……but raising the MW makes sense to me….We have seen what happens when wages do not go up……

        1. efcdons

          He was being sarcastic. I know it is hard to tell because so many right wingers will say basically the same thing but be totally serious. On the internet it is really hard to tell the difference between actual right wing economics/theology and a parody.

      2. John

        John to mulp,
        You comment brings up an interesting subject…….today’s Government Welfare…..pays more to the worker……than the wage business will pay the worker…..therefore…the incentive to the worker…… is to avoid the penalty of working for a low wage.

        However…..the Pride of the American Worker is more important to workers…than accepting the Welfare.

        The obvious answer…it’s called the carrot vs the stick………is to raise wages to a level above Welfare, and provide a Living Wage……instead of lowering Welfare as a punishment for not having a job.

        The opposition to a Living Wage…..is the profit to business…by forcing tax payers to supplement business low wages…by providing Welfare.

        Business is supported by Republicans…..and their teaching of the Public…..increasing the Minimum Wage…..hurts low wage workers……

  4. Joseph

    So an increase in minimum wage from $5.15 to $7.25, a 40% increase in wages, resulted in 6% less work. That’s an astounding increase in the welfare of low-wage earners. These results make a powerful case for more minimum wage increases.

    1. spencer

      You do realize that you are arguing that receiving a 40% wage increase and a 6% drop in hours worked would make you worse off.

      No wonder you buy the right wing propaganda hook line and sinker.

    2. Patrick R. Sullivan

      How does one come to a conclusion that the harm done to those who find themselves without work at all is outweighed by the benefits to others? Not to mention the morality of the issue.

      1. John

        John to Patrick R. Sullivan,
        Look at history….

        My Grandfather owned a Livery stable of horses….
        You can imagine what the invention of the automobile did to his business….

        Economics is a struggle……trying to do the most good….with the least harm….should be one of our major goals.

        Capitalism puts a pretty high priority on profits.
        Socialism may restrict opportunity….for entrepreneurs.

        Trying to reach an optimum……in a mixture of economic approaches……is showing the difficulty in reaching that goal.

        So far…..the recovery from the 2008/2009 Recession…..has been mostly one-sided.

  5. Steven Kopits

    A bit turgid.

    It would have been better written inductively: “Many studies have been conducted on the minimum wage, with varying results. A new study by Clemens and Wither finds that the federal minimum wage hike of approximately 30% in the late 2000s resulted in about a 6% decrease in the probability that low-wage individuals would have a job based on this comparison of states in which the minimum wage hike would have been binding and those for which it would not.” Then oo on into detail.

    I don’t understand why economists don’t go to McDonald’s or BurgerKing and ask them for actual store by store data. They have it all in their HR systems; all you have to do is cajole it out of them.

    1. Nick

      They have done this. See the famous Card & Krueger paper and some of its replications. The Card & Krueger paper got an unusual positive result on employment, but it may have been somewhat of a fluke given that its replications tend to find results like those above.

      The upside of this approach is that you (maybe?) get better measurements of employment, and you can pinpoint the exact geographic location of employment, which isn’t always available in standard data sets. The big downside is that you limit yourself to a narrow slice of the minimum-wage jobs. You don’t get the maids, or the waiters at the regular restaurants, or the janitor at the school who’s the only minimum wage employee there. What if fast food is just fundamentally different somehow? It can give you a misleading estimate of the big-picture effect.

      1. Denis Drew

        I wasn’t aware Card and Kruger was about fast food. That’s terrific. Fast food has by far the highest labor costs: 33% — compared to Walmart opposite end of spectrum 7%. A $15 an hour minimum wage would add 25% to fast food prices (lowest starting point, highest costs) — compared with 2+% price increase for Walmart assuming no other wages pushed up (just to get ball park — $12 average part and full time wage — 7% costs).

        65% of McDonalds customers go through the drive through (hence, not broke); have to eat somewhere; 25% increase in prices at $15 min wage wont have them bringing peanut butter sandwiches. 5% of workforce getting $16,000/yr raise, 40% getting average $8,000 — 35% of custimers coming through door (me) wont be too broke either ($15 is appox median wage).

        45% of workforce wont be laid off over 3.5$% overall price increase. $8,000 average raise X 70 million (45% of 140 million + 5% at minimum now) = $560 billion out of $16,000 billion GDP = 3.5%.

      2. Steven Kopits

        Nick –

        Of course, you’re right. But what is really at stake in discussions of the minimum wage? It is not about ‘low wage’ workers. My daughter would be a ‘low wage’ worker, but not from a low income household. So the issue is really whether minimum wage laws help poor people, specifically those dependent on these wages for their livelihood, not spending money.

        Therefore, as interested as we are in the aggregate employment effects, we are no less curious about the distributional implications. If I were going to be disparagingly Republican, I’d call the minimum wage law the ‘White Girl Law’, because I suspect it will do a good bit to favor white suburban girls at the expense of black and Latino boys, the latter being our most at risk population group (by a very large margin). We could see these sorts of demographic trends–if they exist–better in the store level data, which McDonald’s conveniently has store-by-store, day-by-day, and employee-by-employee in great detail in its HR files, ready to be downloaded.

        Further, it would be similarly interesting to see the implications for selling prices, volumes, product mix, as well as for store profits and outlet density, since these are the flip side of minimum wage laws. These are the losses incurred for achieving higher wages.

        So, company-level data doesn’t tell us everything, but it would shed light on certain key aspects of minimum wage policy, which, to the best of my knowledge, really haven’t been explored to date.

        1. Denis Drew

          If we are talking $15 minimum wage, $15 is appox 45 percentile wage. Bottom 45 percentile currently take 10% of overall income share.

          I was recently sadly surprised when looking up something called Glassdoor (I think) that most of these retail clerks I see every day in (unionized) supermarkets and drug stores top out at about $400 a week — maybe $500 at most. Seems the norm for most non-college America.

          The official federal poverty line — appox $20,000 for a family of three — is based on three times the price of an emergency diet (dried beans only please; no expensive canned!) — a formula that worked 60 years ago. The MS Foundation book Raise the Floor provides the basis for a realistic minimum needs line based on a minimum basket of goods including taxes in table 3-2, on p. 44. After adjusting for inflation it works out to something like $50,000 a year for family of three that has to pay its own medical insurance ($1,000 a week!).

          Half of Americans work for not much more than half that or (much) less! Assuming they can get 40 hours — the median wage is $16 an hour, but the median income is $26,000 a year ($13 an hour for 2000 hours); seemed to have slipped a gear somewhere.

          100,000 out of (my estimate) 200,000 Chicago gang age males are in street gangs – I think because they wont work for a minimum wage SO LOW — several dollars below LBJ’s 1968 minimum wage ($10.95) after per capita income has since double (since 1968). A $15 an hour minimum wage might actually put (a lot?) more American born workers back to work at McDonald’s.
          http://www.cbsnews.com/news/gang-wars-at-the-root-of-chicagos-high-murder-rate/

          1. Craig

            This would assume that there are hundreds of thousands of unfilled jobs at places like McDonald’s. Reality would suggest that actual market forces keep restaurants such as McDonalds fully staffed. A job opens up, McDonald’s advertises for the position. If nobody wants to work for minimum wage, they raise the wage price. Repeat until the job is filled.

          2. John

            John to Denis Drew,
            Thanks for your COMMENT,

            If workers had more wage to spend…….maybe McDonalds, and other businesses would have higher sales…and hire more employees.

        2. John

          John to Steven Kopits,
          In our Supply/Demand economy……increasing wages should increase Demand….certainly…low paid workers spend there wage to survive.

          Minimum Wage is a floor under wages…..not many businesses will willingly increase wages.
          Currently….only 5% of workers are paid the Federal MW of $7.25/hr……but 40% of hourly paid workers make $10.00/hr or less.

          Many businesses are reporting record profits……that does not support the argument….businesses cannot afford increased wages.

          This article concludes……increasing the MW……does not create a greater economic problem….than the poverty created by low wages.

          1. Steven Kopits

            Really, do you think those Indians working at Dunkin Donuts are going to be in poverty? They are going to have low income, to be sure. You want to know what their kids are doing? Studying their asses off. They will be in the new elite in New Jersey. They are partly already there, but just wait twenty years.

            Low wages do not create poverty.

            A lack of discipline creates poverty. And a lack of accountability creates a lack of discipline.

            Crime creates poverty. Have I mentioned that in Chicago 96% of murders are committed by young black and Latino men? This is the population that matters, because if they’re out committing crime on the street, then those neighborhoods are unsafe, and they will be in no small part creating poverty in those neighborhoods. Now do you think the White Girl Law is going to help them, because I have very serious doubts.

          2. John

            John to Steven Kopits,
            When work does not produce a living wage……that creates poverty.

            40% of all hourly paid workers make $10.00/hr or less……that creates poverty.

            Many people are angry…that tax payers have to pay for Welfare…..but those same people are against raising wages….that would reduce Welfare…..

            You think the kids of low paid workers….will make it thru college and end up with a good life-time incomeS…..you don’t know how hard it is to get a college degree. When I graduated from High School…..only 15% of my graduating class went on to college….On my first day as a freshman, the college president assembled the freshman class……he said…look to the person on your right…..look to the person on your left…..ONE OF YOU WILL GRADUATE.

          3. Steven Kopits

            And yet, and yet.

            Millions of Mexicans gladly surge across our borders, risking their lives and deportation for illegal work that does not even pay minimum wage.

          4. Steven Kopits

            Let’s be clear. If we can intervene meaningfully with at risk populations, let’s do that. A minimum wage law is not that. You want charter schools; let’s do it. You want to decriminalize marijuana. Let’s do that to. But a minimum wage law will help suburban girls at the expense of inner city black and Latino boys. That’s terrible public policy.

  6. Jason Smith

    It seems like it would be difficult to disentangle the disparate effects of the intervening (and largest) recession of the post-war period.

    States that were more strongly affected by the recession disproportionately had lower minimum wages so they would have higher unemployment. There is potential for causality there (states with lower minimum wages got hit by the national shock coupled with a min wage hike), but I’m not sure this counts as a clean natural experiment.

    1. Nick

      In the paper they acknowledge the dual effect and try to figure out whether the bias means they’re understating the effect of the minimum wage, or overstating it. They seem to find that the bias is such that they are understating the effect (in their words, that the effect is “biased towards zero”)

  7. jonathan

    Small effect for the price. As I read Section 3, I realized they relied heavily on a measure, meaning the FHFA housing price index, but my main issue was I couldn’t see a way this analysis doesn’t in the end rely on the internally generated differences in employment measures. Which makes me wonder about its sensitivity and thus whether the effect might fall in a range that begins even in the negative but which certainly could be smaller. Or larger, though I doubt that because I assume they’d report larger.

  8. John

    John to All,
    It’s interesting that John Boehner and other Republicans call increasing the Minimum Wage….”A job killer”.

    When Obama asked the Federal Minimum Wage be increased from $7.25/hr to $10.10/hr……the Congressional Budget Office did a study and issued a report on a $10.10/hr wage…..That report said:

    16.5 million workers would get a raise.
    900,000 workers would be lifted out of poverty.
    500,000 to 1 million workers may lose their job due to the increased wage.

    John Boehner……only mentions the 500,0000 workers losing their job.

    Now….Clemens & Wither say…..for a 30% increase in the MW…..the employment loss would be 0.7%.

    Many in the Public……. believe John Boehner.

    With Republicans controlling Congress……there’s no hope of any increase in the Federal Minimum Wage…and little hope of higher wages going up.

    1. Cliff Hyra

      0.7% of the entire working population- a much higher % of minimum wage workers. Losing a million jobs to give 16.5 million people modest raises (often teens and retirees) while their working conditions suffer and prices for poor consumers rise as a result, is not obviously a good deal.

      1. Thomas

        There are a lot of canards in your short statement. Retirees are retired, and hence don’t work. Teens make up a small portion of minimum wage jobs; a little more than 10% of all minimum wage workers. One meta-analysis study conducted by Sara Lemos found that a 10% in minimum wage lead to a 0.4% increase in general prices. Or in other words, something that used to cost $100 would now cost $100.40. Albeit, Food prices were more sensitive to a minimum wage increase; a 10% increase led to a 4% in food prices. There is no reason why minimum would deteriorate working conditions. There are rules and regulations in place that provide a minimum standard of working conditions.

        If opponents of the minimum wish to sway their audience, then I would recommend sticking to the facts rather than resort to hyperbole and unfounded talking points.

  9. HomeGnome

    How about #5 on my list of solutions?

    Allow Student Loans to be discharged during bankruptcy proceedings.

  10. Rick Stryker

    This is very nice research.

    The estimates from the paper seem consistent with estimates made independently by Neumark and by Mulligan. Casey Mulligan, in his book, The Redistribution Recession: How Labor Market Distortions Contracted the Economy extrapolated Neumark’s 2009 estimate to imply an estimate of 1.2 million job losses from the minimum wage hikes between 2007 and 2009. Mulligan extrapolates the results of his own “Simple Analytics…” paper to get an estimate of 1.66 million. The estimate of Clemins and Wither of a decline of 0.7 percentage points in the employment to population ratio implies about 1.4 million in job losses.

  11. Johnny

    James, congrats, your post is one of your best since a long time. BTW a late happy birthday to you …

  12. Ricardo

    What you never hear in the minimum wage debate is that the whole premise of minimum wage is general price increases as a consequence of inflation are normal. A constantly increasing price level is not the norm in most of the history of the industrial world. The purchasing power of the pound Sterling remained constant for 200 years and that of the dollar for over 100 years. Steadily declining purchasing power in the currencies of the world is a relatively new phenomenon.

    So the minimum wage is a clear indicator of the failure of modern monetary policy (as have been cost of living raises). The real question is can one error be correct by a second compounded error? Rather than fixing the real problem reams of electrons are spent debating the level of destruction caused by bad policy.

  13. spencer

    Maybe it would be worth while to point out what actually happened to minimum wage employment during this period

    EMPLOYMENT
    (000)
    ………………..TOTAL………MIN WAGE…………SHARE
    2007……. 129,767………..1,729…………………1.33%
    2008………129,377………..2,226………………..1.72%
    2009……….124,490……….3,572…………………2.87%
    2010………..124073………..4,361…………………3.51%

    From looking at all of the above discussions you would never guess that minimum wage employment actually increased in the face of a 40% rise in the minimum wage, while total employment actually fell.

    1. John

      John to spencer,
      With the financial crash of 2008 & 2009….it’s hard to apply this data ……to any long term discussion.

      Thanks for the data….anyway.

  14. Andre'

    Efforts such as forcing a higher minimum wage is one of the tactics of liberalism/progressivism for their ultimate goal (and proven historically disastrous) of redistribution of wealth. This effort to throw a bunch of numbers around and using a mish-mash of statistics to justify getting more money from businesses (the rich) transferred to the lowest income population (the poor) is little different in effect to increased welfare and entitlement programs, Obamacare and the many other laws and executive actions that Democrats enact or have tried to enact to use the governmental power of taxation to take monies from those who work to GIVE (not have them earn) wealth to those that don’t. The key words here is the money provided in every case is “given” not earned; just like the increase in minimum wage, there is no corresponding obligation by the recipients to improve their education or even be a better worker; they just get more money for the same job while the rest of us do not. The result; there is no expectation (let alone any metrics specified to measure) that the expenditure results in achievement or even appreciation by the recipients, let alone acknowledgement that this additional boost should eliminate any other cries of haplessness, inequality or cries of “I want more free money” which is why the “Great Society” laws have been such an expensive disaster with no breakthrough lessening of poverty or minority dependency. Increasing the minimum wage will just be stopgap measure before once again we hear “we want more” from the exact same people. The answer should be clear; if you want more wealth then better yourself, work harder, work longer, save and control bad habits like drug and alcohol abuse. That is the secret of success, not depending on Democrats to make laws that take money from successful people.

    1. John

      John to Andre’

      You obviously have missed the Greatest Redistribution of Wealth in the history of the U.S.A.

      Ronald Reagan lowered the max Income Tax Rate from 70% to 28%…..today…that rate is 39.6%.
      Even more damming for America,,, is his teaching the American Public……paying taxes is BAD…..we can borrow money to pay Government bills.

      When Reagan took office….The U.S. National Debt was $970 billion….When he left office, that Debt was $2.7 trillion…….it’s now approaching $18 trillion…..and Republicans will stop any attempt to increase taxes to pay Government Bills.

      You and others have been corrupted into believing……efforts to provide support to others….by taxing the richer….is in your mind….taking from workers…and giving to people that don’t work.
      40% of Food Stamps go to CHILDREN…..another 15% goes to DISABLED and the ELDERLY…..the rest goes to WORKERS that sometimes work more than one job at a very low wage….to the benefit of the businesses they work for.

      You pay no attention that……the top 20% own 84% of our nation’s wealth…..while the bottom 40% own 0.4% of that wealth.

      Businesses have $2 trillion cash in overseas tax shelters….to prevent paying taxes that would help pay our Governments bills.

      I understand….you and others have made up your mind……my hope is…others will read this posting….go read and learn their own facts…..rather than accept untruths without question….

      1. HomeGnome

        See #8 on my list of Solutions…

        8. Repatriate Overseas Corporate Profits and tax at the current rate

        1. John

          John to HomeGnome,
          I agree…..

          Rand Paul’s suggestion…to repatriate those off-shore business profits…..at a tax rate of 5%…is an insult to all tax payers.

    2. Denis Drew

      Andre,
      A higher minimum wage would redistribute from the consumer — not the owner. The idea in a free market is to redistribute as much from the consumer as the market will bear — the same idea for both owner and labor. In de-unionized America labor has no way to extract the max the customer will bear — a reasonable minimum wage is one way to try to extract that.

      [cut and paste]
      ”Denmark has no minimum-wage law. But Mr. Elofsson’s $20 an hour is the lowest the fast-food industry can pay under an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.” A.K.A., CENTRALIZED BARGAINING.
      http://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html?_r=0

      $20 an hour + benefits: it’s the truly-free (ONE COMMON CONTRACT WITH ALL EMPLOYERS — PREVENTING THE RACE TO THE BOTTOM *) market!
      * http://ontodayspage.blogspot.com/2014/05/the-american-amoeba-economy-literal.html

  15. Anonymous

    Spencer,
    This is why we will be arguing about the economics for the rest of eternity. It doesn’t matter what those numbers show you just posted are if you ignore the context of the MASSIVE RECESSION that just happened to be going on at the time. Perhaps that had something to do with more people taking min wage jobs? Just a whacky idea I just had.

