SRL Archive - World News

http://money.cnn.com/2013/02/12/news/economy/obama-minimum-wage/index.html?iid=s_mpm
I was watching a Recap of Obama's State of the Union address and saw that he wanted $9/hour to be the Minimum wage by 2015.

What do you guys think about this?
I believe that this might sort of ease the income gap between the poor, working, middle classes.
But at the same time, wouldn't items be devalued if more money was being given out to the people and then being put back into the economy?

Honestly I think its a good thing.. Minimum wage goes up through-out the years.. it used to be only a couple of cents back in the day. It will keep going up in time, maybe now its time for a new change.. $9 is it.

Maybe people will stop complaining about gas prices, or things being to expensive to buy. Company owners might not be to happy, more money out of their pockets.
Oh well, im in the military, minimum wage is like 30cents here! :D

On the surface, it may seem as if a higher minimum wage will benefit the poor.
This is often not the case, as it does not guarantee the lower income class jobs. An increase in minimum wage would just mean that industries will attempt replace labor-intensive processes with capital-intensive (machinery) ones, and cut down on unprofitable low-end activities (jobs that are usually employed with lower skill workers). Also jobs at the lower end of spectrum will become much more competitive, eg. there may be a job that was originally $5/hr, and when it was forced to increase to $9/hr, all workers who are originally working within the range of $5-9 previously would be competing for the vacancy, leading to higher unemployment rate among the lower income groups, hence an increase in income inequality…

I don't know if this is a good idea or not.
Here in canada bc, I believe the minimum wage is 10.25$. Honestly even with that small increase, that isn't no where near enough money you need to be able to afford to live on your own for example let alone support a family. With rent being a minimum of 950$ in most places is just hard to move out of your parents, its why I sadly still live at home.

1liter of gas costs half as much in USA as it does to Sweden, and they complain about the gas prices?

From: Sirenia
1liter of gas costs half as much in USA as it does to Sweden, and they complain about the gas prices?

Every day my friend… Every. Day.

How will this fix anything. Personally it wouldn't affect me (minimum wage in Oregon is $8.80), but wouldn't this just add problems? Some businesses barely break even and increasing the minimum wage will just prevent them from hiring more employees. Sure, increasing minimum wage would help provide a better quality of life for the lower class but it would just increase the amount of unemployed people. Of course i'm not saying this will surely happen… just an idea. Correct me if i'm wrong.

From: Neznam
I don't know if this is a good idea or not.
Here in canada bc, I believe the minimum wage is 10.25$. Honestly even with that small increase, that isn't no where near enough money you need to be able to afford to live on your own for example let alone support a family. With rent being a minimum of 950$ in most places is just hard to move out of your parents, its why I sadly still live at home.

Same thing in America… I'm lucky to live in a state with a very high minimum wage but cheapest apartments you can find in the area run for around $750 (also take in to consideration the money you're going to spend on buying a weapon… These are in shady neighborhoods). This is why you go to college and study for a degree…

It's going to be all the same..
If the wage goes to $9/hour then all items will cost a bit more which makes it the same. Just imagine if it went down to $5/hour, don't you think that everything you buy must also go down in price. In Canada the wage might be more but just look at all the items and they cost $1-$2 more than in the U.S.

Increasing every one's pay means all those companies will have to increase what they charge to make up the difference. The companies that didn't have to make a change can still increase their prices because everyone else did and now people can afford more. When that happens, not only do the minimum wage people now earn essentially the same amount of money as before, but the higher income people now essentially earn less. I don't see much of a benefit to it, honestly.

This is turning into a purely ideological discussion.

As far as I know, there are no clear and peer reviewed studies about the negative effects of minimum wages. The critics are based on purely theoretical models of offers and demands which, anyway, are already heavily distorted by our society.

Wikipedia actually quotes quite a few interesting studies about this:
http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies

If that's all you're going to read, I'd like to point out one quote:

Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, although others confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects.[83]

Therefore, I suggest that raising the minimum wages won't lead to the apocalypse and that the benefits are more important than the inconvenient.

