Should salaries be capped?

[cynic]

Ah, this is where someone trots out the mythical hardworking man on minimum wage with an invalid wife and 13 crippled children.

Most people on minimum wage are the young, just getting their feet on the economic ladder, and supplemental wage earners.

.

then why bother removing it. As another poster said, if most adults are getting paid above it, then what is the point?

Now it’s my turn to ask a question: and how exactly does somebody survive on $0 per hour? Because that’s what people get when their jobs go away, are exported, or are taken over by the labor Black Market.

.

what kind of business could only survive by paying it’s full time adult staff less than $5.50 per hour?

Aside from this, I think your argument is built of a false premise - that employers pay their staff as much as possilbe given the circumstances, as much as they can while breaking even or making an acceptable annual profit. This is nonsense, Business exists to maximise profit and increase share price, hence the desire to reduce labour costs. If there is cheaper a labour available elsewhere then it will be taken advantage of regardless of how much profit is already being made. These jobs have been exported because the option was *there. *And now you would like to see adult workers in the U.S, with your high cost of living,being paid less than $5.50, competing with third world labour. Who is going to pick up the cost, would you be happy with the government topping up their wages so these new class of low paid workers can live? No - then what are their options.

Oh and before you bring out the cost of living reply - how goods not made locally affected by a minimum wage, how are rents, health insurance?

They also have to ship their products thousands of miles – and that adds to the cost. Had our government held inflation down, not kept bumping up the minimum wage, and insured all Americans got a good education, foreign workers couldn’t out-compete us on anything.

…and a significant number of people living on less than $5.50.

 

[cynic]

must apologize for the spelling mistakes, obviously I’m not fulfilling my full potential:blush:

 

[vern_humphrey]

then why bother removing it. As another poster said, if most adults are getting paid above it, then what is the point?

By removing it, we allow those with few skills to bargain effectively for employment. By keeping, we lock them out of the marktet.

Remember – the key is not how many people earn Minimum Wage, it’s how many people earn nothing, because their skills are not marketable at mimimum wage.

what kind of business could only survive by paying it’s full time adult staff less than $5.50 per hour?

My father cleared the farm in Oklahoma, squared up the timber for railroad ties, and sold them for $0.50 apiece – they could do four a week, so the family survived on $2.00 a week.

Aside from this, I think your argument is built of a false premise - that employers pay their staff as much as possilbe given the circumstances, as much as they can while breaking even or making an acceptable annual profit. This is nonsense, Business exists to maximise profit and increase share price, hence the desire to reduce labour costs.

Ahhh, did you forget something?

Business in a capitalist system is competitive. That means the workers are competitors, too. There is not a huge surplus of highly-skilled workers – so businesses must bid for their services. Adam Smith’s “Invisible Hand” works for labor, just as it does for goods.

If there is cheaper a labour available elsewhere then it will be taken advantage of regardless of how much profit is already being made. These jobs have been exported because the option was *there. *And now you would like to see adult workers in the U.S, with your high cost of living,being paid less than $5.50, competing with third world labour.

As opposed to seeing the most unskilled earning $0.0 an hour?

Who is going to pick up the cost, would you be happy with the government topping up their wages so these new class of low paid workers can live? No - then what are their options.

As of now, they have no option – most unskilled workers can earn nothing, because the government has priced them out of the market. Allow them to set their own prices, and many of them will find work. And having found work, they have the opportunity to upgrade their skills, seek more responsibility and move up the economic ladder.

It is no kindness to condemn people to unemployment for life!

Oh and before you bring out the cost of living reply - how goods not made locally affected by a minimum wage, how are rents, health insurance?

I assume you meant something here, but I’m not sure what.

…and a significant number of people living on less than $5.50.

There is no reason we have to have a high cost of living – it’s due to inflation. On factor in inflation is mimimum wage.

 

[stinkcat_14]

On factor in inflation is mimimum wage.

This is just flat out wrong. In 2006, there were 409,000 people earning the minimum wage. If all these people were working 40 hours per week, 50 weeks per year (which is a high estimate), then the increase in the minimum wage would cost employers another $600 million. This is a drop in the bucket compared to our Personal Income of almost $12 trillion. While it is possible that the minimum wage could contribute to inflation, at the level it is today, the impact on inflation is tiny at best.

