News Faster Small Business & Retail Job Growth in States w/ Higher Minimum Wages

[turbo]

You don't think this system will lead to rank degeneration due to the hordes of people who'd rather not work since they get paid the same amount anyway? You don't think this will be more debilitating to industry than a minimum wage?

Yes, instituting a dole would be a huge burden on our society and would be very expensive because you would not only have to pay indigent people for not working, but you would also have to pay the multitudes of bureaucrats and clerks needed to implement the system.

A low minimum wage is a gift to businesses and tax on all the rest of us, in the form of the supplemental goods and services that our local governments hand out to working people who can't make ends meet. When Wal-Mart moved to our former town of residence, lots of people moved into take those low-wage jobs with no benefits. They can't afford to buy or build houses on Wal-Mart wages, so they live in apartments and rented house trailers. Since they don't own property, they pay no municipal taxes and therefore contribute nothing toward the education of their children - that burden falls on those who own real-estate, primarily owners of residences. And health insurance coverage for their children also comes from government programs. Increasing the minimum wage would more equitably distribute the societal costs associated with helping to keep these families out of poverty. My property taxes increased by almost 30% in one year - my wife and I no longer live in that town. BTW, it's not just Wal-Mart. There was an explosion of low wage jobs as chain restaurants piled into take advantage of the traffic. You know that your little town is in trouble when pawn shops and rent-to-own stores start popping up like mushrooms.

 

[Jimmy Snyder]

They can't afford to buy or build houses on Wal-Mart wages, so they live in apartments and rented house trailers. Since they don't own property, they pay no municipal taxes and therefore contribute nothing toward the education of their children - that burden falls on those who own real-estate, primarily owners of residences.

But surely somebody owns those apartments and trailers. Who pays the taxes on them? Where does the money come from?

 

[Evo]

But surely somebody owns those apartments and trailers. Who pays the taxes on them? Where does the money come from?

Exactly, the rent they pay to the building owner pays the property tax on that building.

 

[turbo]

But surely somebody owns those apartments and trailers. Who pays the taxes on them? Where does the money come from?

I'm not saying that some tax money doesn't shake out somewhere. The point is that rental properties that these people can afford to rent are of extremely low value and are assessed accordingly. The people who try to keep their residences in nice shape are the ones footing the bill. Like I said, our property taxes increased about 30% in one year while the taxes on commercial properties, rental units, etc stayed flat. Some people stayed and tried to cope with the increase, but we decided to move out to a rural town with a stable tax base and a more realistic appraisal of residential property. If Joe Blow, the dealer in house trailers, sees an influx of low-wage jobs, the first think he will do is buy some vacant land, set up a bunch of used house trailers and rent them out. He will pay very little in property taxes because trailers depreciate so quickly, and because the property appraisers will not give the property a high value since it's just 20-30 aging house trailers crammed as close as codes will allow, with no trees, landscaping, etc. It's ugly, but that's the truth.

 

[Jimmy Snyder]

I'm not saying that some tax money doesn't shake out somewhere.

Does that mean that apartment dwellers do pay municipal taxes?

 

[turbo]

Example: 2 acre lot at maybe $5K cost populated with 20 aging house trailers worth $5 each would give an appraised value of $105K. That's far less than the value of our old house, and our taxes would be substantially higher because our house (though modest) was in a nice quiet residential neighborhood and the appraisers charge you for that. They also surcharge the owners of residences with mountain views and views of water (even if they don't have access to the water). OK, so now we've got 20 families living in 20 house trailers, and even if they only had one child on average (a VERY low-ball figure), there's 20 kids that have to go to school. I have Googled and found some information that the average cost of educating a child in public schools is about $6500 per child per year, though I don't know if that is reliable. Let's assume the cost is $5000 per child. That trailer park with 20 children then adds $100,000 to the cost of education in the town with a tax benefit of $105,000 x .014 = $1470 That's not a very good deal for the taxpaying home-owners of the town, especially when you factor in the cost of social services, heating oil assistance, food assistance, etc, that many of these families consume. I'm sure Wal-Mart and Taco Bell are happy with the situation, but I sure wasn't. A higher minimum wage isn't going to be a silver bullet, but it will help.