    1. spencer

      Maybe, but the claims about minimum wage workers is not based on the supply of workers willing to work at the minimum wage.

      Rather, it is about the demand for minimum wage workers.

      Interestingly, over the years teenage participation has fallen sharply.
      Some blame this on the minimum wage.
      But there have been a host of studies that found the minimum wage was below most teens reservation wage.
      Their time was to valuable for them to work at the prevailing minimum wage.
      They needed the time to do things that would look good on a college application.

      In the years just before the last round of minimum wage hikes more than 90% of employed teens earned more than the minimum wage.

  16. Ed Hanson

    Spence,

    Are you attempting to bring analysis to this topic or just throwing out flack? A link would help. Whichever, here are some questions to think about.

    Shouldn’t the number employed be compared, not to minimum wage earners of 2007, to those who earned $7.25 or less in 2007?
    The tipped worker minimum wage was not raised, how has the number of the employed within that category changed?
    During recessions, is it normal for percent of minimum wage workers to increase? if so, has the increase been more or less than normal?
    Has the full time to part time minimum wage worker ratio changed? Likewise, how many of these minimum wage jobs are second jobs?

    These questions and many others need to be answered before the significance of your stated numbers can be determined.

    Ed

  17. John

    John to All,
    Many people are upset…..that tax payers have to pay for Welfare.

    They accuse these people to being lazy and free loaders….

    To qualify for Food Stamps…..a family of four cannot have a family income of more than $32,000/yr ($16.00/hr)

    Walmart currently pays an average wage of $8.81/hr……Walmart workers are not lazy, and free loaders…..they are workers…trying to support their families.

    What that means is….Walmart pays that worker $8.81/hr……you and I, tax payers, pay that worker $7.19/hr in the form of Food Stamps.

    Walmart knows this….they train new employees how to signup for Welfare……We, tax payers, pay a portion of Walmart’s labor costs.

    Many businesses benefit from this arrangement…..Increasing the Minimum Wage would attempt to correct this situation.

    Obama asked to raise the Federal Minimum Wage from $7.25/hr to $10.10/hr.
    At a MW of $10.10/hr…..the tax payer portion of Walmart’s labor costs would be reduced from $7.19/hr to $5.90/hr…..a little improvement.

    Unfortunately…..Republicans will never increase the Minimum Wage……so, you and I, tax payers, will continue to support business profits…by paying a portion of their labor costs.

  18. spencer

    Actually, we have data on minimum wage employment back to 1979.

    Interestingly, each and every time the minimum rate rose minimum wag employment rose.
    In the other years when the minimum wage was flat, minimum wage employment fell.

    I know, the increase is because the people who were making more that the old minimum wage but less than the new minimum wage are now
    minimum wage workers.

    Another beautiful theory to explain why the first theory was wrong. It is really a shame that no one has the data to test this, right..

    Remember, Milton Friedman said the test of a theory was how well forecast based on it worked out.

    Well, forecast based on the theory that raising the minimum wage leads to less employment has failed this test 100%.

    I find it amazing that we see so many complicated claims about the minimum wage and virtually nobody looks at the actual data.

    The data essentially contradicts the economic theory 100%.

    All this data is freely available at the BLS.

    Google characteristics of minimum wage workers.

    If the minimum wage for tipped workers is unchanged an increase in the minimum wage should have no impact on employees working at the tipped workers wage.

  19. Denis Drew

    Ed; you might find these comparisons interesting. 🙂

    The early 2007 fed minimum wage actually underperformed, Malthus. US population was 200 mil in 1968 when fed min was $11 (today’s money). By early 2007 US population expanded to 300 mil and the fed min had shrunk to $5.90 — to just short of half. Under Malthusian — pre-industrial — theory, a 50% increase in population should have resulted in only a third off wages.
    http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=5.15&year1=2007&year2=2014

    If we could have somehow foretold to Americans of 1968 that by early 2007 the min wage would drop almost in half what could they have guessed would happen: a comet strike, a limited nuclear exchange, multiple plagues? What was going to happen to the expected doubling of productivity — and of per capita income?

    Here is what happened:
    dbl-indexed is for both inflation and per capita income growth (2013 dollars):

    yr..per capita…real…nominal…dbl-index…%-of
    68…15,473….10.74..(1.60)………10.74……100%
    69-70-71-72-73
    74…18,284…..9.43…(2.00)………12.61
    75…18,313…..9.08…(2.10)………12.61
    76…18,945…..9.40…(2.30)………13.04……..72%
    77
    78…20,422…..9.45…(2.65)………14.11
    79…20,696…..9.29…(2.90)………14.32
    80…20,236…..8.75…(3.10)………14.00
    81…20,112…..8.57…(3.35)………13.89……..62%
    82-83-84-85-86-87-88-89
    90…24,000…..6.76…(3.80)………16.56
    91…23,540…..7.26…(4.25)………16.24……..44%
    92-93-94-95
    96…25,887…..7.04…(4.75)………17.85
    97…26,884…..7.46…(5.15)………19.02……..39%
    98-99-00-01-02-03-04-05-06
    07…29,075…..6.56…(5.85)………20.09
    08…28,166…..7.07…(6.55)………19.45
    09…27,819…..7.86…(7.25)………19.42……..40%
    10-11-12
    13…29,209…..7.25…(7.25)………20.20?……36%?

  20. axt113

    So a tiny drop in unemployment versus a large increase in wages

    Hmm, that 0.7% drop seems like a small price to pay

  21. Manfred

    “Hmm, that 0.7% drop seems like a small price to pay”
    Unless, of course, you are among the 0.7% – but who cares anyway? It’s a small price, and we do not know your face anyway.
    There is an alternative solution – how about Congress passes a law that orders 0.7% low-skilled people to be fired from their jobs, and be unemployed indefinitely.
    In this way, we restrict supply, and thus, minimum wage can increase.
    Or better yet – let Congress pass a law so that 15% of the low skilled people are fired from their jobs, and be unemployed indefinitely.
    That is even a more drastic supply restriction, and wages can increase for the rest of the 85% of low skilled people.
    15% is small price to pay, for the greater good of the 85%. Surely, the 15% will understand, right?

  22. Glenn

    “Hmm, that 0.7% drop seems like a small price to pay”

    To be fair, that’s the drop across the whole population. Amongst the proportion actually affected by this change in law, the effect is significantly larger. Depending on how much of the decrease in demand is borne by this population, astonishingly larger, in fact. I would call this a shockingly large marginal effect, even relative to the wage gains.

  23. PeakTrader

    When there’s a shift from quantity to quality, quantity falls.

    Then, there’s more quantity available to expand the economy.

    I suspect, states with lower minimum wages have more businesses that are less productive and can’t compete, unless wages are low.

    If the minimum wage rises in those states, there’s greater unemployment and fewer hours worked.

    However, productivity rises, as some of those laid-off workers are absorbed by more productive firms.

    And, the opportunity cost of extended and overextended unemployment benefits, in a recession/depression, isn’t worth a “cheap” job, even when it becomes less cheap.

  24. Andre'

    I only wish we could hold those liberals financially accountable who push us down a poor course based on good intentions, bad math and wishful thinking like I have seen here when their grandiose promises of better lives for the poor, higher employment and marvelous economic growth turn out to be false. Just like the disaster that Obamacare is shaping up to be, the ones who pushed so hard to get us here, who ignored the others who truthfully said IT WAS A BAD IDEA and put ideology ahead of common sense are nowhere to be found. So once again we have people here who cite fuzzy math and twenty year old unrelated economic trends to try to prove a point that raising the minimum wage is good for America; while (just like Obamacare) if you give away a lot more money IT HAS TO COME FROM PEOPLE WHO WORK. However, while there will be some people that will benefit that are deserving, hard working and very decent people who probably love their mothers and go to church regularly, the net effect is that Americans will simply pay more (a concept that liberals completely endorse) for EXACTLY the same goods or services without any benefit to society or economy. So once again we are at the nexus of the majority paying for an indifferent minority who are placed in a position of undeserved and unqualified taxpayer charity for what? Just so they don’t have to try harder, or so they don’t have to make the tough choices and sacrifice a little to start a career, or so they can stay unappreciative except to the Democrat politicians who keep filling their wallets and purses with others’ money? Yes, a higher minimum wage will help a few deserving people but the concept of paying people more than what the market drives what they are worth is wrong and simply is a liberal ploy to take money out of successful peoples’ pockets and giving it to selected recipients for the purpose of developing a targeted underclass. Welfare (and artificially high minimum wages) are the latest attempt of imposing economic slavery that so far has stagnated this country’s efforts to decrease poverty. John (and others) listen up; the country has spoken and we are tired of supporting an unappreciative and increasingly greedy entitlement seekers and unless you understand that the country has moved AWAY from your socialistic concepts and imperious president, and start moving back towards the center there will be even greater decimation of the Democrats. It is up to you guys to understand that you no longer had the voice you once had, the sixties are long gone, the “Great Society” has been a dismal failure and the trillions spent on the liberal “war on Poverty” has been a bloody waste of a huge chunk of America’s wealth for no good effect. You liberals have failed and the sooner you faced that fact and rejoined reality the sooner we can fix the mess you have made.

    1. Anonymous

      Is there one iota of measurable data in your tirade? Why come to this site if you provide no evidence to support your allegations?

      1. Andre'

        Sure, let me recap the facts;
        – The liberals who pushed so hard to get us here, who ignored the others who truthfully said IT WAS A BAD IDEA and put ideology ahead of common sense are nowhere to be found.
        – If you give away a lot more money IT HAS TO COME FROM PEOPLE WHO WORK.
        – while there will be some people that will benefit and who are deserving, hard working and very decent people the net effect is that Americans will simply pay more for EXACTLY the same goods or services without any benefit to society or economy.
        – the majority pays for an indifferent minority who are placed in a position of undeserved and unqualified taxpayer charity
        – a higher minimum wage will help a few deserving people but the concept of paying people more than what the market drives what they are worth is wrong and simply is a liberal ploy to take money out of successful peoples’ pockets and giving it to selected recipients for the purpose of developing a targeted underclass.
        – Welfare (and artificially high minimum wages) are the latest attempt of imposing economic slavery that so far has stagnated this country’s efforts to decrease poverty
        – the country has spoken and we are tired of supporting an unappreciative and increasingly greedy entitlement seekers
        – the country has moved AWAY from your socialistic concepts and imperious presidentt
        – the “Great Society” has been a dismal failure and the trillions spent on the liberal “war on Poverty” has been a bloody waste of a huge chunk of America’s wealth for no good effect
        – liberals have failed and the sooner you face that fact and rejoined reality the sooner we can fix the mess you have made.
        Those are the facts. I haven’t even mentioned how similar socialism has hollowed out England, reduced Spain, Portugal, Greece and many other countries to looking for co-signers to keep their countries solvent and how pathetically the remaining true Communist countries of North Korea and Cuba are faring. And don’t even get me started about how Peron took a thriving South America country that was vying for the kind of prosperity the US had in the fifties and with Evita reduced Argentina to a permanent third work (kinda like what Jerry Brown did to California.)

        Yes, as with most liberals you want facts until they work against you, then you talk generalities until they fail and then (as you will do now) personally attack the opposition. I think I read that in one of Ayres’ or Piven’s books on “how to” crash America. Except America has turned on you which of all the truths, is the toughest for you to accept…

        1. Denis Drew

          Andre,
          >>> while there will be some people that will benefit and who are deserving, hard working and very decent people the net effect is that Americans will simply pay more for EXACTLY the same goods or services without any benefit to society or economy. <<<

          When — and IF — Americans pay more for exactly the same goods — that is because Americans were paying less than they would have been willing to pay in the first place; probably (in this discussion) because labor had previously had no way to squeeze the market for all it would bear (via good minimum wage or labor union).

          Americans then pay LESS for — actually buy less of — other goods since they have less money to buy the other goods with.

          What happens to the DIVERTED money? It is spent by the employees — and employers — who raised their price to what the market would bear. Instead of being spent by the employees and employers who the money was diverted away from. For example, employees and employers of Target may have more money to spend — while employers and employees of Nordstrums have less to spend.

        2. spencer

          NO!NO! NO! the money does not come from those who work.

          It comes from who have investable income to loan the government.

          That is why it is commonly called UNEARNED income.

      1. John

        John to Andre”
        I accept your strong opinions……but I try to back up my arguments with facts.

        America has financial problems…..the dialog in this blog has tried to address the wage problem.

        My position is……..the MW is a floor under wages…..by keeping wages low….it prevents expansion of our economy.

        John Kennedy had a study done…..to determine what level of Welfare was required to provide a dignified life for the disadvantaged…….it was found that wages did not provide the minimum requirements established by that study…..we’ve now spent 50 years arguing about paid work vs Welfare…..and paid work is still losing that argument.

  25. Ricardo

    Spencer,

    When full-time jobs are converted to part time jobs, are you really surprised that there is an increase in minimum wage employment. Most of these part-time jobs are minimum wage jobs. How many were once full time jobs?

  26. Ricardo

    John,

    Some areas you need to study.

    1. There is a difference between tax revenue and tax rates.

    2. Deficits are caused by spending in excess of revenue. No amount of revenue increase can offset spending at double that rate.

    3. The constitution give the control of spending to the House not the President.

    4. Read “The Seven Fat Years” by the late Robert Bartley of the WSJ

    When you finish this study come back and we will move forward.

    1. John

      John to Ricardo,
      I Agree….There is a difference between tax rates and tax revenues…….but when you change the rate from 70% t0 28%….you can be sure…it’s a threat to any attempt to balance revenues with expenses,

      The result of the Reagan Debt going from $970 billion to $2.7 trillion……is proof….lowering taxes too far…was a mistake.

      The heritage left by Reagan was……we can borrow money to pay Government Bills…….and the Rich will benefit from low taxes….

      In 2011……Mitt Romney had a taxable income of $21 million……he had to remove charitable deductions from his tax form to get his tax rate up to 14%..
      In 2009….John Paulson….the Hedge Fund Manager had a taxable income of $5 billion…..he paid a tax of 15%……

      You’ll have a difficult time……convincing me…..that those tax rates are beneficial to a U.S. Economy that has trillions of dollars in Debt.

      Again….the major damage Reagan did…..was teaching the Public…..paying taxes is BAD.

  27. Andre'

    The “wage problem” is not a problem nor is what I have stated an opinion; Employers pay more when the market dictates and based on the quality of work performed by an employee. An employee that provides consistent and increasing ability and skill becomes more valuable and is subject to raises in pay and advancement. The enforcement of minimum wages makes the reward of higher pay for a better worker very moot just like most companies’ job hiring and advancement have specific quotas and HR hurdles that sometimes disallows the best candidate the position or promotion (a product of “The Great Society” laws.) While I allow that I will not try to dissect stats down to a quarter of a percent like an engineer with a slide rule (oops just aged myself) the basic principle is that money flow is a zero-sum event where if someone is given unearned money (or is given an artificially high wage) that money is taken from someone else, and in business it is usually from the consumer so higher wages=higher prices. However this administration and Democrats in general seem to disagree with this and think that the pool of American dollars are infinite as seen by their increasing our national debt by 70% since 2008 and printing money like it was toilet paper (which it is rapidly becoming.) While increasing the minimum wage can be shown to be maybe helpful (depending on the mixed stats) to the economy, it does nothing to prompt businesses to hire more workers, expand or keep their doors open, which is much more important. If you want to haggle over stats stay here and make pie charts, lists and dredge up incoherent percentages of doldrums go ahead, but if you want to really help American workers, get Washington to stop stifling business and industry with oppressive and purposefully vague regulations and restrictions and promote the need for workers to walk into the door of a prospective employer willing and prepared to work hard, not as many companies have seen, with an attitude of self-absorbed entitlement where they expect high pay and easy days. The MW issue is just the tip of the iceberg with it masking a much deeper cultural schism of the haves being forced to pay out more and more by governmental decree while the have-nots, now fully embraced by a society that tells them they are accountable for nothing but deservingly expectant of others’ wealth, have little interest in properly preparing to enter the workforce, or while in it taking direction, guidance and discipline from their employers. You time may be better spent changing that paradigm verses making it even more difficult for businesses to grow and hire more Americans.

    1. John

      John to Andre’
      For a business to proper……they need customers with money…..
      If you keep wages low….and the worker only has money for necessities…..your constricting any expansion of our economy.

      You keep talking about todays condition of lazy workers taking from the hard working people……a 20% Long Term Capital Gain Tax rate….is beneficial to only one side…some how you have convinced yourself…..becoming ultra rich is okay….because they earned it….but being a worker…you only deserve a low wage…

      You treat Minimum Wage as a freebie to lazy workers……MW is a floor under wages……you think business should be the only one to determine wages…..

      If you don’t raise the MW…..there is no pressure on business to raise wages…..and businesses are very agreeable to allow you and I, tax payers, to supplement their labor costs by paying Welfare for their low paid workers….It’s not taking from the rich…and giving to the poor…..it’s taking from the tax payer ….and giving to the rich……and the inequality between the rich…and the rest of us…proves that point.

  28. Joseph

    “So once again we are at the nexus of the majority paying for an indifferent minority who are placed in a position of undeserved and unqualified taxpayer charity for what? Just so they don’t have to try harder, or so they don’t have to make the tough choices and sacrifice a little to start a career.”

    Yo, Mitt! Is that you? If so, the Democrats would really, really appreciate it if you would run for President again.

    1. Andre'

      If he runs, and said the same things about the “poor” he would find a much larger segment of the population in agreement as the last few years have proved beyond a shadow of doubt he was correct and a lot more people now know that there really is a segment of the population that will support liberalism because they have gotten a healthy taste of living off of others’ efforts and they have no intent to stop. However, if the Dems run Hillary, then THAT would be the best thing that could happen for the GOP and the country as she is actually unelectable and will spend the next eighteen months sorting through Bill’s baggage, Obama’s baggage, her poor performance as FLOTUS (remember Hillarycare 1.0?) and of course the botching of Benghazi as SecState and her support of ObamaCare. Really, she has nothing new to offer and while she will run as “eight more years of Bill” what we will see is “eight more years of Obama!” Please, please, please let her run.