 

[vern_humphrey]

This is just flat out wrong. In 2006, there were 409,000 people earning the minimum wage. If all these people were working 40 hours per week, 50 weeks per year (which is a high estimate), then the increase in the minimum wage would cost employers another $600 million. This is a drop in the bucket compared to our Personal Income of almost $12 trillion. While it is possible that the minimum wage could contribute to inflation, at the level it is today, the impact on inflation is tiny at best.

There are several ways mimimum wage impacts inflation – the first is through the loss and export of jobs. The second is through the added taxes required to support people who have no jobs. The third is through upward pressures on salaries. If you give mimimum wage workers a raise, you have to give the next tier of workers a raise, and if you give them a raise, you have to give the next tier, and so on.

 

[stinkcat_14]

There are several ways mimimum wage impacts inflation – the first is through the loss and export of jobs. The second is through the added taxes required to support people who have no jobs. The third is through upward pressures on salaries. If you give mimimum wage workers a raise, you have to give the next tier of workers a raise, and if you give them a raise, you have to give the next tier, and so on.

How does the loss of jobs make inflation higher? That would put downward pressure on wages and push inflation lower rather than higher.

Of course, the second question is, how many people have lost jobs because of the increase in the minimum wage. According the unemployments numbers the answer is very few. Finally, wages have been rising accross the board, so increasing the minimum wage does not mean that everyone else’s wages have to be raised proportionately.

 

[vern_humphrey]

How does the loss of jobs make inflation higher? That would put downward pressure on wages and push inflation lower rather than higher.

But the mimimun wage law prevents downward pressure on wages! As a result, people who were productively working now become a liability which the rest of us must pay – and without receiving any goods and services in return…

Of course, the second question is, how many people have lost jobs because of the increase in the minimum wage. According the unemployments numbers the answer is very few. Finally, wages have been rising accross the board, so increasing the minimum wage does not mean that everyone else’s wages have to be raised proportionately.

Unemployment figures do not account for those who are no longer looking for work. To answer your question, don’t look to the unemployment figures, but look to those drawing welfare.

As Walter Williams pointed out, Black teenagers are three times as likely to be unemployed as whites. This shows where the imact of minimum wage is felt most – among the very people it is supposed to “help.”

 

[stinkcat_14]

But the mimimun wage law prevents downward pressure on wages!

Not when 98% of the workforce earns more than the minimum wage and most of the minimum wage workforce is in the service sector, where jobs are less likely to be exported.

As a result, people who were productively working now become a liability which the rest of us must pay – and without receiving any goods and services in return…

Unemployment figures do not account for those who are no longer looking for work. To answer your question, don’t look to the unemployment figures, but look to those drawing welfare.

Of course the question is, how many high school graduates, who have no children out of wedlock, and have no substance abuse problems cannot find jobs because of the minimum wage. My guess would be very few. But if you have some numbers on this, I would like to see them.

As Walter Williams pointed out, Black teenagers are three times as likely to be unemployed as whites. This shows where the imact of minimum wage is felt most – among the very people it is supposed to “help.”

See my point above. Why did firms move out of the central cities and into the suburbs? It was not because of the minimum wage.

 

[vern_humphrey]

Not when 98% of the workforce earns more than the minimum wage and most of the minimum wage workforce is in the service sector, where jobs are less likely to be exported.

Smokescreen!

It isn’t the “workforce” we’re talking about, but the " no longer working force" – the people permanently unemployed.

Of course the question is, how many high school graduates, who have no children out of wedlock, and have no substance abuse problems cannot find jobs because of the minimum wage. My guess would be very few. But if you have some numbers on this, I would like to see them.

Thank you for showing us how the poverty cycle works – by blocking off the only route out of poverty for those who did not graduate from high school, had children out of wedlock and so on, we leave them sunk in hopelessness – and no wonder they abuse drugs!