From: Silentcore
It's going to be all the same..
If the wage goes to $9/hour then all items will cost a bit more which makes it the same. Just imagine if it went down to $5/hour, don't you think that everything you buy must also go down in price. In Canada the wage might be more but just look at all the items and they cost $1-$2 more than in the U.S.

Everything in Canada costs more than in America.
I live near the boarder and this is why almost everyone I know will go shopping in the States.
Why? Because, a pair of shoes in america will cost lets say 100$, in Canada those same shoes will be 170$. Now that the Canadian dollar is on par with the American, don't you think we all should pay the same price for the same item? The thing with Canada is that its tariff is around 29% for bringing in goods from other countries while in America its 2.9%(not exact but 2. something).

Saw this on TV, even a car BMW suvi x5 costs around 50k in the states, while in Canada that same car is 80k. 30,000$ is a huge difference.

Some people are just ill informed and when they see an increase in wage they think life will get easier, but it only gets more expensive to make up for it. It fools some people.

From: Neznam
Everything in Canada costs more than in America.
I live near the boarder and this is why almost everyone I know will go shopping in the States.
Why? Because, a pair of shoes in america will cost lets say 100$, in Canada those same shoes will be 170$. Now that the Canadian dollar is on par with the American, don't you think we all should pay the same price for the same item? The thing with Canada is that its tariff is around 29% for bringing in goods from other countries while in America its 2.9%(not exact but 2. something).

Saw this on TV, even a car BMW suvi x5 costs around 50k in the states, while in Canada that same car is 80k. 30,000$ is a huge difference.

Some people are just ill informed and when they see an increase in wage they think life will get easier, but it only gets more expensive to make up for it. It fools some people.

What? Are you saying that minimum wage is the reason these goods cost more in Canada? That is, at best, dubious causality.

Please explain to me how raising the minimum wage by a dollar or two leads to the cost of a BMW suivi being 30k more. I actually wonder if anyone involved in the production or the buying of the car works at the minimum wage to start with.

Your post is a clear example of what I mean when I said that this, for some, is a purely ideological debate where facts and logic come in options (no hard feeling, please re-read your post and tell me you disagree).

I wonder if I can do the same:
I just did a quick research and for the same quantity of maple syrup, a bottle cost 7,98US$ at a Walmart in USA while it's 6,97CA$ here. Therefore, minimum wage makes maple syrup cheaper.

From: Wardancer
What? Are you saying that minimum wage is the reason these goods cost more in Canada? That is, at best, dubious causality.

No no, I was just commenting on Silentcores "things being more expensive in canada by 1-2$" went a bit offtopic there.

Mainly this was mostly what I wanted to say
"Some people are just ill informed and when they see an increase in wage they think life will get easier, but it only gets more expensive to make up for it. It fools some people"

Agreeing with nivek.

Increasing minimum wage will result in the "needy" being layed off, because companies will just higher less people to make up for the lost profit..

From: Neznam
No no, I was just commenting on Silentcores "things being more expensive in canada by 1-2$" went a bit offtopic there.

Mainly this was mostly what I wanted to say
"Some people are just ill informed and when they see an increase in wage they think life will get easier, but it only gets more expensive to make up for it. It fools some people"

Agreeing with nivek.

On what basis are you claiming this? You accuse people of being ill informed, therefore I feel compelled of asking you your sources. Until then, I'll keep thinking that your opposition is ideological.

From: rjj95
Increasing minimum wage will result in the "needy" being layed off, because companies will just higher less people to make up for the lost profit..

Any source to back this up? I dislike when people state some things like if they were obvious truths without anything to back it up.

From: Wardancer
On what basis are you claiming this? You accuse people of being ill informed, therefore I feel compelled of asking you your sources. Until then, I'll keep thinking that your opposition is ideological.