  29. Andre'

    Yes, businesses need customers with a disposable income and discretionary funds; the bulk of whom are career and professional (not minimum wage) workers, so saying that MW workers are essential market drivers is wrong. The biggest part of your defense that simply disintegrates your argument is that your opinion (shared by liberals as a keystone in their plank) that the MW workers are ethically deserving of obtaining additional monies while “the rich” simply are not. Hmmm…let’s look at this, the Americans who have made the right life choices, went and stayed in schools, started and supported businesses and were rewarded for their efforts by successful lives are the “bad guys” while the MW workers that by definition are unskilled are the “good guys?” So we should provide them with more monies ON THE THEORY that helping them (although damn noble) will not further stall the economy and kneecap businesses JUST SO the evil, nasty “bad guy” 1% are forced to part with some of their greedy profits? Is that it? Is that your basic premise that poor Americans are better and more deserving than rich Americans? Sounds like class warfare at its worst. Here’s a counter argument; let the successful rich keep their money but take away their governmental roadblocks so they can reinvest THEIR disposable and discretionary funds into more and better businesses to employ more Americans at wages that are driven by the desire to provide the best priced goods or services possible. How about that? We have pumped trillions of dollars into the bottomless pit of the “war on Poverty” and in 1980 the poverty rate was about 15% and here we are in 2014 and the unmassaged poverty rate is (surprise) about 15%. Maybe we should stop trying so hard to appease a segment of America who have done little with the huge wealth that has been bestowed on them and concentrate on the movers and shakers who turn ideas and dreams into businesses and companies and make money and jobs. If you want to bestow more money on some Americans, the biggest question is the one you never ask yourself; why do you select some but not others as recipients yet never see yourself as narrow-minded or worse?

    1. John

      JOHN TO ANDRE’
      When 40% of hourly paid workers make $10.00/hr or less……you fail to understand the problems that creates in our society.

      You and Reagan have proposed the Trickle Down economic process to solve our economic situation. We’ve tried that for 30 years…..40% of workers make $10.00/hr or less…..even you cannot deny the failure of that…..

      Your description of Class Warfare……misses reality.

      Stockton (can’t remember his first name) was Reagan’s budget director…..he has been critical of Reagan’s tax cuts.
      He has reported that in 1985….the top 20% had a net worth of $8.5 trillion…..his report said…in 2009…that 20% had a net worth of $70 trillion.
      THAT’S CLASS WARFARE……and the Middle Class is losing.

      You and others some how feel…increasing wages benefits the worker….at the cost to business…..WRONG……increasing wages…and increasing worker consumption is a stimulus to business……keeping wages low is a drag on our economy

      EXAMPLE OF CHANGES TO CUSTOMER BUYING POWER
      In Nov. 2013….Republicans cut Food Stamps by $4 billion.
      The week they did that……the executives at Walmart held a stock market analyst’s phone conference….they reported…..they were lowing their sales and profit targets…..because of loss of Food Stamp sales.

      You are right…..slowly increasing the MW is not a major factor in our continuing economic struggle……but the positive direction on that change…sends a signal to the entire population…..we are aware of the problems of low wages…..and we are willing to do something about it…..

      Ignoring the problem of low wages…also sends a signal……profits to the rich…is more important than addressing problems of poverty.

  30. baffling

    if a minimum wage worker still does not make enough money to remove oneself from poverty, then the taxpayer still must provide welfare to that individual. hence the common taxpayer is not subsidizing the individual, the taxpayer is subsidizing a business so that the business does not need to pay a living wage. this needs to change, unless you are happy providing corporate welfare as well. businesses will never up the minimum wage as long as the government continues to subsidize their employment model. fast food, walmart, etc are all recipients of this corporate welfare model. how can one defend this as a free market capitalist system?

    1. John

      John to baffling,
      Thanks for your COMMENT.

      To qualify for Food Stamps….a family of four cannot have a family income of more than $32,000/yr ($16.00/hr).

      Walmart pays an average wage of $8.81/hr.

      That means….Walmart pays that worker $8.81/hr…..you and I, tax payers, pay that worker $7.19/hr in the form of Food Stamps.

      Walmart knows this….they train their new employees how to sign up for Welfare.

      Increasing the Federal Minimum Wage to $10.10/hr……would reduce the tax payer burden to $5.90/hr…..that’s an improvement.

      The last increase in the Minimum Wage was in 2009……But…..Republicans control the Congress…..so there’s no hope the Federal Minimum Wage will be increased in the next 2 years…….or even beyond.

  31. Andre'

    The persistent liberal belief that WE MUST fund and nurture “the poor” in our society is the message that is interpreted by a large segment of the population as a permanent relationship where from now on they will rely on the government for their livelihood and they give up. While you believe that money is a message, it is just money and who does what with it is what YOU want to control. To make the argument that the 1% should have less (as they don’t deserves to have all that money) and want “the poor” to have more (since they are poor they deserve to have more), you make huge generalizations that the “rich” are bad and the “poor” are hard workers frustrated with a lack of employment. In fact with what you want, the “rich” cannot use their wealth to invest in our economy (as we have seen in the last half-decade) whereas the “poor” has been rendered totally dependent on free monies and instead of working to get education and employment, they learn to work the system using people like you to get more and more. Now, it would be nice if those people would read the same economic reports as you so they would know that their food stamp purchases at the Walmart carry such clout, but when half of American households use some sort of governmental assistance, we really ought to acknowledge that we have incorrectly sent a message of advocating well-funded dependency instead of the “message” you mentioned. Really, there is little actual success in using the MW to help grow this economy which should be our primary goal, not just fund another liberal “aww, let’s give the poor more money…” campaign. The message we need to send is what my father did when he hit the shores of America as did many, many immigrants who legally entered the workforce – work hard, save and make the right decisions so your kids can have it better, not blindly funding those who drive their Cadillac Escalade to pick up an EBT card while talking on a free phone. That message needs to be disconnected.

    1. John

      John to Andre’
      Let me clear up one of your assumptions……..I have never called the Rich BAD…….we live in a Capitalistic System…..one of our great freedoms is to excel.
      We show that to the rest of the world……..and many people hear that cry of freedom…and try to come here.

      The facts I have presented…..show how a very low tax rate…..benefits the Rich…..far more than the poor…..income/wealth inequality.

      You keep talking about giving free money to lazy people……this blog is about wages……you must work to receive a wage……You and others, can be critical of those that don’t work for a wage…..but your insults to workers crosses the line……to you and others…..the person that cleans your Hotel room….is unworthy of anything , but the lowest possible wage……..Shame on you…….America was built by workers of all types…..and not all were suited to be an executive…..but they work for their wage…..and deserve your respect.

      The next time you buy a hamburger……thank the cashier…..instead of slapping him or her in the face……….

      1. Andre'

        Income inequality is frequently thrown around but effort inequality or work ethic inequality or working your ass off inequality is seldom addressed. Yes, the successful people that you loathe usually got that way from hard, hard work, long hours, sacrifice of leisure and dedication to achievement; that is where the inequality is, the money is just the punchline, the well earned payoff. You and others like you simply want to take what those people have sacrificed and work so hard to get and when people for one reason or another, whether it was having a child out of wedlock, doing drugs, spending a decade “finding themselves” or simply came up out of their Mother’s basement looked around and said “dude, I want what he has…” WANT TO GIVE IT TO THEM! Hey, I don’t slap anyone in the face, or look down on people who do jobs that I don’t, but I sure don’t think that they are more deserving for access to public funds than others nor do they have a RIGHT to the money of others with more as you seem to indicate. Honestly if you provide a worker with a mandatory five to ten dollar an hour increase in pay, that is not a wage; it is a tax on people who had to fork over that money (like I said before it is a zero-sum game) so only in your dreams is a big bump in MW anything but taking money away from one to give to another because you prefer one and dislike the other. It is the worst bigotry, racism and discrimination possible; you want to pick winners and losers because the rich is bad and the poor are good. You think I slap and insult workers where you my friend make Archie Bunker look like a broad-minded renaissance man, so all things considered, I come out way ahead.

        1. baffling

          andre, not all people were born with a silver spoon in their mouths and endless opportunities. in fact, until civil rights legislation was passed it was perfectly legal to discriminate against minorities in many parts of the country. you don’t think that has left a legacy detrimental to many inner city residents to this day. maybe you need to reassess your view on inequality. did you attend a state university in your youth?

        2. John

          John to Andre’
          This blog is about Minimum Wage…..and it’s impact on our economy…

          Show me how holding down wages….is a benefit to our economy….and will grow our GDP.

          We know…..buy increasing Consumer Spending…..you increase GDP……and increased wages…makes that happen.

          You’ve told us….you consider low paid workers….lazy and unworthy of any increased wage……now show us how NOT increasing the Minimum Wage…..benefits our Economy.

        3. John

          John to Andre’
          I’m concerned…..you don’t seem to understand….our Capitalistic economy…..

          In our Free Market System……Businesses price their sales, based on their costs,and the profits they are seeking.

          Wages is one of the costs to Business…..and they change over time….just as other business costs.

          In Nov. 2014….the average hourly wage increased by $0.09 to $24.66/hr……the average non-supervisory hourly wage increased by $0.04 to $20.74/hr.

          To stay in business……an employer must balance all their costs….and their sales prices….to pay their costs and make their profit.

          You seem to have the opinion….that increasing a wage is, somehow, handing money from the business to the worker….and the worker is the winner….and the business is the loser……that’s not how our economy works.

          When business costs go up…..businesses adjust prices……or they go out of business.

          If you look at how increases in the Minimum Wage are executed……there is a gradual increase over time…the purpose of that….is to allow business to adjust to the increased cost..

          Again….businesses benefit from the increased wage…..their customers have more wage money to spend in their store.

  32. 2slugbaits

    It looks like there is an omitted variable; viz., educational status. This is a strange oversight given that the authors are academics. What do I mean? Well, if it’s true that an increase in the minimum wage reduces employment prospects, then we would expect an increase in community college enrollment. And my understanding is that the effect is quite large; e.g., the numbers I’ve seen suggest that a 1 percent increase in unemployment results in ~3.5 percent increase in community college enrollment. Now presumably going back to school increases lifetime earnings even if only to get an associates degree. But yet the authors conclude that lifetime earnings suffer as a result of a minimum wage. I suspect that part of the problem is the way they extrapolated based on wages earned before a lot of people graduated to career jobs. So as I understand their paper, suppose a teenager can’t find work because of a higher minimum wage. That kid doesn’t just drop out of life. That kid is very likely to start taking classes because the opportunity cost of going to school has just dropped. Are the authors telling us that over the kid’s lifetime he or she would have been better off taking a baseline minimum wage and not going to school??? The paper should have controlled for changes in educational status as a consequence of a higher minimum wage. The point is that in order to make their two main conclusions consistent you have to assume some very implausible educational responses to unemployment. I don’t have any particular problem with the conclusion that a higher minimum wage might increase unemployment; but I have a lot of problems with their additional conclusion that higher (low skill) unemployment reduces lifetime earnings when we know perfectly well that young people tend to return to school if they can’t find work, with an elasticity of ~3.5 percent.

  33. John

    John to All,
    Many people have been critical of our work force not seeking higher education to improve their future earning power.

    This blog is about the benefits and short comings of a Minimum Wage.

    The average IQ is 100…….when I graduated from High School, only 15% of us applied for college……from my college freshman class…..only 30% graduated.

    If you think education is the only answer to improving our country’s wage problem……..the success of your plan will leave many behind…..

    Others are upset that our Government is forcing businesses to pay higher wages…..that’s true….The MW is a floor under wages an employer must pay…..but it is not a ceiling……you do not break the Law by paying a wage above the MW…..many of us think those wages are set by Free Market Forces…..in a Capitalistic economy.

    That still leaves the argument…..in a Supply/Demand Market…..raising the MW increases Demand…and is a stimulus to GDP Growth.

    I’ll listen to any argument you have …..to show how holding down wages…..is beneficial to our overall economy….and will grow our GDP.

  34. Ricardo

    “Sure, economists can use randomized controlled trials to learn more about why some people prefer red to blue, or why we eat junk food instead of vegetables. But this tells us little about the big problems of economics.”
    Peter G. Klein

  35. Ricardo

    John,

    You get an incomplete on your assignment. Admitting there is a difference between tax rates and tax revenue is a step in the right direction. Now consider what that difference means.

    Your research on Romney and Paulson is also a step in the right direction and if you dig deeper it will help you with your assignment. Here is a hint. Treasury Secretary Andrew Mellon in the 1920s wrote that cutting taxes would bring in more revenue because all of his rich friends were putting their money in non-productive tax havens. He understood that by cutting taxes the rich would invest and tax revenue would shift from those who could not afford the tax havens to those who could. The 1920s proved him right. Under Mellon and under the Reagan administration, total taxes by the top 5%, in both absolute and as a percentage of the total, increased significantly.

    Concerning teaching the public to borrow you are a little behind the times. Woodrow Wilson sent tax rates through the roof and initiated massive borrowing by the federal government (ever heard of Liberty Bonds?). This led us into the recession/depression of 1920-21.

    Based on your response, here is an additional assignment added to number 2. There is a difference between debt and tax revenue. Hint: consider spending as part of the debt equation.

    1. John

      John to Ricardo,
      During World War II….the max tax rate was 94%…….with the Country at War…..we created a large Debt.
      That high tax rate continued until 1970…..when the tax rate was cut to 70%
      Reagan then cut it to 28%.

      After the War……we spent a lot of money….
      We rebuilt Europe and Japan
      GI Bill to send veterans to college….
      Eisenhower built the Interstate Highway System….
      Nasa sent men to the Moon
      We fought the Korean War

      And…..with that tax rate high….we paid off the WWII Debt….and did not create a huge new Debt……and the Rich were not ultra rich.

      I agree…..we should prioritize our spending……but there is little argument……those high tax rates benefited America.

      I’m ready to read your reply……that shows how cutting tax rates starting in the 1980’s …….has been so beneficial to our Country…..If you’re one of the ultra rich….I understand your position…..

  36. baffling

    but john, can’t you see how the trickle down policy initiated by saint ronald has been so beneficial to our country? the wealthy have more to spend due to the tax cuts on the high end, but they don’t actually spend it because they have more than enough. they simply accumulate the wealth. how dare you challenge the principles of voodoo economics! it is a basic fact that cutting taxes on the wealthy is beneficial, there is no need for us to support this with data that does not exist. it is simply fact-trust me and accept it!

    1. John

      John to baffling,
      You must add to your COMMENT….

      Reagan is an icon of American History….every thing he did helps people…..uh….especially the Rich.

      Just think……today we have 50 million on Food Stamps….we got that as a great success from those Reagan Trickle Down Economics……the bottom 40% now have 0.4% of our Nation Net Worth….and that share continues to go down…..another success story from cutting those over burden tax rates on the rich.

      Now we have a Republican Congress……that insures….Reagan’s initiatives will continue…..even lower tax rates on the rich…..but….now we can look forward to balancing the Budget by cutting any relief to the poor…..We can look forward to changes in the Trickle Down Economics…..by eliminating the Trickle.

      Thanks for your COMMENT.

  37. Andre'

    Please keep your snide and fourth grade comments about Ronald Reagan limited to comparing him (destroying the Soviet Union and keeping America strong) to our current occupant of the WH who has given more ground, lost more allies and increased our debt by 70% than any other president EVER. You are very quick to insult a man by blaming his economics on the horrible state of our economy decades later as if we have not have had a bunch of Democrats controlling the power of the purse for most of that time. You keep on harping over and over and over and over that higher taxes are the BEST thing we can do and even made a ridiculous statement that the rich were not very rich with a tax rate over 90% – well DUH! The economy then was very, very different and had a much less immediate overlap with foreign markets and had built-in governors so there were better buffers and was much less reactive so trying to compare post WWII American economy to today’s is simply sophomoric (but useful to try to prove a liberal exclamation mark.) Please understand what will happen if achieve what you want which is the purposeful plunge into national mediocracy and mendacity and impose a 90+% tax rate just so the EVIL, EVIL rich can have their come-uppens, lose their wealth so we can make sure the perpetual 15% of Americans in poverty can support their local Walmarts with their freshly recharged EBT cards. Then what? Well you don’t know do you? Will we have a sudden surge in the GDP and an spontaneous growth of economic prosperity as you suggest? But what if we don’t and find out way too late that giving a million people a dollar means very, very little, but a businessman with a million dollars can and usually will reinvest that money to make more jobs and recharge the economy? Will you step up and admit that you were incredibly limited by thought and ideology and helped break the back of America on a liberal whim? Really, your ideology is mired in the past, stuck in on a single focus and one-note song that is lost on the rest of us who simply see the reality that the rich are rich because they work harder and longer than those that are content with public assistance, so they, not “the poor” should be protected. THAT is reality, but liberals like you think if you just give “the poor” enough money, if you transfer enough unearned wealth and offer them sufficient free assistance, somehow, somewhere the 15% of Americans will suddenly decide to be rocket scientists, mathematicians and engineers and join the workforce! Really, is that what you think? How about this; the 15% will take whatever you provide for them and ask (demand actually) for more while having an even less incentive to work. That is reality babe, I suggest you try to live in the real world and not in your liberal tower and you might understand that in all cases taking from the rich to give to the poor makes the rich hire less and the poor take fewer jobs. What color is the sky on your planet John?

    1. baffling

      andre, i find it funny you take offense when somebody comments on saint reagan in a poor manner, but you have no problem inaccurately describing the perspective of liberals and democrats. i feel like i’m listening to rush talk radio hour! remember reagan is the one who cut taxes and blew up the debt-a very inconvenient truth for you i am sure, but something you are going to have to live with irregardless of your rambling rants.

    2. John

      John to Andre’
      Try reading my COMMENTS…..

      This blog is about WORKERS and their Minimum Wage.

      You can input your concern about people that don’t work…..on another blog.

  38. Michael Kenderes

    The main reason DEMs want to raise the minimum wage isn’t for the benefit of anyone but UNIONS! How so? Because many union contracts are tied to the minimum wage. When MW is raised those union workers also get a raise when their contracts are renegotiated. This results in higher inflation, more jobs either going overseas for cheaper labor or eliminated via automation. Actually, in a global economy, our minimum should be eliminated. This would encourage more people to study harder to be more productive in higher paying jobs. This seems harsh but is best for all in the long term.

    1. John

      John to Michael Kenderes,
      Please review the graph is the attached url……that compares Union Membership to Middle Class Income.

      http://thinkprogress.org/politics/2011/03/03/147994/unions-income-inequality/

      Sorry….I don’t know how to make this a hot-link.