 

[stinkcat_14]

Thank you for showing us how the poverty cycle works – by blocking off the only route out of poverty for those who did not graduate from high school, had children out of wedlock and so on, we leave them sunk in hopelessness – and no wonder they abuse drugs!

If the minimum wage is the cause of all of these problems, then how come we have the same problems in Connecticut where nobody works for the minimum wage?

 

[vern_humphrey]

If the minimum wage is the cause of all of these problems, then how come we have the same problems in Connecticut where nobody works for the minimum wage?

Nobody?

You have those problems in Connecticutt because of the impact of minimum wage nation-wide, and the after-effects of previous hikes. Today’s ghetto kid has no work because the jobs he could do long ago fled the state. He’s on drugs because he has no job and no hope.

 

[mapleoak]

How does the loss of jobs make inflation higher? That would put downward pressure on wages and push inflation lower rather than higher.

Because the COST of labor is then higher. Higher labor cost equals higher cost of production or providing service equals higher prices equals weaker dollar.

Of course, the second question is, how many people have lost jobs because of the increase in the minimum wage. According the unemployments numbers the answer is very few.

which would favor inflation. Higher pay has to come from somewhere. It is not free.

Finally, wages have been rising accross the board, so increasing the minimum wage does not mean that everyone else’s wages have to be raised proportionately.

What happens is that the incentive for a worker to seek education to perform skilled labor is diminished since the margin between the lowest paying jobs and skilled labor is reduced.

 

[hasikelee]

I disagree with capping salaries.

When I have finished school, I intend to pick up the family business and drive it to success. I hope I become super duper wealthy.

So maybe it is appropriate for the company to protect its assets and employees from a wayward CEO (as we saw with Bob Nardelli). I can agree with that.

Capping salaries completely overdoes it.

 

[cynic]

So vern, if raising the minimum wage has an upward pressure on all wages, then what do you think abolishing it will do? Low wages across the board might just plumit, which is ok by you I guess since you still havn’t aswered the question ; how do people pay a modest rent and grocery bill while working on less the $5.50 an hour? (feel free to not answer that one). What are they going to do, exactly.

Please tell me that, rather than letting those with little skills into the workforce, this isn’t just about employers saving on labour costs for their existing full time adult workers. Last time I heard there wasn’t much of an unemployment problem in the U.S, in fact a skills/labour shortage. What then would the motivation be for abolising an already low and mostly irrelevant minimum wage - to push down wages perhaps, totally ignorant to the societal costs of having a large number with little or no spending power (bad in in itself since it reduces the number of consumers), struggling to afford accomodation and food?

 

[cynic]

I’ll just throw this out there :

You have little interest in whether those currently unemployed can join the labour market. Instead this is mainly about reducing costs to employers by lowering wages and conditions for existing employees. The goal is to have as a group, a low income workforce that can be employed and fired easily, working for very long hours and with no leave, overtime rates, lunchbreaks or anything else that might interfere with the bottom line. This will increase the amount of capital in the hands of management and investors - the constituents you naturally represent.

Other than that, these views are antiquated considering the labour demand and skills shortage found in most western countries.

 

[vern_humphrey]

So vern, if raising the minimum wage has an upward pressure on all wages, then what do you think abolishing it will do? Low wages across the board might just plumit, which is ok by you I guess since you still havn’t aswered the question ;

So, Cynic, how come wages haven’t plunged already? If your reasoning is correct, people making above minimum wage should already have seen their wages plunge to minimum wage.

How come this hasn’t already happened?

how do people pay a modest rent and grocery bill while working on less the $5.50 an hour? (feel free to not answer that one). What are they going to do, exactly.

Ah, here it comes – trotting out the mythical hardworking guy on minimum wage with an invalid wife and 13 crippled kids who need braces.

Now it’s your turn: how do people pay a modest rent and grocery bill while working on $0.00 an hour? (feel free to not answer that one). What are they going to do, exactly?

Please tell me that, rather than letting those with little skills into the workforce, this isn’t just about employers saving on labour costs for their existing full time adult workers.

No, it’s not. Minimum wage drives out low-skilled workers, inflicting far more misery than you can imagine.

Last time I heard there wasn’t much of an unemployment problem in the U.S, in fact a skills/labour shortage.