Google "impact of minimum wage increase"
See on wiki arguments against it. Scroll down to "debate over concequences" and you'll see such things as

May cause price inflation as businesses try to compensate by raising the prices of the goods being sold

It is called being illinformed cause people right away think it will make life easier but if prices of good increase as wage has been increased then there is NO change.

Meh I earned 3,14€ an hour when I worked at an amusement park 2 years ago when I was 17 :S
Not really sure if people will really benefit - mainly based on similiar points that Riwu mentioned.

From: Wardancer
On what basis are you claiming this? You accuse people of being ill informed, therefore I feel compelled of asking you your sources. Until then, I'll keep thinking that your opposition is ideological.



Any source to back this up? I dislike when people state some things like if they were obvious truths without anything to back it up.

It's basic free market economics. But if you need a source I found this in your own quote:

Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, although others confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects.[83]

Although there's no major side effects clearly there's no benefit either if i read that correctly..

From: Wardancer

I wonder if I can do the same:
I just did a quick research and for the same quantity of maple syrup, a bottle cost 7,98US$ at a Walmart in USA while it's 6,97CA$ here. Therefore, minimum wage makes maple syrup cheaper.

Maple syrup is made in Canada quite a lot.. When last have you walked the streets without seeing a pine or maple tree? I believe even the flag has a maple leaf.. There is a hockey team just for maples..

Yes Minimum wage is the reason we get things more expensive. We earn more so we pay more. You think employers are just going to dish out more but make less when wages go up?

When the minimum wage goes up, prices almost always go up. Just take a look at the milk prices now in Toronto compared to when minimum was 8.50 or something. You'll notice quite a difference. Maybe the prices won't go up equally to that of the increase in wage but it will go up to "almost" balancing out the wage increase.

Of course minimum wage isn't the only reason but it IS one of them.

From: Brandon
Maple syrup is made in Canada quite a lot.. When last have you walked the streets without seeing a pine or maple tree? I believe even the flag has a maple leaf.. There is a hockey team just for maples..

This is correct, Canada produces more than 80% of the world's maple syrup, so most maple syrup in the US is probably imported from Canada. Not only that, but the US produces 5% of the world's maple syrup, so there are probably US tariffs on imported Canadian maple syrup in order to protect vermont maple syrup producers, which raise the price further.

From: Brandon

Yes Minimum wage is the reason we get things more expensive. We earn more so we pay more. You think employers are just going to dish out more but make less when wages go up?

When the minimum wage goes up, prices almost always go up. Just take a look at the milk prices now in Toronto compared to when minimum was 8.50 or something. You'll notice quite a difference. Maybe the prices won't go up equally to that of the increase in wage but it will go up to "almost" balancing out the wage increase.

Of course minimum wage isn't the only reason but it IS one of them.

Sure there is a correlation between milk prices and minimum wage, but how do you know there's causation? Maybe minimum wage increased in order to account for the rising cost of living, which would explain milk becoming more expensive.

If Obama says it so, then it is so.

From: Neznam
Google "impact of minimum wage increase"
See on wiki arguments against it. Scroll down to "debate over concequences" and you'll see such things as


It is called being illinformed cause people right away think it will make life easier but if prices of good increase as wage has been increased then there is NO change.

That is definitely cherry picking if you read "debate over consequences" as "negative consequences". As I quoted, it seems that the consensus appear to be that there is little to none negative effects.

From: rjj95
It's basic free market economics. But if you need a source I found this in your own quote:



Although there's no major side effects clearly there's no benefit either if i read that correctly..

Free market economics… how is that not ideological to the root? We're talking about unproven theories meant for a "perfect" world. We don't live in a free market.

How can we say no benefit…? People are making more money, raising their purchasing power.

From: Brandon
Maple syrup is made in Canada quite a lot.. When last have you walked the streets without seeing a pine or maple tree? I believe even the flag has a maple leaf.. There is a hockey team just for maples..

Yes Minimum wage is the reason we get things more expensive. We earn more so we pay more. You think employers are just going to dish out more but make less when wages go up?