      As far as eliminating the Minimum Wage……that’s been accomplished pretty much by Republicans not allowing it to be raised.

      The Federal MW is $7.25/hr ($14,500/yr)…….in Nov. 2014…the average hourly wage was $24.66/hr….but…..40% of all hourly paid workers make $10.00/hr or less.

      I contend…increasing the MW adds buying power to workers and, although modest, increases our GDP….and sends a signal to low paid workers……we’re trying to help.

      Republicans take over Congress in Jan. 2015.
      They hold a press conference.
      They announce…their top two priorities are:
      1)…Lower taxes on the Rich
      2)…Repeal the Federal Minimum Wage.
      You meet a low paid worker……he asks you…..how do these two actions help him financially?
      What is your answer?

  39. Joseph

    Andre: “our current occupant of the WH who has given more ground, lost more allies and increased our debt by 70% than any other president EVER.”

    You will probably be disappointed to learn that Saint Reagan increased the debt by more than 150%. Bush Jr. increased the debt by more than 100%. Obama is a piker by those standards.

    1. baffling

      joseph, this is blasphemous talk about saint reagan and prince bush. it goes against the talking points of the conservative talk radio sphere that republican’s are the protectorate of the financial well being of our country, protecting us against the out of control democratic administrations! please do not repeat such blasphemy, and stick to the script!

  40. Andre'

    This is why I am poking my nose into this coffee klatch of liberal social engineers; because you talk of slanted stats with nobody to throw the BS flag; well it needs to be thrown. You have instructed me that I shouldn’t even be here (very unliberal of you to suppress free speech I might add) because I want to discuss why who gets what so we don’t lose the big picture about IF we should make huge changes to our economy based on penalizing selected Americans and rewarding others based on your very subjective preferences. That includes MW discussion as it is just another attempt to redistribute wealth to take money from “the rich.” In reference to your totally discredited and BS claim the Obama is not completely leading the pack in exploding our debt in a few short years Obama has managed to accumulate more additional marketable debt than all the presidents who preceded combined with the marketable debt of the U.S. government being all debt securities sold by the U.S. Treasury that can be held by individuals, corporations or other entities outside the U.S. government and that can be sold in the secondary market. That is dear old BO’s legacy while Reagan won the cold war. Gee, that must be tough to face; you just want to make up lies about how Reagan did not do great things to and for America but this administration is not the incompetent buffoons that we have seen while racking up an astronomical debt, providing few jobs and shepherding a stagnant economy through a dismal recovery even though for the fist two years liberals owned the presidency, the House and the Senate! Did they sort out the economy when it was at its worst? NO! Obama spent all of his newly minted political currency to construct ObamaCare and push through a TRILLION dollars of spending that arguably did next to nothing! What incompetence! What, Obama’s dismal failure with the economy is still due to the residual effect of the Laffer curve? Really, is that what you are saying?

    Come on people, we are in dire straits because of out of control spending by this administration that you think can be mitigated by making America’s last hope, our industries and businesses, pay and pay and pay either by taxes or a huge increase in the minimum wage to fund every liberal program you can think of to put money in the hands of “the poor.” You people need to step out of the classrooms, stop listening to sycophants and students agreeing with you because if they did otherwise they would not be given good grades and live in the real world. The world where hard work and ambition is good and “the poor” should be helped by good people and charity, not subjugated by systemic welfare that kills any need to better themselves, improve their lives or and in fact makes every disincentive to support a responsible and stable mother/father based family.

    1. baffling

      andre,
      the majority of debt under obama was the direct result of two foreign wars, a significant tax cut for the rich coupled with a major recession (depression), which combined to increase spending (war) while decreasing revenue and growth (tax cuts and recession). you do understand these were major issues, and barack obama was not the cause of these items? these issues were the result of conservative bush policies. it is understood you want to blame president obama for all of this, but you really need to be honest about how these costs were accumulated. you didn’t like the stimulus? a significant portion of the stimulus was tax cuts-to appease the conservative caucus. your rants are simply ignorant repeats of conservative talk radio hosts, who don’t care about the country simply their ratings and income. as you say “we are in dire straits because of out of control spending by this administration” really? prove it. look at the data and then say that with a straight face.

      1. Andre'

        Oh I can say plenty of truth with a straight face including just like most Democrats you try point to the spending done by this administration that has raised our debt to astronomical heights was due to Bush. Boy, that never gets old does it? Yes, Obama was a hapless victim for the six years, unable to cut military spending (oh wait he did), drag us prematurely out of Iraq (oops he did that too) or did not redirect funds from the DoD to his preferential domestic programs (oops he did that too) but you say between your sips of Kool-Aid that Bush was accountable for Obama’s ineptitude at growing our economy. One of you blames Reagan, the other Bush, but nobody thinks that the simple fact that Obama has grown a huge debt, stifled our economy, flat-lined job growth is his fault. Do you know all that does is make you look like a complete liberal ideolog committed to protecting “tax and spend” instead of understanding that socialism is a failed concept that has destroyed or hollowed out every country where is has taken root. I’ll say it again; we are in dire straits because of out of control spend by this administration – coupled with liberal sycophants who refuse to accept reality and try to blame anything and anyone else but a completely discredited socialist concept. Just so you know A million bucks was spent in my county where miles of a paved, underused bike path next to a major interstate was destroyed and replaced with a brand new underused bike path. Shovel ready? Yes it was. Useless and trivial? yes it was. Did the money spent help our economy? No it did not. Oh yes Obama threw tons of money around and if he wanted to increase taxes or abolish tax cuts, then why didn’t he do it when he had two years of Democratic control of the WH, Senate and House? Sounds like you ought to ask how THAT happened. Oh wait, that would show an interest in the truth, not ideology; something not popular with liberals who had such hope in 2008 and less so in 2012 and little by little has seen their expectations wither, but still refuse to understand the world works imperfectly where the best intentions and grandiose social efforts just don’t work with human beings, even hand-picked socialists in charge.

        1. baffling

          andre,
          obama was given a crappy hand to start with and that resulted in a large deficit. if you take notice, the deficit has continued to shrink under obama. he took the bad hand dealt to him by bush and at a minimum turned the tide in growing the deficit. but again i suppose the numbers are not of interest to you. look them up. it continues to baffle me how fools like you can continue to get so irate while refusing to actually look at the numbers.

  41. Ricardo

    John,

    New assignments (you still have an incomplete on the others, but these can actually help you with those):

    1. Do a little research on how many people paid the top tax rates after WWII (WWII itself was unique because the Laffer curve was near 100%. We could not afford to lose the war.)
    2. Study the Laffer cruve so that you can understand why the max point can approach 100%.
    3. Related to 1 & 2, do a little research on inflation and “bracket creep” after the US left the gold standard in 1971.
    4. Read the articleGerman Economic Miracle and Prosperity Through Competition (here is an online version) by the “engineer of the German economic miracle Ludwig Erhard. This will help you understand that the German recovery was in spite of US interference rather than because of it. (There is similar work on Japan but let’s not overwhelm.)
    5. Learn the difference between marginal tax rates and effective tax rates.
    6. Find the effective tax rate for the “rich” during the years after WWII. Hint: You will find it was almost the same for the rich during this time of high marginal tax rates as you found for Romney and Paulson. (That is one reason I was so excited that you discovered this.) Another Hint: Reagan did lower marginal tax rates but eliminated tax deductions and havens (supply-side theory).
    7. Again, to understand the taxes of, what you call, the “ultra rich”, check out the real tax rate of the “ultra rich” (however you define that) versus their marginal tax rates at various periods of high and low taxes in US history – after 1896 will give you a good sample.

    Just as an aside, my interest in macroeconomics (if there actually is such a thing) is not to generate wealth for myself. I realize that the prosperity of the entire economy is more important to my wellbeing than my personal wealth. For example, a rich man in Venezuela is not as well off as a working, poor man in Australia due access to goods and services and to the living environment (this is one of the primary errors of politicians and crony socialists).

    1. John

      John to Ricardo,
      Thanks for your reply.
      I appreciate your knowledge of economics…..much more than mine…..

      I am aware of the some of the difference between marginal tax rates and effective tax rates.
      Many Republicans object to the high Corporate tax rate of 35%……but in 2012….for businesses with $100 million in sales or greater….the average tax paid was 12%.
      You can bet….the GPO will tell the American Public the 35% tax rate…..and lower it.

      My question to you…..
      Reagan lowered tax rates…..in the years that followed that action…..the Rich have become Ultra Rich….the Middle Class appears to not have benefitted .
      What is your explanation for this result? Do you agree with me….those low tax rates contributed to the gap between the Rich…and the rest of us?

      In addition…. I contend……those tax cuts…have exploded our National Debt…..
      Many say Revenues continued to increase….and the problem is….excessive Spending. I agree…Revenues increased…..BUT…..
      I contend……the Government Spending between 1945 and 1980….was not,somehow, less than between 1980 and 2014. We did a lot of big things between 1945 and 1980….
      I feel it is indefensible to argue….that cutting tax rates from 70% to 28% and now 39.6%…is not responsible for our National Debt. Do you have an answer to the fact…..that our National Debt has skyrocketed…..and…..the wealth of the Rich has skyrocketed….I see a correlation….

  42. John

    John to baffling, Joseph, and Andre’,
    Andre’ has strong feelings of issues in our society….and many others agree with him.

    He brings up issues for our discussion…..our responses should be to reply to those issues.

    I try to show my positions by presenting facts presented by people that study these issues….and encourage the opposition to provide their facts.

    These blogs provide the opportunity to have an open debate…..that’s part of the freedom we have in the USA.

    Andre is presenting his side…..I’m glad he is willing to present it…..He has added to this particular debate.

    Thanks to everyone that has submitted COMMENTS……God Bless the United States of America.

  43. Andre'

    Republicans take over Congress in Jan. 2015.
    They hold a press conference.
    They announce…their top two priorities are:
    1)…Lower taxes on the Rich
    2)…Repeal the Federal Minimum Wage.
    You meet a low paid worker……he asks you…..how do these two actions help him financially?
    What is your answer?

    The answers are,

    1. Why is your financial success anyone’s but your own accountability and what have you done to help yourself make higher wages?
    2. The lower tax rate will be offset by a reduction in spending starting with entitlement and welfare reform, so instead of looking for the government for a steady stream of cash, food, cell phones and legal marijuana, so if you want to a better financial situation figure out the right answers to my first question.

    Beyond, life, liberty and the pursuit of happiness, It is up to you, not the government to provide the rest (regardless of what the Democrats say and want.)

    1. John

      John to Andre’,
      The GOP has essentially eliminated the Federal Minimum Wage…..by refusing to raise the current $7.25/hr wage.

      The result of that is 40% of hourly workers make $10.00/hr or less…..with no floor under wages……businesses can ignore any request for increased wages…and for the last 35 years…they have done just that….

      Unions have been destroyed….the individual is alone..in bargaining for his wage and benefits….We have seen the results of that over these years…..businesses report record profits….stock market hits new highs….and 50 million people qualify for Food Stamps because of low wages….

      And your answer is……it’s your own fault…..

      You refuse to show me….hold holding down wages……benefits our economy….and increases our GDP….BECAUSE YOU CAN’T…….

  44. Andre'

    We have gone from the American sweat shops of one hundred years ago to the radical union activism that brutally opposed any dissent and unaligned companies and now we are seeing the decline of unions and the rise of businesses seeing every worker as an individual; neither is perfect, but with modern laws that help prevent worker victimization, I would rather let the market dictate wages versus having excessively high MW requirements as a stopgap to collective baraganing. Businesses need to be able to self-determine a fair wage and that is usually done based on if people are willing to perform the task at the rate. I thoroughly despise the business practices like what was done to lure workers to the WV coalfields and then keep them there by paying them with either a subsistence wage or company credits, and left unchecked is completely wrong so there is a need to protect wages and if businesses cannot ensure that their wages keep pace with the market, then pressure SHOULD be applied. However, that opens the door to what you want which is drastic and business-killing increases in minimum wages that just keep being increased until nobody can hire anyone. So the conundrum is which do we choose; a free market where the employers have the clout and subjectively distribute salaries as the market and their bottom line dictates or place the power with the workers when once hired gets a wage dictated by law, not their performance or ability. Also once enacted I don’t see anyone like yourself volunteering to be held accountable if like (as I suspect) if we make the MW a gravy train and the GDP still slops around like a cow in the mud, that you will take point on reversing the law and fixing the failure. That is the real problem with liberalism; the mess you make has to cleaned up by others. If you think that is not true then look at the policies and actions of Woodrow Wilson and FDR that set up the world for everything from WWII, Vietnam, the Palestine issue and the Cold War.

    Do I believe that the GDP will soar with a increase in MW? I don’t know and neither do you, but I would rather let the market work than chance stagnating our economy yet again because you and other bright and well-intentioned economists did not factor in all the variables for a big jump of the MW.

    1. John

      John to Andre’,
      This is a blog on workers pay……..and the economic impacts of a Minimum Wage for that worker.

      Let’s try to establish parameters in this debate.

      1) For a family of four…to qualify for Food Stamps…..the family income cannot exceed $32,000/yr ($16.00/hr). That attempts to say….the continuing expenses for that workers family is $16.00/hr.

      2) The current Federal Minimum Wage is $7.25/hr.

      3) The combination of the employer paid wage…..plus the Government (tax payer) assistance must total $16.00/hr.
      If the worker’s wage is $7.25/hr……the tax payer must pay that worker $8.75/hr…..for the worker’s family to survive.

      4) The average wage for a non-supervisory worker is $20.74/hr. No tax payer assistance required. NOTE: this is an average wage…not a median wage, where 50% is above…and 50% is below…..the average wage is all wages added together, and divided by the number of workers.

      5) 40% of all hourly paid workers make $10.00/hr or less.

      6) I have not seen any data of what percentage workers make below $16.00/hr (the end of tax payer assistance)…..but….it is expected, to be more than 40%.

      7) Corporations have been reporting record profits….stock prices of corporations have been setting new record highs.
      What that means……labor costs are not high enough to be an insurmountable problem for Businesses. They can pay higher wages…and still make a profit.

      8) 70% of the U.S. GDP is Consumer Spending……raising wages provides more money for workers to by products from businesses….and grow the GDP.

      9) Social Security and Medicare have a long term funding problem…..increased wages provides more payroll tax income to support those programs.

      10) Study report indicates the inflation caused by Walmart’s increase in their average wage of $8.81/hr to $10.10/hr….would be a 1.4% increase in their average price…….Total inflation for Fiscal Year 2014 was 1.7%…….without any increase in the MW.

      11) The CBO reports 500,000 to one million workers may lose their job, if the MW is raised to $10.10/hr.

      From review of these various parameters……I conclude:
      Raising the MW reduces the tax payer required assistance.
      Raising the MW adds to Consumer Spending, increases our GDP, and helps our economy.
      Raising the MW increases payroll taxes and helps Social Security and Medicare funding.
      Wage increases does not cause unacceptable inflation.
      Business profits will continue.
      The U.S. Safety Net will continue to assist any workers below the Tay Payer assistance level…..along with any worker that loses their job….and the GDP stimulus may provide jobs in their future.

  45. Andre'

    Why I like your concept, I don’t think that MW jobs are designed to be the primary employment for a head-of-household and actually discourages workers from establishing careers (requiring self-betterment, education and reduction in self-destructive activities – all good things that reinforcement of a higher low-performance wage could interfere with) HOWEVER, if there were a push to increase wages based on your data what I would add is
    1. Ensure we establish a healthy and established upward trend in economic growth before any changes to MW so there is a much reduced chance of any stalling. We need to give businesses the lead to grow first and not look at their current bottom line as exploitable for higher wages while our economy is still struggling; that could further delay our recovery or further inhibit business expansion with resultant more jobs.
    2. The deal that could be made is a handsome reduction in taxation for businesses to spur growth with a follow-on increase in wages.
    3. IF there was a mandatory increase in MW, it would be tied to a specific length of time before another increase could be introduced as well as a mandatory reduction based on a specified loss of baseline data showing a recession or drop in economic strength. That way if your bright idea doesn’t work and the economy stalls again or fails to grow we can automatically terminate this social monetary experiment (what we should have done with the “Great Society” laws.)

    We both get what we want. If your idea works they we win as a country, and if it does not then we go back to letting businesses set the wage based on their needs, not the current MW law and this argument will be settled.

    Seems fair….

    1. John

      John to Andre’,
      I agree…..we both have the goal of helping everyone.

      Many think I hate the Rich….that’s not true…..our Country has been built by people, that take chances, work hard with their ideas…and become successful.

      I contend…by raising the wage income of workers…..everyone benefits….larger wage income adds to our economy…and workers and business WIN….

      My answers to your points:
      1) Be sure we have a strong economic trend of growth in our economy….before we increase the MW.
      We have had 57 consecutive months of private sector job growth.
      While many Countries are struggling with their economies…..the U.S had 3.9% growth in our GDP in the last Quarter.
      Low wages is a drag on our economy…..it’s time to raise wages.
      Many Country’s response to the 2008/2009 Recession was……cut spending, reducing benefits, avoid stimulus spending……they are now learning the fallacy of that economic approach……we bailed out the banks, and the auto industry….and cut payroll taxes…..so far….we are winning.

      2) When the average tax paid by business is currently 12% ( the tax rate is 35%)…..and they are making record profits……and they are using those record profits to buy back their own stock, instead of expanding their business, and employing more workers…..
      I am in favor of closing tax loopholes….but not in a Revenue Neutral Method proposed by Republicans…until we control deficits…we need to ADD to tax revenue.

      3) You asked for a way out of the MW increase……if the economy falters.
      I don’t know of any proof that a raise in the MW has ever created a Recession.
      In fact….I want to index the MW to the Cost of Living……so we don’t go many years between increases……we’ve seen poverty increase under that history.

      Thanks for your COMMENTS.

      1. Andre'

        So…Let’s recap the recap;
        1. On waiting raising the MW until we have a stronger recovery – NO
        2. On Getting the economy growing better with pro-business tax incentives before we raise the MW – NO
        3. On putting a cap, time limit or end based on poor economic trends to an increase in the MW – NO
        4. On raising the MW as much as possible, as often as you like – YES

        So I say yes to a MW based on a healthy. two-sided compromise and you decline insisting that you have every point your own way.
        What I propose would be a win-win, but like most liberals dedicated to ideology you demand EVERYTHING your way rather that get some of what you want and the other guys gets some of what he wants and the American people wins.