You heard wrong. Unemployment figures only list those who are looking for jobs. They do not list the chronic unemployed – those who have never worked. Those people are the legacy of Minimum Wage.

What then would the motivation be for abolising an already low and mostly irrelevant minimum wage - to push down wages perhaps, totally ignorant to the societal costs of having a large number with little or no spending power (bad in in itself since it reduces the number of consumers), struggling to afford accomodation and food?

The motivation would be to give the most unskilled and poorly-educated a chance to get their foot on the bottom rung of th economic ladder, of course!

 

[vern_humphrey]

I’ll just throw this out there :

You have little interest in whether those currently unemployed can join the labour market.

No, you have little interest in helping those currently unemployed to join the labor market.

The evidence is clear that Minimum Wage hurts the least skilled, most poorly-educated worker.

 

[estesbob]

I had been looking at this from the standpoint as an employer.In order to be fair I polled my staff to see what they thought about it. Not one of them wanted their salary capped.

 

[vern_humphrey]

The Americans With No Abilities Act (AWNAA)

WASHINGTON , DC - Congressional bill sponsored by Zzzzz Zzzzz (D-NV) proposes sweeping legislation which will provide new benefits for many of our neglected and impoverished citizens, namely the Americans With No Abilities Act (AWNAA). A bill that is being hailed as a major legislative goal by advocates of the millions of Americans who lack any real skills or ambition.

“Roughly 50 percent of Americans do not possess the competence and drive necessary to carve out a meaningful role for themselves in society,” said California Senator Yyyyy Yyyyy. “We can no longer stand by and allow People of no ability to be ridiculed and passed over. With this legislation, employers will no longer be able to grant special favors to a small group of gifted workers, simply because they have some idea of what they are doing.”

In a Capitol Hill press conference, House Majority Leader Xxxx Xxxxx and Senate Majority Leader Zzzzz Zzzzz pointed to the success of the U.S. Postal Service, which has a long-standing policy of providing opportunity without regard to performance effectiveness. Rep. Xxxxx pointed out that approximately 84 percent of postal employees exhibit no job skills whatsoever, making this agency the single largest U.S. employer of Persons of Inability.

Private-sector industries with good records of nondiscrimination against inept and incompetent workers include retail sales (52%), the airline industry (48%), and home improvement “warehouse” stores (45%). At the state government level, Department of Motor Vehicles also has a great record of hiring persons of little or no ability (73%).
Under the Americans With No Abilities Act, more than 25 million “middle no management” positions will be created, with important-sounding titles, but little real responsibility, thus reinforcing the illusory sense of purpose and performance.

The AWNAA mandatory non-performance-based raises and promotions will be given, to guarantee upward mobility for even the least gifted employees. The legislation provides substantial tax breaks to corporations that promote a significant number of Persons of Inability into middle-no-management positions, and gives a tax credit to small and medium-sized businesses that agree to hire one clueless worker for every two more talented hires.

Finally, the AWNAA Act contains tough new measures to make it more difficult to discriminate against the Non-abled by banning (for example) discriminatory interview questions such as “Do you have any skills or experience which relate to this job?”

“As a Non-abled person, I can’t be expected to keep up with people who have something going for them,” said Mary Lou Gertz, who lost her position as a lug-nut turner at the GM plant in Flint , Michigan owing to her lack of any discernible job skills. “This new law should really help people like me.”

With the passage of this bill, Gertz and millions of other talent challenged citizens will finally see a light at the end of the tunnel.

Said permanent Senator Ttt Kkkkk: “As a Senator With No Abilities, I believe the same privileges that we elected officials enjoy ought to be extended to every American with no abilities. It is our duty as lawmakers to provide each and every American citizen, regardless of his or her adequacy, with some sort of space to take up in this great nation.”

The bill is expected to come to vote in the first session under the next administration

 

[Byzcat]

Um, vern, you do realize that many People With No Abilities are, in fact, the horrifically overpaid CEO’s of corporations that plump their short term profits, and therefore stock values, by laying off and/or cutting the pay and benefits of the skilled workers who generate the revenue of the companies they had formerly worked for?