When the minimum wage goes up, prices almost always go up. Just take a look at the milk prices now in Toronto compared to when minimum was 8.50 or something. You'll notice quite a difference. Maybe the prices won't go up equally to that of the increase in wage but it will go up to "almost" balancing out the wage increase.

Of course minimum wage isn't the only reason but it IS one of them.

The maple syrup was sarcasm. I tried to copy a certain logic. The point was to prove that there are many other factors than minimum wage to explain the difference in prices. Thank you for helping me demonstrate that.

As for milk, I'm not sure we can put a correlation between its price and minimum wage. We're talking about a HEAVILY regulated and subsidized market. In fact, in most Canadian provinces (including Ontario - http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90m12_e.htm#BK38), the price of milk is decided by law. From a political point of view, it might make sense to raise the price of such items after a minimum wage increase, but I'm not quite sure we can draw a real correlation from this.


EDIT:

I'm someone that really likes to put things in their historical perspective. I found this graph about the minimum wage of the last 70 years adjusted with inflation to give a clear idea of where it stood. As you'll notice, the idea of 9$ per hour really isn't all that outrageous.

http://blogues.lapresse.ca/hetu/2013/02/13/hausser-le-salaire-minimum-une-bonne-idee/
(Even if the core of the text is french, you should be able to understand the graphic.)

Now, if minimum wage was such a plague to growth, USA should have had an anemic growth when it was at its peak. Wasn't quite the case. Economy actually grew the fastest during those times. I'm certainly not going to draw a conclusion from this as there was certainly other variables in play, but, at least to me, it makes it clear that minimum wage isn't a plague.

http://www.motherjones.com/kevin-drum/2011/01?page=3

From: Wardancer
Free market economics… how is that not ideological to the root? We're talking about unproven theories meant for a "perfect" world. We don't live in a free market.

How can we say no benefit…? People are making more money, raising their purchasing power.

Yea umm.. let's say im the owner at a factory, I pay my workers $7.50 an hour. This law is passed and I am now required to pay then $9.00 per hour. Guess what im going to do? I'm going to lay 1-2 workers off.

From: rjj95
Yea umm.. let's say im the owner at a factory, I pay my workers $7.50 an hour. This law is passed and I am now required to pay then $9.00 per hour. Guess what im going to do? I'm going to lay 1-2 workers off.

Do you realize what you did and keep going is using hypothetical situations while completely ignoring other variables in play, grossly oversimplifying a complex situation? Your opposition is ideological. You just seem to repeat what you heard in the conservative media.

Minimum wages are only a fraction of the actual cost of a company. Otherwise, many more companies would simply fly away and produce their stuff in China/elsewhere.

From: Wardancer
Do you realize what you did and keep going is using hypothetical situations while completely ignoring other variables in play, grossly oversimplifying a complex situation? Your opposition is ideological. You just seem to repeat what you heard in the conservative media.

Minimum wages are only a fraction of the actual cost of a company. Otherwise, many more companies would simply fly away and produce their stuff in China/elsewhere.

If im repeating what's in the Conservative media then your repeating whats in the liberal media.

It's one thing if he was ajusting it to inflation. But hes not. If he raises the minimum wage it will have no effects. So why bother?

From: rjj95
If im repeating what's in the Conservative media then your repeating whats in the liberal media.

It's one thing if he was ajusting it to inflation. But hes not. If he raises the minimum wage it will have no effects. So why bother?

Nice try, but I don't watch tv (even less american tv).

If you looked at the graph I presented, you'd see that inflation lowered the "real" minimum salary over the years. Even going back at 9$ per hour doesn't even make up for the inflation. If I understand correctly, you're suggesting that he raises the minimum wage even more than what he suggested?

Also, who said it'll have no effect? That seems to be your twisted view. The quote states that raising the minimum wage has, at worst, "minor NEGATIVE effects". There is no question of the positive effects there. I'd say that you are twisting the quote.

As for the studies that showed negative effects (these studies are greatly controversial nowadays), the increase in the minimum wage was much superior to the employment lost. In other words, even the "worst possible outcome" has some good.