        You have completely discredited yourself as someone looking for an answer that is good for the most people and creates unity and allows BOTH the rich and the poor to have it better; you just are going to keep repeating your mantra over and over, quoting the stats you like and ignoring the data and simple logic that taking money from the rich and giving it to the poor helps America. You my friend are shouting in a vacuum and I seriously hope if you have access to young minds and you are not filling them with your almost incoherent babble designed to paint a picture that the rich deserve to have their money stripped from them and given to the poor – AND THAT WILL GROW THE GDP!!! Good lord, then agree to get the Economy on the rebound (a real recovery not this crappy thing that was the best effort this administration can produce), then have an increase in the MW WITH THE PROVISO that when the economy stalls, it will be reversed back to the levels they are now. Your plan is that the MW always goes up; what is the matter making it dependent on the economy?

        John, when someone offers a compromise and all you do is rehash your talking point you just appear pedantic and small. Open your mind, especially now that America has spoken and have shown the liberals of this country that here is the door; use it.

        1. John

          John to Andre’
          You continue to reply to my facts……with your opinion in the form of your words…..

          When in a debate…the loser realizes he has no facts to support his side of the argument…..he resorts to name calling to distract the viewers from the winning arguments.

          Regardless……Republicans support your side of this debate….and they control Congress .
          The last increase in the Federal Minimum Wage was in 2009……there is no hope of any increase in the MW for at least the next 2 years…… That will make 7 years without an increase.

          History will show how your position either…….. helps our economy and reduces poverty…….Or …..your taxes will continue to be needed to pay welfare payments to additional workers……whose wages cannot possibly support their families.

          1. Andre'

            The telling effect is that you, just like the Dems in Congress, when faced with a compromise to come together, simply refuses to take a little and lose a little to meet in the middle. You demand everybody listens to you, believes your “facts” and that they completely acquiesce to your point of view or if not then it is them not you who is declared the intransient one! Well bub, this Democrat hard left ruddering has paralyzed our government, made our system of government ineffective and polarized our politicians. You simply refuse to listen to anyone, hide behind “facts” when it suits you and then dogma the rest of the time. You act like our economy is good enough to suffer through another setback that a mandatory increase in the MW will cause, but you REFUSE to take accountability if you are WRONG.
            This country is SICK of people like you that demand we “change” but when the change turns out to be disastrous like ObamaCare when after people correctly pointed out the flaws were shouted down by complete jerks who stated “show me the facts” instead of engaging in the simple process of common sense that if MORE people are being delivered health care, with LESS people paying for it, the costs will INCREASE for the people paying for it! With the minimum wage, you want to use pie charts, graphs and twenty year old stats to try to prove that forcing businesses to increase wages will NOT cause higher prices and cause a drag on employment and the economy. And on top of that what I want is for you to agree that IF that happens, we drop the MW back to where it was at, but you refuse to make ANY concessions and want it all. Well, that is why America is tired of you and the rest of the Democrats; you want everything your way and when it fails you either are nowhere to be seen or try to blame (as you have done) some other person.

            The simple key position you base EVERYTHING on is the false premise that the government, not the individual is accountable for bringing themselves out of poverty. If you want facts; here is one – more and more detailed forms of wage assistance and welfare destroy low income families incentive to work themselves into the middle class. Answer that fact. or even try to refute it. It is true and has caused our poverty rate to stagnate at about 15% for many years while liberal dummies wring their hands and think “my God, we just haven’t given them ENOUGH…” and like you, just come up with more and more ways to supply them with more money one way or another.

            Well, we have given them enough and it is time for accountability and acknowledgement that the failed “Great Society” laws and massive business-killing taxes to be eliminated in favor of helping Americans like businesses and job creators to do what they do best; grow the economy.

            Let’s face it you care little about America and just want the lice of socialism to cause the rich to scratch and scratch until they fork over their wealth to the deserving poor. Just go outside and scream “I HATE THE RICH AND WANT THE POOR TO HAVE ALL THE MONEY…” and maybe you will feel better.

          2. baffling

            andre,
            you sound like the folks who say “the government needs to keep its hands off my medicare!” someday you may understand the advantages you had being born with a silver spoon in your mouth, and that position probably keeps you from truly understanding the struggles of the poor and minority populations in this world.

            “this Democrat hard left ruddering has paralyzed our government, made our system of government ineffective and polarized our politicians.”
            really? i guess the tea party types such as Cruz had no part in the last government shutdown? we are polarized. but what has the conservative party done to promote compromise, especially when you consider it a four letter word? oh that is right, compromise entails repealing obamacare-lots of give and take there.

            “when the change turns out to be disastrous like ObamaCare ”
            and what is the disaster? millions of additional people now have health insurance and adequate healthcare. and it did not burden the population as a whole. my health care costs did not rise at all due to obamacare. you need to realistically assess obamacare and not repeat conservative talk radio points.

            “With the minimum wage, you want to use pie charts, graphs and twenty year old stats to try to prove that forcing businesses to increase wages will NOT cause higher prices and cause a drag on employment and the economy. ”
            actually that is simply the use of data to show how minimum wage affects the economy. i suppose you are not interested in the facts…

  46. Ricardo

    John,

    I really appreciate your reply to my post. Your honest searching means that you are someone who actually can find the truth; a truth that often escapes the academic world.

    You wrote: “Many Republicans object to the high Corporate tax rate of 35%……but in 2012….for businesses with $100 million in sales or greater….the average tax paid was 12%.” Here you are comparing two different things. A marginal tax rate of 35% compared to an average tax paid of 12%. You have also hit on one of the biggest problems with our tax code – a problem Reagan went a long way in correcting in the 1980s, though since Reagan his gains have been reversed. How is it that corporations can have a 35% marginal tax rate but only pay 12%? The impact of special targeted tax breaks for industry.

    Corporations have adjustments to their revenue and certain tax deductions that give specific industries and even individuals special tax breaks. Politicians love these because they can use them to extort donations from the wealthy. Interestingly, this is usually done by the politician’s inaction. He proposes a potential tax cut then expects a donation before he acts. His non-action is often the method of intimidation rather than specific actions to solicit bribes. But I digress.

    Neither tax cuts or tax increases can explode our national debt. The national debt is a factor of both revenue and expenditures. If revenues fall but expenditures remain the same the national debt may increase. Recently (and in the 1980s) tax revenue increased significantly. Today, because congress is holding spending down we are seeing a decrease in the deficit and by extension a reduction in the increase in the national debt. In the 1980s because expenditures exploded at almost twice the rate of the revenue increase the deficit and debt increased.

    Something for you to consider is that government debt increasing may or may not be a bad thing. As I stated concerning the Laffer curve and WWII, borrowing to massive levels with huge debt during war may be the right thing to do because it is life or death. But borrowing in peace is less justifiable. The equilibrium point on the Laffer curve changes depending on circumstances.

    You also seem to have accepted the myth that capitalism creates income inequality because you state that the middle class does not benefit from tax cuts. One of the assignments is to look at the taxes paid by the rich during high and low tax eras. The rich always pay a greater percentage of the taxes because they have a greater percentage of the income. It is not good economics to destroy the wealth of the rich; it is class envy. Everyone would like to be wealthy but that is different from envy. Once again consider that those countries with the greatest economic freedom and lowest effective tax rates have the largest middle class. (Venezuela is a classic example. During their prosperity of the 1970s their tax rate was 25%.)

    One other point and I will stop. Income redistribution destroys wealth. First, an economy becomes wealthy through its use of capital. Consider the large machines used in the US for agriculture. They have reduced the average cost of production significantly. But then consider that a large combine cannot be used on a small farm in Kenya. It would be totally useless. A nation must grow into the use of capital always building on the capital accumulation of the previous generations. If these large businesses that efficiently use capital are “redistributed,” where does that efficiency gain go? Major projects are impossible.

    Secondly, with redistribution the average wealth of an economy constantly is degraded. Consider that the natural ability of individuals could be graphed. The curve would resemble a bell curve. Now consider those at the top of the curve as the most able to produce. When resources are taken from the talented and capable producers and given to the poor producers the multiple of increased production by the high producers is averaged down by the weak producers.

    To give this legs consider one producer that can produce 3 times a weaker producer simply because of natural ability. In an economy where each have 5 units the high producer will produce 15 more while the weak producer will produce 5. The new quantity is 30 (15+5+5+5) units. If the income is not redistributed, at the next cycle the high producer will produce 60 units and the weak producer will produce 10 for a total of 100 (60+20+10+10) units. But consider the economy engaging in equal redistribution. Each producer will begin the cycle with 15 (30/2) units. The high producer will produce 45 units at the end of the cycle while the weak producer will produce 15 for a total of 90 (15+45+15+15) units. Redistribution has destroyed 10 units of wealth. If this is continued over time you should easily see that the economy that does not engage in redistribution from the high producer to the lower producer will be the more wealthy economy. Redistribution destroys wealth.

    As an aside, Bastiat comes into play in this situation, the “seen and the unseen.” When the resources are redistributed, the loss of 10 units of wealth are unseen and the politicians brag about creating 90 units, the seen. It should be the work of economists to point out the fallacy and the loss of 10 units of wealth. The only problem is that economists are employed by politicians and so they are more interested in finding justification for the 90 units than exposing the destruction of the 10.

    Now I will stop.

    1. John

      John to Ricardo,
      Here’s some tax….revenues…..expenditures….data for you to chew on.

      ………………………………………………TAX RATE……..REVENUE(BIL)……………….EXPENDITURES (BIL)
      Jimmy Carter
      1978……………………………………… 70% 400 459
      1980………………………………………. 70% 599 678
      Ronald Reagan
      198i………………………………………. 68.8% 618 745
      1982……………………………………. 50%
      1987……………………………………. 38.5%
      1988…………………………………… 28%
      1989………………………………….. 28% 991 1144
      G. Bush
      1990………………………………….. 28% 1032 1253
      1991…………………………………. 31%
      1993………………………………… 31% 1154 1409
      Bill Clinton
      1994……………………………….. 39.6% 1259 1462
      2001………………………………. 39.1% 1991 1863
      G.Bush
      2002………………………………. 38.6% 1853 2011
      2003………………………………. 35%
      2009……………………………… 35% 2105 3518
      B. Obama
      2010……………………………… 35% 2163 3456
      2012…………………………….. 35% 2469 3796

      You can see…Reagan lowered taxes over a few years……and when George Bush followed him….Deficits followed…..big time.

      I cannot accept the argument……lowering the tax rate from 70% to 28%…was not a major factor in exploding the National Debt.

      I agree…..our Government keeps spending money……but the needs of the Country also have increased.

      I also contend…..income/wealth inequality is a contributing issue……Ultra Rich….combined with growing poverty……shows problems in our economy….the Minimum Wage is an economic tool to address that issue…….and adjusting the tax rates can also help.

        1. John

          John to Ricardo,
          Thanks for pushing me to find the data…….and find out if my positions withstood the facts…..or just showed I was biased.

  47. JBH

    I. Anyone in this country who truly wants a job can get one. It may be at a lower wage than desired. In which case they may have to lower their reservation wage. But this does not naysay the fact that at some wage they will get hired. Businesses will tell you it takes only two things: you have to show up on time, and be honest. (It is trivial that you have to be qualified for the job.) Once on board, hard-working dedicated individuals get on-the-job experience that either elicits a sequence of raises or qualifies them for a higher paying job with some other firm. The root source of the raise is the increase in productivity – the value of physical goods or services added by the worker to the firm’s output – resulting from the worker’s increasing on-the-job know-how.

    II. If the minimum wage is below the market wage, the whole point is moot. When the minimum wage is above market, a deadweight loss ensues. This is as clear from elementary economics as it is from the finding of this excellent paper that overall employment falls when the minimum wage is hiked. In starkest terms, there is an ensuing deadweight loss which means society as a whole has experienced a net loss of production. Sure, there will be an individual gain to those low-wage workers who keep their jobs and get the higher wage. But for the rest of society the greater loss spreads in many directions. Such as to individuals who get laid off. Such as in fewer goods and services so that all consumers now have to give up more of their wage to buy the same bundle as before. Such as marginal firms going out of business, and so on. The whole argument beyond deadweight loss quickly degenerates into that age-old dance on the head of a pin about how to slice a smaller pie.

    III. Along the way in this thread were discussions about this or that president being most culpable for raising the debt. Absolute dollars is not the way to look at debt. The ratio of debt-to-GDP is. A household has a comfortable level of debt if it can adequately service its debt out of its income flow. If income doubles, debt can double, the ratio of course will remain constant, and all is well. Reagan took the debt-to-GDP ratio from 32.5% to 50.5% during his term in office – added 18 percentage points. GW Bush took debt from 55.4% to 67.7%, up 12.3 pct pts. Obama, using current estimates for 2016, will have taken debt from 67.7% to 101.7%, up 34 pct pts.

    IV. The matter, however, does not stop there. Reagan inherited double-digit inflation. But by 1988, had bequeathed society a far lower inflation rate and an imminent end to the Cold War. Reagan got something for his debt. Let me say that again, Reagan’s debt was invested in “projects” that paid for themselves in out years. Bush inherited only a mild recession in his first year, and got nothing for his debt. As well, due to the misfortune of years of inept monetary policy resulting in a housing boom on his watch and an unnecessary war, he bequeathed the remnants of a severe recession and financial collapse to his successor. Under Obama, the additional increment to the debt burden will be nearly double that of Reagan and triple that of Bush. Yet Obama inherited a far worse economy than Bush, and a somewhat worse economy than Reagan. Unfortunately there is no straightforward way of netting out how much of the huge increment to the debt under Obama is due to what he inherited from his immediate predecessor(s) and how much he is responsible for. What can be said, though, is that like Bush and unlike Reagan, he will have bequeathed society nothing.

    1. John

      John to JBH,
      i. Anyone can get a job….
      Current NEWS, including Congressional speeches….tell us there are between 2 and 3 applications for each job opening. The current Unemployment rate is 5.8%.
      You are right…..with the Minimum Wage of $7.25/hr…..many jobs pay less than a Living Wage (somewhere between $15.00/hr and $20.00/hr).
      With the MW being a floor under wages……and with high unemployment…..businesses have been ignoring any increases in wages above the MW…..40 % of all hourly paid workers make $10.00/hr or less.

      II. The current MW of $7.25/hr is below the Market wage………40% of workers make between $7.25/hr and $10.00/hr…..the average non-supervisory wage in Nov. 2014, was $20.74/hr.
      When Obama asked this year for the MW to be increased to $10.10/hr….the CBO made a study and issued a report on the economic impacts of a $10.10/hr wage….that report said:
      1) 16.5 workers would get a raise.
      2) 900,000 workers would be lifted out of poverty.
      3) 500,000 to 1 million workers may lose their jobs due to the wage increase.
      Adding wages to 16.5 million workers is an obvious stimulus to the U.S economy……hardly a deadweight loss…..
      A study was made to determine the amount of inflation caused by the increase to $10.10/hr…..That study showed…..Walmart, which currently pays an average wage of $8.81/hr…..would have to raise their prices 1.4% to accommodate the wage increase……with the higher wages, I’m sure workers could handle that additional inflation.

      III.When Obama took office in 2009…the Annual Deficit to GDP was over 10%……for 2014 the Deficit to GDP was 3.0%…and the current predictions are for the Deficit to be lower in 2015.
      We have had 57 consecutive months of private sector job growth……if we could somehow increase the MW…..and grow our GDP…..we could make additional progress.

      IV. Reagan lowered the tax rate from 70% to 28%….over several years…when he left office the Annual Deficit was $155 billion…..four years later….when George Bush left office….the Deficit was $255 billion….a 67% increase in four years…..and Reagan’s 28% tax rate did that.
      More important than Deficits….Reagan taught the Public…paying taxes is BAD….we can borrow money to pay our Government Bills…..people believed him…and still believe him today…..in addition…..since Reagan….we have seen the greatest redistribution of wealth in our history….David Stockton, Reagan’s Budget Director, has been critical of Reagan’s low tax rates…..he has reported…in 1985…the top 20% had a total net worth of $8.5 trillion….in 2009… the Net Worth had grown to $70 trillion. In 20012….the top 20% owned 84% of the American Wealth…..the bottom 40% owned 0.4%.

      Republicans will now control Congress…..the last increase in the Federal Minimum Wage was in 2009……..there is no hope of any increase in the MW in the next two years…. and probably beyond.
      Don’t forget to pay your taxes…….the cost of Welfare is going to continue to go up……

    2. Johnny

      No, in this country, not everyone who wants a job gets one. No, a hard-working performance does not lead to a sequence of raises or qualifies for a higher paying job. No, productivity in your job is not related to anything. Ask torturer George W. Bush. Or ask this talking-head Obama.
      In this country a network of rich friends and the right connections, mostly in the political sphere, guarantee all the things you are dreaming about. Hopefully, your post was meant sarcastic, otherwise you must be a complete idiot.

      1. John

        John to Johnny,
        I agree.

        But many people believe what JBH has said……at least Obama tried to raise the Minimum Wage from $7.25/hr to $10.10/hr.
        Republicans have made sure…..their business friends will not have to raise their Labor Costs.

  48. Joseph

    As usual, you can’t trust JBH with numbers. You can see the debt numbers yourself courtesy of the FRED data. More than half all the debt incurred as a percentage of GDP in the history of the U.S.can be attributed to Reagan and the Bushes. In fact, the debt had been declining steadily for 35 years after WWII until Reagan took office and reversed the trend.

    http://research.stlouisfed.org/fred2/series/GFDEGDQ188S

    1. JBH

      Every number in every post of mine on this blogsite is dead on. All are verifiable by any reader who so chooses. The data series on the FRED link you provide is publicly held debt. My numbers are from the gross debt series. Using annuals, as FRED data is annual-only for gross debt, the R2 between publicly held and gross is .999.

      In the spirit of sticking with the thread of the relevant comments, and in the spirit of Occam’s razor, I laid out the percentage point increases in the debt ratio over the terms of the 3 presidents who had gotten all the attention. You, on the other hand, did not stay true to the thread. You introduced a new comparison, that between Reagan and the Bushes on the one hand, and all presidents on the other. The debt ratio for the most recent annual data point (2013) is 99.7%. The joint increase attributable to RBB is 42.6 percentage points. More than half of all the debt increase since the inception of this nation cannot as you claim be attributed to Reagan and the Bushes. You don’t even stay true to the numbers. Once this is known about a person, the rest of your comment is suspect as well.

      The numbers I cited are baseline calculations – the starting point for any analysis. As I made abundantly clear, presidents both inherit and bequeath. It is superficial by half to imply one president was better or worse according to such-and-such a data series – naked, unanalyzed, and taken out of context. My comment went beyond baseline by laying out a few of the most pertinent nuances. I did so to more completely tell the story for the sake of the general reader. Once more then, take Eisenhower as another example. He inherited an economy that lent itself to paying down the debt. But also Ike was steadfast in doing just that in the face of opposition from his own party. Ike thus bequeathed something of value to the country, all the while fully conscious of his objective and working hard to attain it. Reagan inherited a dismal economy. As David Stockman made clear in his 1986 book, Reagan and nearly everyone else in his administration were clueless about the unintended consequences of the inflation plank of Reagan’s four-part economic program stated upfront by the president. From the outset, as inflation plummeted it eviscerated nominal growth and tax revenue. The severe 1982 recession (necessary to break the back of inflation), took nominal GDP down and debt up, thus doubly driving the debt ratio higher. It cannot be emphasized enough, that the number 1 economic problem at the time was inflation. Aligned with the Fed on the objective of taking inflation down, and reappointing Volcker over the objections of his cabinet to do just that, Reagan paid in the coin of a higher debt. Also, his tax rate cuts played an important role. But I have yet to see a comprehensive parsing of how much of the rise in the debt ratio was due to tax cuts, how much was due to lower inflation, and how much was due to achieving other objectives like ending the cold war which necessitated greater defense spending that also raised the debt.

      Moreover, Reagan debt was sustainable in that it fell below the range of optimal federal debt. Just the opposite was the case when Eisenhower took office. This and much else goes right over the heads of all too many commenters on this site.

      Finally, your scurrilous attack on my integrity and your playing fast and loose with the numbers speaks volumes about you.

      1. John

        John to JBH,
        WOW!

        Your knowledge and experience is far beyond my layman’s understanding of economics.

        I did live during the Carter and Reagan years….I remember the inflation….I think the Prime Rate went to something like 20%…..it’s now 3.25%.

        My contention and question for you……Reagan lowered tax rates from 70% to 28%…..that seems to be a one-sided advantage to the RICH.
        Do you agree?

        Also…..one of the charts from a COMMENT here…shows the National Debt as a percentage of GDP.
        That chart shows a downward path during the Carter years….and an upward path starting with Reagan…..It seems to me, that correlates to a drastic cut in tax rates.
        Do you agree?

        Finally…where do you stand on an increase in the Federal Minimum Wage?

        1. JBH

          “Reagan lowered tax rates from 70% to 28%…..that seems to be a one-sided advantage to the RICH. Do you agree?” (1) Note the economic boom in the 80s that resulted in part from the cut in marginal tax rates. The pie grew larger. Growing the economy is the foremost priority. (2) Economics is based on individual freedom of choice. That choice is eroded and taken away from hard-working Americans, rich and not-so-rich alike, by the government in the form of taxes which at root are coercive. You would not for a moment stand for having someone grab your arm and twist it as you walk into a room. Yet you not only let the government do so, you cheer the government on. Beyond some minimal level of government to provide defense and so on, each additional tax dollar unnecessarily takes a bite out of that taxpayer’s personal liberty. And, it also it interferes with growth since (in general) government is far, far less efficient than the private sector. (3) The optimal size of government from the joint growth and freedom standpoint is less than that that can be funded deficit-free by a 28% tax rate. (4) As for the wealthy, some are that way because of their contribution. Who are you to say that those contributors to economic growth and jobs should be taxed proportionally more? Do you have the wisdom of Solomon? (5) This leaves those who are rich due to the corruption of the system. You lump honest contributors together with crony capitalists. Whereas the focus should be on eliminating the corruption. What’s left of the income of members of this category after stripping away the wages of corruption would then be treated like the honest income of everyone else. (6) Swing back to big government. Big government, crookedness of the system where government has its hands in every pie, it the prime cause of much if not most of the corruption. To open your eyes, read Stockman’s The Great Deformation. It is not possible today to write an Economics Principles text that covers all the bases without a chapter on corruption. (7) Read and then reread the above and you will see I’ve answered your question – not in a simple way – but in a rich, textured one.

          That chart [debt-to-GDP] shows a downward path during the Carter years….and an upward path starting with Reagan…..It seems to me, that correlates to a drastic cut in tax rates. Do you agree? (1) It not only correlates, indeed the upswing of debt was in part caused by the cut. The operative word here is partially. Go back to my original comment and you will see I addressed this. I have never done the hard work of producing a peer-reviewed quality study that parses how much of the rise in the deficit (or debt if you prefer) was due to the tax cuts. And how much was due to the other factors I mentioned. I daresay, though, that the drop in inflation was the prime cause. It was the price that had to be paid for the earlier negligence of the Fed in allowing inflation to get out of hand. Read Stockman and you will be enlightened on this as well. (2) Yours is a monotonic view of the economy on this particular. You see only the tax cut and not the myriad of other variables that were operative. Further insight will come only with hard work on your part. When you do this work, your view will change. Spend some time on the Mises.org website. Digest what’s there and think about it. (3) It should not escape you that the corruption-government nexus is on full display with the havoc the Fed has wrought since its inception. At your present level of economic understanding this will not be nearly clear enough. But with work you will get there. (4) The US economy has been sliding since the 60s. The trend of real growth is ever downward. The US and the entire West is now in a box canyon. Sheer walls of debt. It will be decades before the US extricates itself, if ever. The growth of the fathers will not visit the children. Social tension will rise. More and more will blindly cry out in frustration against the 1%. Another financial collapse is coming. The minds I most respect generally believe it will be more calamitous than the last. Most of these sharp people are in the private sector running financial firms. Few are in academia. You can take the gist of this as a forecast.

          Where do I stand on the minimum wage, you ask? My comment on December 12th already answers this. The core of the answer lies with deadweight loss. Deadweight loss is like scooping up rich loam soil, spreading half of it around on other acreage, and then dumping the rest in the river, its value to society lost forever. How can this be right except in rare circumstance? No great economist – not one to my knowledge – ever countenanced this. Marx being the exception. Your view on this is, again, monotonic. You see only the good consequences for some . You do not stand tall and look out over the entire horizon to see the pernicious consequences of even greater magnitude that affect all the rest. You are myopically dazzled by the benefits of more consumption to the lucky few, thinking that they by spending their higher wage will boost the economy like Rumpelstiltskin changing straw into gold. Alas, only in fairy tales.

          There is a saving grace, though. You evince a desire to learn. Hats off to you for that. I would not have responded to your questions in depth otherwise. You are not in a psychological state of denial of not knowing it all. As are so many. Good for you! Now do you really want to know about the effects of the minimum wage? Here’s the gold standard. Talk to 10 business owners of firms that employ 20 workers or more. These by the way will be amongst the most productive members of society. Elicit their views, and then come back and report on the results of your survey.

          1. baffling

            “Note the economic boom in the 80s that resulted in part from the cut in marginal tax rates. The pie grew larger.”
            it grew through deficit spending. you are advocating stimulus through deficit spending approach to the economy. if you want to promote the reagan miracle, at least be honest with its source of success.

          2. John

            John to JBH,
            I still struggle with your words……it’s hard for me to determine if you support arguments….or voice opposition.

            On the Reagan tax cuts from 70% to 28%, you said:
            ” (3) The optimal size of government from the joint growth and freedom standpoint is less than that that can be funded deficit-free by a 28% tax rate.”
            That’s one of my points.
            I could not find your position on my argument…..Low tax rates were more beneficial to the Rich…than to the Working Class. It sounded like you were opposed to Government obstructing the Rich from becoming richer.

            On the debt vs GDP chart, showing an increase in debt under Reagan, you said:
            ” (1) It not only correlates, indeed the upswing in debt was in part caused by the cut.”
            I thank you for that.
            I do agree…..economics is a mixture of many forces. I present my arguments on what, to me, are obvious issues. I’m less aware of subtle points, that may end up being major issues in the long run.

            I agree with you……many have been corrupted by the money in our society.

            I stand by my points:
            1) Taxes are too low….and are more beneficial to the Ultra Rich.
            2) The Minimum Wage is an economic tool that benefits both the worker and the businessman.
            3) Economic freedom is provided to any businessman that decides to pay any wage…..above the MW.

  49. Joseph

    JBH, the FRED numbers clearly show that you numbers are incorrect. Until you can show the source and means of your calculations, your bluff and bluster is meaningless. You can’t just make stuff up and expect to get away with it.

  50. Andre'

    John, I am convinced that you are not interested in really helping the economy or being fair to ALL Americans but just want YOUR personal point of view to dominate this forum. When offered sensible compromises you deny ANY other point of view save yours. You harp on stats and ignore reality (except of course when presented with opposing stats that you simply discredit) and focus on taking more money from “the rich” to in one way or another and give to the poor. You simply hide behind your preferred dogma, refuse to accept any other sensible alternative and simply deny reason in favor (as typical of a liberal) to push your point of view. Your agenda is obviously being the taking as much money from “the rich” to give to others you determine to be more deserving and use the “growth of the GNP” as the facilitating cause. Since you have departed from a reasonable discourse as Thomas Paine said “to argue with a person who has renounced the use of reason is like administering medicine to the dead” I must talking with you is a bore and have to admit that you see discussion as lecture, compromise as capitulation and solutions as something the other side never will have. I am convinced you must be a teacher used to forcing your opinion on gullible and controllable students, who gets little pushback and have had way too much leeway in shaping others’ point of view as you see fit. Which by the way is disgusting. While I pity the young minds you infect, I see very little good in talking with you as you want America to acquiesce to wealth redistribution, move away from where the successful, hard working and ambitious people can not only succeed and enjoy the fruits of their labors, sacrifice and adherence to high morals and standards to simply use them as the source of obtaining the monies to GIVE more to those people who will then have an even less reason to obtain better employment. Your obvious intransience on that simple fact that reinforcement of the dependency of supported poverty with extensions of welfare benefits, dramatic increases in the MW and higher taxes for the job creators just maintains the poor in poverty shows that you do not want discussion, you simply want to have everybody agree with EVERY point you make. Bub, you are not that smart, you are not in the classroom where we all have to bobble our heads to get an A and most certainly you do not have all the truth on your side like you think you do.

    1. John

      John to Andre’
      If wages are raised……and if that wage is spent buying products for sale by businesses…..do you agree or disagree….both the worker and the business benefit ?

      1. Andre'

        Baffling,
        Your reply is incomprehensible; I have no idea what you tried to express. Please have professor John here proof-read your missives so you don’t sound like someone who mastered Common Core curricula so you sure know how to support diversity but have no idea how to do math or write.

        By the way, people who hide behind something besides their own name is the worst kind of internet troll, made brave by anonymity but who runs for the protection of the darkness instead of owning up to their beliefs – I hove no respect for you and what you think.

        1. baffling

          and you are not anonymous on this site? very brave to stand behind the moniker andrea! letting the world know who you are and what you stand for!

          your commentary and responses are exactly what one would expect from a tea bagger who is angry with the world! people like you are baffling!

  51. Andre'

    IF… let’s play the WHAT IF game…the unprovable, theoretical recourse of a weak argument but OK, I’ll play; You assume that the additional wages will be spent in way that will help both the worker and businesses, but which businesses and to what end? Like that boondoggle road work done close to me where a million dollars was spent to simply tear up a roadway and replace with and identical roadbed. The additional “stimulus” money sure suddenly didn’t make the economy perk up based on that AND EVERYWHERE ELSE IN THE COUNTRY (but I am sure some local BFF road contractor of a Democrat politician had his off-shore account fattened).

    I disagree that both the business and worker will benefit because IF (there is that inconsequential and useless word again) the worker buys malt liquor, Pot or methamphetamines, there is not much good that those transactions will create and the “wrong people” (just like the boondoggle jobs paid for by the one trillion dollar stimulus that failed to jump start the economy as promised and was a hell of a lot more money pumped into the population than the MW will ever do) get the money. While you think and plan that “the poor” will go to the Walmart and buy more jeans, apples and tampons and spike the GNP, it flies in the face of reason when you compare that the results of “the stimulus” which was proven to have a negligible economic effect. Even with the failure of Obama’s HUGE infusion of spendable money to do JUST WHAT YOU SAY THE MW INCREASE WILL DO you are SURE that if you increase the MW to infuse much less money into the hands of the poor, you ARE CERTAIN it will be the savior to half a decade of a terrible recovery and will spike a great increase in our economy and GNP. Is that about it? Do you know what insanity is? It is the desire to repeat the same behavior over and over and expect different results and that is what you want; to spend good money after bad on the worst possible guarantors even though we have FIFTY years of proof that enriching the poor does NOTHING to improve their status, decline the poverty rate or see that according to your theory, the decades and decades of trillions of welfare dollars pumped specifically into “the poor” it should have made our economy soar.

    Deny that FACT.

    Gosh, oh well if you are right then the “poor” will start buying all the right stuff based on sound decision-making and sensible purchasing – which is counter to the whole reason that they are poor – they are on the bottom of society because of a proven history of bad financial decisions, inability to control poor habits and an overall irresponsibility to theirs and their family’s well being. They are poor because they don’t succeed without sustained and direct assistance form others but you seem to think that they will (with sufficient funds) start living responsibly and spontaneously start to support the mainstream economy.

    You gotta love liberals, they are eternal optimists when it come to the poor, just as they are eternal pessimists of law enforcement, the military, business and “the rich” unless they are in sports, entertainment or a major donor. Conservative and ultra-rich Donald Trump – BAD; Liberal and uber, ultra-rich Bill Gates – GOOD. Head of GM who failed to keep the car giant solvent – BAD and should be fired, Oprah Winfrey who is failing to keep her empire solvent – GOOD and frequently invited to the White House. Nothing hypocritical about them liberals. No sir.

    But I digress; getting back to the wonderful WHAT IF game you wanted me to play, In the real world, most of the monies GIVEN to the “poor” will simply disappear and the poor will simply adjust and squander the higher amount of disposable income; probably using it to further their indebtedness or drug or alcohol dependency or illegal; drug sales. I am sure the Mexican Cartels will thoroughly appreciate the increase in revenue as the owners of Quickie Marts and big tobacco. Boy, ain’t that great. If you are right then after FIFTY years of incredible amounts of LBJ’s Great Society welfare given, tens of trillions of dollars, America should have had and kept our economy SOARING! But that didn’t happen, did it?

    The Additional money you want to dump into the lowest tier of our society will just dig most of the holes they are in deeper and the money will just never rise to the surface. You seem to want a reverse “trickle down” economy where the spending of the poor works it way back up to the businesses – Oh wait, you already believe that it doesn’t work don’t you? Or does it only work one way?

    Now, IF a MW does not cause the economic boost as you are whining about, then WHY will you not allow the bad (and expensive decision to be reversed) lawfully reduced?

    Thanks for playing.

    1. John

      John to Andre’
      In our Supply/Demand Economy……if you don’t increase Demand……Supply will suffer.

      Most people acknowledge…..Wages have been stagnant for the last 35 years.
      Most people acknowledge…..When taxes rates were lowered to 28%….and have remained low ever since….the Rich have been the most benefitting.

      You disparage the Low Paid Worker as being unworthy of any Government assistance…..It’s their own fault, that they are poor.
      With the current Minimum Wage of $7.25/hr…..since 2009…..40% of those workers make less than $10.00/hr…….most everyone agrees…that is less than a Living Wage.

      Remember…business lobbies to make sure the MW is not increased…..their profits are far more important….than providing workers with a Living Wage.
      You as a tax payer…..appear to be uninformed…..that your tax dollars subsidize business that don’t pay a Living Wage……You disparage paying for Welfare, and blame the low paid worker…..when in reality…..businesses are forcing you to pay for the Welfare they create.

      Bottom Line.
      Minimum Wage is a floor under wages.
      If the MW is not increased…..wages above the MW will continue to go up at a rate far below the Cost-of-Living.
      Low tax rates continues to increase the inequality of income/wealth in our economy….and will lead to instability in our society.
      Your taxes unfairly pay for business profits.
      Republicans control Congress……no hope for change in the next 2 years.

  52. Joseph

    Andre: “You harp on stats and ignore reality.”

    And there, folks, is conservatism in a nutshell. Data is not reality. Reality is what you feel in your gut.

    1. Andre'

      Stats are THE best way to prove a particular point because,
      1. Usually only the person who quotes the numbers knows where it can from or if it is real.
      2. The conditions of how the statistic was created is seldom evident
      3. Usually statistic are gathered for a specific purpose and have an agenda like Global Warming, so the objectivity is VERY suspect
      4. Data can be easily manipulated to prove or disprove any point.

      The United States and Russia were involved in a race that even before the competition the rivalry became so intense all the other competitors dropped out just leaving the US and Russia. The US won and while the US press mentioned that that fact, the Russians claimed that “after a very close race the great Russian competitor came in a close second while the weak Americans came in next to last.”

      It is all in the presentation pal so take your “stats” and stick them and answer the real over-arching question of why should we nurture and protect one group (the poor) as we have done for a half-century with no good effect at the expense of the hard working middle class and businesses who create jobs and the wealth of the nation? WHY?

      Riddle me that bitch!

      I believe people who use statistics to try to disprove an obvious fact (like giving more tax money to people crushes the desire to obtain jobs and will not make our economy soar) are like UFO enthusiasts giving testimony about seeing flying saucers and little gray men; they want it so bad to be true they are willing to exaggerate, lie and make things up to prove their point.

      Stats are to arguments like using your fingers to make quotation marks in the air when you talk to someone; it seems to make your argument stronger but just looks stupid and really doesn’t make what you say truthful.

      1. John

        John to Andre’
        For a family of 4…to qualify for Food Stamps….that family income cannot exceed $$32,000/yr ($16.00/hr).

        40% of hourly paid workers make $10.00/hr or less……where’s the incentive to Work?
        Our Safety Net will take care of you……are 40% of workers …so stupid….that they could get $16.00/hr by not working?

        NO!……American workers take pride in having a job….they’ll go out and get 2 or 3 jobs to take care of their families.

        Many of us know the System is rigged against the low paid worker…..they are called lazy…..they don’t contribute enough to their boos to deserve a raise. They are taking from the REAL workers and the RICH, who deserves all their money and no one should take it away to GIVE it to the poor…..if you are poor…it’s your own fault.

        Which one of these two groups…..is stupid?

        Welfare is there to assist the Disabled, the children, the elderly…….those in favor of low wages have now created a condition……where Welfare is REQUIRED for millions of WORKERS.

        Many people are educated to realize……business has taken advantage of the National Safety Net……Companies like Walmart and McDonald’s make profits that are dependent on Welfare payments to their customers. In a Free Market Economy……tax payer aid should not be a portion of a business profit.

        John Kennedy requested a Study….to determine the required amount to pay a Welfare subsistence amount to an individual and a family.
        It was quickly found…..the Minimum Wage did not meet the minimum requirements to meet the living costs.
        50 years later……that condition remains.

        When I was a child……my Father told me……No business should be allowed to open it’s doors for business…..if it cannot pay it’s employees a Living Wage….because…that business will become a burden on tax payers and society.
        He was right.

      2. John

        John to Andre’,
        You and many others challenge many statistics….yet…in your case….you don’t provide opposing statistics that support your side of the argument…which you say exist.

        Climate Change is in the NEWS.
        Many support the idea….the Earth is getting warmer…..others say NO, it’s just a Climate Cycle.
        Canada has 14,000 glaciers……600 glaciers are growing….13,600 are reducing. Sometime…opinions trump…facts.

  53. Ricardo

    John,

    I hope I pushed you beyond the data. Economics is a social science not an empirical science. Move beyond the what to the why.

    1. John

      John to Ricardo,
      The economic situation today….of stagnant wages….high unemployment….inequality of income/wealth…..high National Debt…growing poverty……is partially due to a Low Minimum Wage.

      That’s what this blog is about…..share your knowledge of how we got here……and make suggestions on how to improve our future.

      I contend, Increasing the MW towards a Living Wage…will benefit Workers and Business….and all of society will be the winner.

      As a side issue….raising taxes…instead of continuing to borrow….will improve our National Debt problem.

  54. Andre'

    “40% of hourly paid workers make $10.00/hr or less……where’s the incentive to Work?”

    If you are unskilled and uneducated but ambitious, I would think you would see that as proof that you needed a skill or bettered your education.

    “American workers take pride in having a job….they’ll go out and get 2 or 3 jobs to take care of their families.”

    Yes, work multiple jobs (as I did) and delay having a family (as I did) until I had a career. Then and only then did I want to bring a child into this world. How about this; don’t have a bevy of babies and then look for Uncle Sam to be the breadwinner. Here is a hint that IS DEFINITELY needed; if you don’t have enough money for yourself and then bring children into this world with the full knowledge that they will be disadvantaged upon birth, those mothers and father should be held accountable for that kind of irresponsibility but you guys just want to give them more tax dollars, so now instead of having less babies in poverty they are in effect REWARDED by getting more welfare for each child. That is a loophole in the welfare system that really needs to be closed.

    “They are taking from the REAL workers and the RICH, who deserves all their money and no one should take it away to GIVE it to the poor…..if you are poor…it’s your own fault.”

    Yes, yes and yes. That is the absolute center of this entire discussion. The “poor” obtains monies from various agencies and NGO’s (called charities) who has interpreted the receipt of those unearned funds as some kind of right; it is not, it is a gift. You guys simply want to federalize that charity and make it mandatory with specific guidelines THAT DOES MAKE IT A RIGHT! That is wrong, as we have seen those payments become no longer a gift but a unearned stipend and now when that is not enough for you, you want that unearned income supplanted by other means such as an increase in the MW or just bald-faced demands that the “rich” (now inclusive of successful businesses, the middle class and any American who pays taxes) do not make TOO much money and IF YOU DO, you HAVE THE OBLIGATION to provide “the poor” with more. No, that kind of protection of one class at the expense of another has been disproven and been the cause of much of the bloodshed in the past one hundred years. Please read up on the rise and fall of Communism, the death toll it has exacted the dozens of ruined nations it has produced and the simple fact that if you do as you want and make the rich pay for the poor, eventually the rich will do less and the “poor” will want more to the point of non-ductile failure; the system fails. THAT my friend has been the historic endpoint of ALL systems that think that “the rich” has no ownership of their labor and profits while that “the poor” does.

    “Many people are educated to realize……business has taken advantage of the National Safety Net……Companies like Walmart and McDonald’s make profits that are dependent on Welfare payments to their customers. In a Free Market Economy……tax payer aid should not be a portion of a business profit.”

    People should be educated that many on welfare takes advantage of the system to not only exist but thrive very well. A real way to prevent exploitation of the monies paid to “the poor” is to reduce welfare and make EBT purchases further reduced to basic staples. BTW I see you have no issue with the portions of welfare used to buy Marijuana and methamphetamines that enrich the cartels, gangs and others on welfare (maybe we’ll call that trickle sideways.)

    “John Kennedy requested a Study….to determine the required amount to pay a Welfare subsistence amount to an individual and a family.
    It was quickly found…..the Minimum Wage did not meet the minimum requirements to meet the living costs.
    50 years later……that condition remains.”

    Yes, it did not work then and still isn’t working…but instead of admitting defeat, like any good tax and spend liberal you just want to double down and THROW MORE MONEY AT A FAILED PROGRAM. Thanks for proving both my point about the stupidity of trying to solve poverty by having the government take fiscal accountability for “the poor” and that liberals simply refuse to deal with the facts as they are but would rather cherry-pick the stats that help them and ignore the reality that governmental assistance kills motivation.

    “Wen I was a child……my Father told me……No business should be allowed to open it’s doors for business…..if it cannot pay it’s employees a Living Wage….because…that business will become a burden on tax payers and society.
    He was right.”

    I’m not going to say a word about that because he was your Dad, but just ask yourself if any business plan EVER included that consideration? Business is tough enough and if that was true, how many have failed and people put out of work as a result. A low wage is better than no wage.

    The poor understands that fact the a low wage is better than no wage, except the ones living well on welfare and have no intent to work.

    If you were for making drastic cuts to welfare followed by an increase in the MW with an easing in business regulations and taxation, I could easily find that appealing.

    Welfare as it is now has failed, the MW as it stands now has failed. You want to throw more money at the failed programs while common sense, historical precedent and a half decade of wasted tax monies says we need to spend less on “the poor” and more on the middle class (the “rich) and businesses even though they are created to make a profit (those greedy, nasty people.)

    Really, with all this failure on the left, how in the world can you persist that organizational redistribution of wealth such as what you want will make for a more motivated “poor” while the “rich” will accept being milked as a perpetual cash cow. Look at Great Britain or Argentina or Greece or many other nations that made socialism the rule of law, and ended up a hollowed out shells of what they were. Not here, not now, and hopefully not ever.

    1. John

      John to Andre”
      This blog is about WORKERS……If you are angry about people on Welfare that don’t work…..go to another blog.

      You seem to be convinced that individuals can solve their own situation…..on their own….they don’t need any help from society…..if they can’t make it…it’s their own fault.

      Society has the capability to do……somethings an individual cannot accomplish by themselves.

      World War II ended suddenly….after the Atomic Bomb was dropped. The U.S had expected many additional casualties before the War would end. Those that didn’t die…..came home safe. Against your recommendation…….Society gave those soldiers…THe GI BILL of Rights….Society paid for their college education…and paid to train them for various jobs….and helped them start businesses…and helped them buy houses.

      Those Soldiers…that accepted that help from society….are the parents of today’s babyboomers….that are currently the richest financial sector of our society.
      You can talk all you want….that individuals don’t need any help from society….they can do it on their own….you are wrong.

      Your approach is the opposite…..cut Welfare….”a low wage is better than no wage”. If you are so right…..why are kids living in the basement of their parents house today? Society made the right decision after WW II….and it was a success….Your approach today of cutting Welfare, and supporting low wages continues to be the failure we are experiencing today.

      You say….don’t have kids until you can afford them.
      Social scientists have determined…..for population to be stable….in requires each woman to have an average of 2.1 children…..in 2012…in the U.S…..the average birth rate for each woman….was 1.86. Young people are not ignorant….they know today’s financial environment does not allow them to pay for kids.

      I’m waiting on your answer…..that some of your taxes…..end up in Walmart’s profit statement……..because today’s society allows Walmart to pay below a Living Wage….and you and I, taxes payers..have to pay Welfare to that worker. That’s called…taking from the Middle Class and giving to the Rich….which is what you support.

      1. Andre'

        John,
        You have a right to your opinion, but it stops when you put words in my mouth. The GI Bill (which until now I never talked about) was EARNED by the service of the tens of thousands of people who fought in WWII, it was not “given”. Get that straight my panicking friend. The use of the GI Bill was provided to energetic, grateful and motivated American whereas welfare is GIVEN to mostly unappreciative, unmotivated and indifferent recipients; that is why the GI Bill was both the right thing to do plus the smart thing to do – and worked very well. As an aside John – the GI Bill thing really kills your argument, use it all you want but it is just lamebrained to compare apples to oranges – or in this case C rations to oranges. Sorry, I’m still laughing at your idea or comparing welfare to the GI Bill…

        OK, as far as why kids are still in their parents’ basements is the same reason welfare is such a trap; you make an easy path, and the less ambitious will take it. If parents allow their offspring to move in and mooch for an indefinite period of time – well then it is family-sponsored welfare, not state-sponsored welfare; some times both. IF those kids were not given that option (or a safety net that they know will always provide for them like welfare is) then they would have to enter the workforce or face living outside and going hungry. At that point a low paying job to pay rent would be a start; then once the low paying job no longer pays the bills, then the worker would say “hey, I would like to earn more…” At that point maybe they work longer hours, another job and starts to save. With the additional funds they enter a trade or school to better themselves, and then get a better job. With their additional training and increased self-respect the person then works hard and keeps making an effort to succeed because they now know it is up to themselves to succeed and it sucks to be poor. That is how several generations of immigrants did it, but now you decree that we need to just GIVE money away. Would that work? Or would those kids who were GIVEN a subsistence payment just continue to sit in the parents’ basement and play video games and smoke pot. OR they can get a MW (even a higher paying MW) job and since they STILL don’t have any motivation (why should they, they are being paid a great wage for essentially a menial job) they still will continue to sit in the parents’ basement and play video games and smoke pot . Either way both welfare and the MW fails to reward initiative and kills motivation – a proven fact.

        What you want to do is be the nice guy and give money away, but instead of gratitude and achievement welfare promotes dependency and haplessness. However, where you really show your INCREDIBLE ignorance is not mentioning that one segment of our society has 70% of kids with a single parent household, with many, many mothers with several kids before reaching eighteen years of age. That actually supports my concept because a single mother with several kids is eligible for a quite a bit of assistance. You are so quick to hold up the deserving needy who will succeed and work hard while ignoring the huge amount of purposeful, systemic welfare abuse. When will you liberals learn the best way to get across-the-board support for welfare is to help stop welfare abuse, multi-generational welfare families and teaching the poor that having babies out of wedlock is a good way to get more welfare. Try that.

        No my friend…wait…sorry, I had to chuckle again about comparing welfare to the GI Bill…that will NEVER get old…you really ought to understand that you are supporting a welfare system (and an increase in the MW) that is proven killer of motivation to work, has not helped our economy or reduced poverty not for a few years or a decade but for FIFTY YEARS! Good lord Jack, how long do we have to push that same rock uphill before we say, hey that just didn’t work…let’s do something else.
        e the
        Nope, all you liberals want to do is the same tired mantra, increase taxes and spend more and give more tax money away. That is why the Democrats have been shown the door, and now are in full fledged open-eyed panic that if this trend continues, these last few years will be the swan song of the Democratic Party.

        1. John

          John to Andre’
          You keep trying to discuss people you are angry about…that don’t work….and receive Welfare.
          This blog is about WORKERS and their pay.

          No one gets a Minimum Wage without working……You ignore that fact.
          You demand everyone must work for what they get…..but you think if a person works for a low wage…they didn’t earn it. You demand…they are getting FREE MONEY FROM TH E RICH. You are wrong…they must earn it.

          You think every person can start out at a MW……save money……live on their own…..go to school and get an eduction….get a better paying job…and be successful…..and if that path is not successful…they can just starve to death…..society has no responsibility for their failure…..success should be rewarded…..failure has no place in your plan.

          You are smart enough to know….only a small percentage of High School Graduates….will ever get a 4 year college degree.

          This blog is about those that don’t reach the success of your Plan……Your quick answer is to condemn then to poverty…and blame them for their plight.

          That is not an intelligent answer to a problem in our society.

          Getting back to the economics of this blog.
          If a person works two 40 hour jobs (80 hours/wk)….at MW they will make $30,000/yr….if they are married and have 2 children…..they will still qualify for Food Stamps. That leaves 88 hours each week to pursue you plan of advancement . I predict…there will be few that reach the success you expect workers to go after.

          I hope you can begin to appreciate the hurdles you put in front of workers…by refusing to increase the MW.

          Don’t forget….your plan benefits Walmart and many other companies.

          WHEN WELFARE PAYS MORE THAN WORK…..YOUR PLAN LACKS ANY INCENTIVE TO ENCOURAGE PEOPLE TO WORK
          Welfare is an effort to provide a subsistence level of income to the disadvantaged.

          When you allow wages to below Welfare…..you lose credibility in disparaging people that refuse to work…..they are smart enough to reject your argument, that working at low wages will sometime in their future benefit them.

          Your anser to that…is to cut Welfare…..how do you sell you argument to the disadvantaged….who are unable to respond to your approach of using punishment to force people to work? What price to you put on them…to try to reach your goal? Remember….Welfare was intended to be the least amount to survive.
          By keeping wages low….you are forcing people to stay on Welfare ….you offer no incentive to work.

          1. Andre'

            Providing an artificially higher wage for a menial job is no incentive to better one self either. You simply want to reduce business profits and place that wealth into the hands of others. What you discount is that the millions of immigrants who had to work with no such cushion or series of benefits made this country, but you seem to think that proven paradigm is wrong; it is not. You work at the job for the pay that is offered, if you wish for a better paying job then you work harder and find ways by sacrifice and not indulging in every well-marketed luxury so you can have a family and home. You seem to be confused with existence wage with wages so people can live with every toy and bauble that they want. The MW is designed to make sure people don’t starve and even that is a gift. Both the MW and welfare fails if the recipient does not accept that the money is for their basic needs and it is up to THEM to find ways to improve their life. Millions of Italian, Irish, Mexican and Cuban immigrants worked very, very hard so their kids could have it better- and a lot of them did. What you want to do is short-circuit that process, which is noble as a grape, but working hard at jobs, no matter what the pay, will start a person to succeed IF THEY WANT TO. You just want to subsidize those that would rather have an artificially high wage and then go back home and live in their basement and live with their Mom for thirty years, coming out only to show up at their MW job, buy their weed and video games and vote in Democrats to make sure their gravy train never is derailed. The others will be working, working, working until they can afford better.

          2. baffling

            andre,
            you simply ignore why we developed such programs as the minimum wage, social security and medicare in the first place. it was because as a society decades ago we simply refuted the notions you are bringing to the table today- survival of the fittest and the rest fall by the wayside. as a society we decided we no longer wanted to have the county poor house and senior citizens living in destitution without income later in life. so we, as a society, decided to do something about this situation. you are simply trying to return back to the “good old days” that the country as a whole shifted away from years ago. why you are so bitter at the people around you who were not born with a silver spoon in their mouth like yourself is simply baffling.

          3. John

            John to Andre’ 12/17/14 2:39 am,
            You state a higher wage is not an incentive to a low paid worker……the wage incentive is not restricted to higher paid workers…..but the incentive to a worker to provide for his or her family…..trumps any incentive you support for workers to work towards a better life sometime in their unknown future.

            I do not want to reduce business profits……History shows….when business costs go up…..businesses raises their prices….economists call that…Cost-of Living increases…..In Nov 2014….average hourly pay increased…..businesses continue to report profits.

            You are stuck on……AN INCREASE IN THE MINIMUM WAGE….IS TAKING FROM THE RICH AND GIVING TO THE POOR.
            I understand……..you will never give up that opinion……But you are wrong.

            You contend that if you work hard, and sacrifice, you will be successful……and you don’t need any help from an increase in the MW….you can experience living below the Welfare Base income in you effort to succeed……so when you succeed….. you can tell others THIS IS THE ONLY PLAN THAT WORKS….and if you don’t succeed….it’s your own fault….I’m not going to help you.

            We’ve followed your PLAN for the last 35 years……and the result is…..the MW is below Welfare Income…..and 50 million people are on Food Stamps….due to the failure of YOUR PLAN.

            You call the MW….A GIFT…..you will never agree…..a wage is a payment for WORK.

            You fail to see a basic economic point in the current MW……it is not a subsistence wage….for a MW paid worker to survive…..it currently takes the combination of his or her wage……and….Government Tax Payer Welfare…….And YOUR PLAN removes the Welfare.

            I agree with you…..some people will game the system.
            If I had control of all of society.
            I would make Welfare a subsistence income.
            Any wage, for any business, would pay a wage above Welfare.
            Every worker would have a higher standard of living….than anyone that does not work and lives on Welfare.

            The problem with YOUR PLAN is…..instead of paying Welfare to the disabled, children, the elderly…..you allow business to pay a wage below subsistence……taking away any incentive for a worker to go get a job…..and then propose cutting Welfare to FORCE them to get a job…..and that HURTS those who truly need Welfare to live…and your refusal to answer their call for HELP.
            Shame on you.

            History has proved YOUR PLAN is a failure……Let’s try my approach…and increase the Minimum Wage.

          4. John

            John to Baffling 12/17/14 at 7:18 am,
            Thanks for your review of our history…..and our adaption to economic conditions to many of our people….in response the our economic diversity.

            Andre’ presents the positions of many people…….It’s valuable to debate both sides….and increase the awareness of all of us.

            Thanks for your inputs.

          5. baffling

            john,
            you do a nice job defining the interplay between the minimum wage, workers and welfare subsidies. most people do not open their eyes to the fact that corporations are subsidized by the government for employing minimum wage workers. we have direct control of the magnitude of our welfare subsidy by defining the minimum wage. it is simply baffling to see people continue to believe a low minimum wage and no welfare is truly a solution to our problems. keep up the good work!

          6. John

            John to Baffling 12/17/14 at 2:40 pm,
            Thanks for your inputs.

            I think I have presented my case for an increase in the Federal Minimum Wage.

            On Nov. 4,2014…..Voters in 5 more States have approved an increase in the State Minimum Wage.
            That tells me …..workers are aware of the benefits to society of raising wages.
            I feel bad for the States that fight that trend…..and force their workers to continue to live in poverty.

            Thanks for being part of this debate.

            Merry Christmas.

        2. John

          John to Andre’,
          You laughed at my comparison of the GI Bill of Rights…..and the Federal Minimum Wage.

          They both require Congressional Action…..and are attempts to improve our Country’s economic conditions in the future.

          Sorry…you overlooked the obvious connection.

          1. Andre'

            Why the comparison of providing funds to those two groups was funny because you were oblivious that the returning veterans were disciplined, appreciative, motivated and eager to do what they had to do to excel whereas welfare is mostly bestowed on undisciplined, unappreciative, unmotivated and slow to work themselves out of the hole they are in (based on the fact that we have a stagnant poverty rate and a lot of America’s “poor” areas are crime-ridden and dangerous.) Like you said that the veterans took the GI Bill and made them and this nation soar while after FIFTY years of enhanced welfare we still have about 15% of Americans in poverty, violent poverty in a lot of areas.

            It is just telling that you refuse to see that one group was worth the expense, but you think the other, after fifty years of lack of achievement still should be supported with even more welfare, free phones, a higher MW and before the bust, ensured an easy path to home ownership (even if both them and the bank knew that they would NEVER be able to make the payments.) You made the link between the two groups as proof that if one is good, the other is too. One was a complete and earned success while the other not only failed but instead of people like you who crunch and squeeze numbers and stats looking at the HUGE amount of money spend on “the war on Poverty” should have concluded that it is a galactic mistake and dismal failure and recommend we do something else! Instead you just want to throw more money down that pit and now use the argument that since the MW puts its recipients BELOW the welfare recipients, the MW NEEDS TO BE RAISED. how about this; MAYBE WE NEED TO LOWER WELFARE TO BELOW THE THREASHOLD OF THE MW. “The War on Poverty” has been yet another war that Democrat leadership (what it is) has lost, but instead of Iraq and Afghanistan, you keep funding the lost cause infinitum.

            Pal, welfare and the desire to help the poor help themselves through increases in the MW while noble and ambitious, has just not worked. Do you want another fifty years of producing an unappreciative, unresponsive and stagnant low income population just because it makes you feel good? If that is the case just say so, I understand compassion, just don’t act like what you want to do is based on thinking that the 15% of poor Americans will suddenly appreciate the efforts and wealth GIVEN to them and start working, going to school and saving so they can go from poor to middle class like my folks did. It can be done, but not with a systemic handout program or a higher MW safety net; it was worked for millions of Americans. The poor in violent areas complain that the violence is due to the poverty, but unlike other groups (Italians, Irish, Chinese, Cubans and others) they controlled the violence and solved the problem (with little or no governmental assistance) by being successful and moving up and out. Why can’t this be done now? We have tried for fifty years to help and help and help, but still the problem persists; so EXACTLY who’s fault is it? Honestly who is responsible for this horrendous failure?

            I guess the real question is what makes this group of poor Americans incapable of upward mobility? ALL the other groups faced horrendous persecution and discrimination, but they worked through it and now are great Americans, so why in the last fifty years we have has such a persistent poverty problem even though great-hearted people like yourselves have provided “the poor” with every possible leg-up, money, food, phones, homes and now health care but we still have %15 of Americans who are dissatisfied, violent and still in poverty? We really ought to find the real drivers of that behavior.

            That question is the 900 pound gorilla in the room that needs to be addressed and discussed way before we spend another fifty years of national wealth on a very noble, but lost cause.

          2. John

            John to Andre’ 12/17/14 at 2:31 pm

            I’m sorry you are unable to provide an argument that responds to facts and includes reasoning.
            Many of us have biases….yours is very deeply rooted.

            Good Luck in your future.

            Merry Christmas.

  55. baffling

    andre, we understand you were born with a silver spoon in your mouth and believe you actually worked hard and sacrificed to achieve your success. you obviously understand the issues facing minorities and the poor by your in depth descriptions of their plight. the poor are poor because they made bad decisions and chose to live that life. if only they had saved some money and gone to college we would not be having this discussion. they really should have decided to enroll at harvard and earned an mba. these kids chose the wrong parents, so they should simply deal with it. don’t they understand life is easier when you choose a parent who pays for your mistakes and enrolls you in life’s possibilities? stupid people deserve what they get for not doing the right thing. a 12 year old sitting on a park bench with a pellet gun deserves to be shot dead in the poor part of town, right?

  56. Andre'

    Baffling, there is no talking with you, at you or near you. You are insulting, ignorant, assumptive and arrogant all at the same time. There is no possible way to address what you have attempted to write and I am sure other liberals cringe at your statements as they don’t make one logical step forward, are incomprehensible to address and simply are meant to inflame, not solve problems. You have no authority to assume anything more than what I have said and inexplicably bringing in a shooting of a child into this is just bizarre. “The poor” that have the ability to better themselves but chose not to in preference to blame others for their plight and think they deserve others money because they have none are very different than the ones who for one reason or another have every desire to better themselves through hard work but have severe limitations or crippling issues. Unfortunately the former spoils it for the latter. You defend both based on the perpetual needs on the first but the true plight of the latter. Sorry, but you do not make much sense and I get it; you deserve perpetual welfare, in unlimited qualities because of …what? Because of what? Honestly why should the taxpayer GIVE you more money? Tell me?

    1. baffling

      andre, the child i mentioned was a poor child shot in a poor neighborhood in cleveland very recently. it is an example of the environment poor people must overcome just to survive, much less succeed. but you are adamant the poor choose their destiny. obviously you do not understand the reality of the situation.

      “Honestly why should the taxpayer GIVE you more money? Tell me?” then you are ready to give up your social security and medicare welfare checks, right?

      1. Andre'

        The death of that person was the result of a horribly tragic event that everybody has applied different drivers as the cause but absolutely has no place being used to try to make a point about the price of poverty or that it is tough to be poor.

        As a matter of fact if given a choice of cutting my own EARNED SS and Medicare payments in favor of a more sensible entitlement distribution program that keeps the politicians from using that fund like a slush fund, I gladly would. How? I have worked and obtained sufficient EARNED private benefits so I do not NEED the entitlements that I worked to achieve.

        Why don’t you just quit while you are behind; you are getting nowhere and with John you guys are still trying to support a failed welfare program that has not decreased poverty in half a century and has only produced multi-generational welfare families who are arrogantly unappreciative in their demands for more and more entitlements. Really, we need to try something else.

        1. baffling

          “The death of that person was the result of a horribly tragic event that everybody has applied different drivers as the cause but absolutely has no place being used to try to make a point about the price of poverty or that it is tough to be poor.”
          you don’t see little kids playing in the shaker heights neighborhood of cleveland getting shot within seconds of the police arriving. as i said, it is a rather difficult environment to grow up and succeed in. you fail to understand the poor environment. those born with a silver spoon in their mouths have nooooooo idea, and that is what makes folks like you dangerous.

          1. Andre'

            “Folks like me dangerous”? The two NYPD policemen who were executed by something lower than an animal and you call ME dangerous? What is dangerous is sustaining a population, no matter how small or for what excuse, that values its own values, standards and morals so different than the mainstream population that we can no longer safely live side-by-side. For the last fifty years the minority has demanded that the majority appease, adjust, donate, sacrifice and fund just for them and it has not worked no matter that trillions or dollars have been spent, millions of non-minority job applicants never got job they were qualified for because they did not fit the required minority hiring requirements resulting in economic hardships to millions of workers willing and qualified to work and many, many Americans supported the notion of providing a leg-up to those who needed it. The result? No breakthrough achievement, no accountability for the sustained failure of the minority and certainly no appreciation for the half-decade of effort by this country. Although there may be stats and pie charts that show that sustained welfare and increases in everything form the MW to forcing Americans to buy more health care that they need or want just so the minority of poverty-level citizens will be provided health care at no charge, the fifty-year long experiment of the “Great Society” has been a dismal failure, and it is no due to the majority not giving enough, not sacrificing sufficiently or the majority not embracing diversity. The failure to thrive is simply due to the minority not taking what they have been given and using it to better themselves. Just. Like. That.

            The facts that prove this after fifty years is simply irrefutable.

            Now what?

          2. baffling

            andre, after fifty years we still have people born with a silver spoon in their mouths believing they have the solution to problems faced by minorities and the poor, and that is our problem. fortunately, with every year people who led our nation in ways that not only tolerated but legalized discrimination are slowly disappearing. once those entitled and embittered people are gone, we will have a better chance to face our problems head on and provide solid solutions.

            “The two NYPD policemen who were executed by something lower than an animal and you call ME dangerous? ” two uniformed police officers gunned down a 12 year old in cleveland in broad daylight, and you appear to have no understanding of the link between the “tragic event” and the socio-economic class of the boy. as you say:
            “The death of that person was the result of a horribly tragic event that everybody has applied different drivers as the cause but absolutely has no place being used to try to make a point about the price of poverty or that it is tough to be poor.”
            i beg to differ. socio-economic biases are a big driver in these types of events. you are dangerous because you display those biases without remorse.

  57. Andre'

    John,
    Thanks for the typical liberal “holier’than-thou” attitude and unasked judgment when faced with facts that you cannot refute, nor have the ability to address complex cultural issues you would rather ignore. Instead, like a one trick pony, and a die-hard tax and spend Democrat, you want to throw more and more tax money at a chronic problem instead of realizing that after fifty years of failure of the social experiment that “The Great Society” turned out to be, SOEMTHING ELSE EXCEPT ECONOMICS is at work here. You want to provide for the poor which is noble and helps keep you smug at night, but you base your high ground on individual anecdotal facts that welfare and public assistance helps the truly deserving (which it does) but ignores the vast majority of recipients who use other’s taxmonies (or an enforced artificially higher MW) continue to live in poverty, have more children, and have long since dropped out of looking for work or a better job in favor of multi-generational welfare families. And why not? They have what they need and they can get dummies like you to get them more as long as they keep voting in liberals like yourself that never ask WHAT HAVE YOU DONE TO DESERVE THIS but just HOW MUCH MORE DO YOU WANT? Yes, take care of the poor, but find out why after FIFTY years of welfare IT HAS NOT HAD THE DESIRED EFFECT. For God’s sake this is the richest nation in the world and after half a century of giving EVERYTHING “the poor” has wanted, needed or might help, WE STILL HAVE THE SAME PROBLEMS, ISSUES AND POVERTY that we had in the sixties; IT IS TIME TO LOOK BEYOND ECONOMIC MODELS TO SOLVE THE PROBLEM.

    Do you agree?

    Simply as that; the problem with American poverty may quite possible culturally based, and no amount of more of this or that WILL EVER pull, tug, pry or entice some poor Americans into the middle class.

    I guess the big difference between us is you wish to continually enable and empower those people while I want to change the paradigm and provide a different “tough love” motivation. I don’t have a problem with that.

    No matter, you have a Merry Christmas yourself.

  58. Ricardo

    John,

    You are very confused. Take a microeconomics course, or better yet start a business, then come back and read what you have written.

  59. Andre'

    Baffled, What you say is based on ignorance and mistaking that everybody wants to agree with you, well you are wrong and you should come to grips with it.. I worked hard and earned what I have and after seeing a portion of my wages being used and misused for many decades for an unappreciative and stagnant minority who feels no need to acknowledge the sacrifice a nation has made for them or to seize the opportunities that others sacrificed for and failed to use to break the cycle of poverty is a huge cultural failure. By the way the NYPD officers were sitting in their car and were killed from ambush in cold blood by a person bent on killing two policeman, and the person shot by officers brandished an air gun that was modified to resemble a real pistol and refused to drop it when told. By ANY definition of ANY laws that meets the threshold of a deadly threat under the law and his death, while unfortunate, was completely avoidable if he had complied with the order. The two officers were murdered a despicable animal, that is absolutely true and trying to equate the two in impossible. It may be time for you to understand this is not the sixties and the nation will not agree that the police should dictate their activities on enforcing criminal law based on a race-based subjective bias, especially when it come to self-protection. I have been around police and always listen to them so does any other sensible person, to not to do just because you feel that you are above the law is incredibly arrogant and in the case of that person in the park, a fatal flaw.

    1. baffling

      “the person shot by officers brandished an air gun that was modified to resemble a real pistol and refused to drop it when told. By ANY definition of ANY laws that meets the threshold of a deadly threat under the law and his death, while unfortunate, was completely avoidable if he had complied with the order. ”

      obviously you have not seen the video of the 12 year old shot dead by a police officer. the cop car charged into the park and slammed its brakes directly in front of the 12 year old boy sitting on a bench. the cop jumped out of the car and shot the child within 2 seconds of the automobile stopping. there was no warning to drop the gun and refusal to comply with the order. at that point the cops refused to provide medical aid to the 12 year old child dying at their feet. apparently you know absolutely nothing about this situation except what may have been repeated on faux news, but you certainly acted like you are knowledgeable. and this is why you are dangerous and a relic of a culture nobody wants any longer.

      “I have been around police and always listen to them so does any other sensible person, to not to do just because you feel that you are above the law is incredibly arrogant and in the case of that person in the park, a fatal flaw.” not sure where in the constitution we give the police the right to be judge, jury and executioner of a 12 year old child.

      1. Andre'

        You didn’t mention that he did have a pellet gun in his hand (as you have in previous posts) and you stake all of your beliefs on a video that did not pick up every sound. The shooting while tragic could have been mitigated had the person not been holding what was specifically modified to appear like a pistol. His death while unfortunate is a learning moment to people who might think that based on TV and movies MIGHT or SHOULD disregard the safety of themselves and other on the concept that the gun might not be real and engage in a lengthy dialogue while a potential killer is holding a firearm in a threatening manner, well in real life an officer faced with a person holding a firearm and does not respond to commands to disarm has demonstrated sufficient intent to warrant use of deadly force and will shoot almost every time. You can push this rock up this hill over and over, but this person would be still alive had he done any of the following;
        1. Not modified a pellet gun to look like a real firearm.
        2. Not flashed it around as if it was real and he was armed.
        3. Did not hold or grab it when police were arriving
        4. dropped the gun when told.
        He had all these ways to alter the outcome but did not and the outcome was tragic, but not outside the law.
        The two officers shot in Brooklyn were killed with no cause, no reason and no justification at all. The person who shot them was really was a feral dog.
        There is no comparison.
        Andre’

  60. baffling

    andre,
    what did the 12 year old do that was illegal? absolutely nothing, and yet he was shot and killed because he was black in the poor part of town. or are we not allowed to carry guns in public? note he never fired the “weapon”.

    “you stake all of your beliefs on a video that did not pick up every sound.”
    true. but you stated all your beliefs without having even seen the video. at least i saw the best evidence available before commenting.

    “He had all these ways to alter the outcome but did not and the outcome was tragic, but not outside the law.”
    it most likely will not be outside the law, and most probably the shooting officer will be charged. as an aside, that officer was also terminated from another neighboring police force because his superiors did not feel he was emotionally stable for the position. will you still defend this officer when/after he is found guilty of his crimes?

    1. Andre'

      What you really, really need to understand is this whole issue is about the difference between blaming everybody and everything instead of taking responsibility for individual actions. This person would be alive had he not thought he was above the law, not presented what was legally a deadly weapon and then compounded the mistake by not disarming. This person simply caused his own death. If it is true that the poverty stricken and minorities are so afraid of the police then why did this person not protect himself by either not carrying a pellet gun modified to look like a real firearm or disarming as the police were approaching. Either he wanted the outcome as it happened (suicide by cop) or he did NOT fear the police destroying the argument that minorities are afraid of the cops.
      By the way previous actions that show a pattern were ignored in the cases of Trayvon Martin and Michael Brown, both proven violent problem-makers and, so why do you try to include past issues with this officer? The video of Brown jacking a store and roughing up a businessman was decried as “character assassination” but you want to use previous actions of this cop as proof of character? That is just BS and invalid.

      Once again everything is about you and your cause; here is a clue; this isn’t the 1960’s where there was no counter-argument or evidence as there is now that for fifty years of getting every advantage and every break, the “poor” in America are still disenfranchised, arrogant, unappreciative and worse of all have failed to use the largesse of this nation that was presented to them on a silver platter to better themselves. That is a fact.

      As a result there are more and more people who see the marches here in 2014 that support criminals and threaten the police and society in general while DEMANDING even more societal concessions are no longer willing to support these efforts. It is time for you and others to look around and see that it is up to you, not me, to act within the law, worker harder and stop acting like you deserve every privilege just because you still have the media wrapped around your finger. You don’t want to get shot? Act nice and polite to the police like the rest of us. Do what they say and YOU WILL NOT GET SHOT. The VERY heart of EVERY recent issue (not including the two officers assassinated in NYC) is the persons who got shot demonstrated an attitude so bad that they were unable to make decisions that rational people would have done TO PREVENT THE VIOLENCE THAT OCCURRED.

      It is time for you to determine if the cultural arrogance and inability to live within this society fully respecting others, including accepting police authority, that we have increasingly have seen cannot be changed to where it is possible to live together once again. That is up to you.

  61. baffling

    andre
    “The VERY heart of EVERY recent issue (not including the two officers assassinated in NYC) is the persons who got shot demonstrated an attitude so bad that they were unable to make decisions that rational people would have done TO PREVENT THE VIOLENCE THAT OCCURRED.”

    what attitude did the TWELVE YEAR OLD CHILD give to be shot dead in a park? as you say “Either he wanted the outcome as it happened (suicide by cop) or he did NOT fear the police destroying the argument that minorities are afraid of the cops.” rather vile view of the child.

    and why did i bring up the past history of the shooting officer? you give a police officer a license to shoot and kill. i think their past behavior is very relevant. on the other hand, not sure why you would be interested in smearing the victim of a crime?

    what attitude did Trayvon Martin (since you brought him up) give that deserved to be shot? oh, thats right, unarmed black kid should not be outside of his poor neighborhood and should let a stalker attack him.

    “You don’t want to get shot? Act nice and polite to the police like the rest of us. Do what they say and YOU WILL NOT GET SHOT. ”
    just to be clear, cliven bundy and his band were armed threats who refused to obey the authorities. you would have defended their execution as well?

    again i reiterate, the only upside to the current situation is that people with such vile attitudes towards the poor and minority are a relic of the past and slowly disappearing. it is very clear you have a poorly biased view of the plight of the poor.

Comments are closed.