 

[turbo]

Does that mean that apartment dwellers do pay municipal taxes?

No, only the owners of those buildings. Many of them are tenements built during the mill-town heyday when shoe shops, the spinning mill, and woodworking mills were booming. They are not attractive or well-maintained, but that may be all a person working part-time minimum-wage jobs can afford. Like my trailer-park example, tenements are very low-value properties with similar tax liabilities for the town.

 

[russ_watters]

You don't think this system will lead to rank degeneration due to the hordes of people who'd rather not work since they get paid the same amount anyway? You don't think this will be more debilitating to industry than a minimum wage?

Yes, absolutely. A minimum wage is not a perfect solution, but it is by far the lesser of two evils when the other evil is a full-fledged welfare state.

 

[arildno]

Yes, absolutely. A minimum wage is not a perfect solution, but it is by far the lesser of two evils when the other evil is a full-fledged welfare state.

Yeah, it is horrifying to live in a society with minimal crime rates, social security and, in general, a lack of awe towards superiors.

 

[Jimmy Snyder]

No, only the owners of those buildings (pay municipal taxes).

Where do they get the money with which to pay those taxes?

 

[BobG]

Where do they get the money with which to pay those taxes?

The answer is in post #33.

You get taxed on one end or the other - either straight out in higher taxes for services or in higher prices for goods. And if you're taxed via higher prices, then raising minimum wages doesn't benefit minimum wage workers nearly as much as it might seem.

The minimum wage jobs probably aren't going anywhere since they're generally service jobs. The number of them depend on the amount of the money in the city overall, not bring more money into the city. There's a negative affect in that you're pushing more students out of entry level jobs and reducing the motivation for unskilled labor to upgrade their skills to something that actually brings money into the city, but I don't think there would be much net effect overall.

 

[turbo]

Where do they get the money with which to pay those taxes?

They get the money from the rents, but like I explained above, a tenement or trailer park housing families with 20 children can add about $100,000 to the cost of running the school system (paid for by property taxes in our state) while generating tax revenues of less than $1500. Every tenement, every low-rent trailer park, etc is a drain on the resources of the community. Poverty increases costs on all taxpayers, but the costs fall disproportionately on homeowners in Maine, while the benefits accrue mainly to slumlords and businesses that offer part-time, minimum wage jobs with no benefits. The public has to pay for the lack of benefits through aid programs.

 

[turbo]

The answer is in post #33.

You get taxed on one end or the other - either straight out in higher taxes for services or in higher prices for goods. And if you're taxed via higher prices, then raising minimum wages doesn't benefit minimum wage workers nearly as much as it might seem.

Well, let's use a simplified example and pretend that the minimum wage is going to go from $5/hr to $7/hr. If Wal-Mart has to raise prices a couple of percent to cover that, the increase in prices won't hurt the minimum-wage earner because he or she has just gotten a 40% raise. I doubt that it would hurt Wal-Mart and the other low-price big-box stores because the minimum-wage earners will probably shop there to get the lowest prices, and they tend to spend nearly everything that they make.

The minimum wage jobs probably aren't going anywhere since they're generally service jobs. The number of them depend on the amount of the money in the city overall, not bring more money into the city. There's a negative affect in that you're pushing more students out of entry level jobs and reducing the motivation for unskilled labor to upgrade their skills to something that actually brings money into the city, but I don't think there would be much net effect overall.

Good points, but in this particular situation, the businesses in our old home town drew customers from a very large, rural area. People would drive in from 40-50 miles away to get cheaper food at the supermarket and cheaper clothes, etc at Wal-Mart. People also moved into the town from these rural areas (in which farming and forestry jobs are declining) to take the low-paying service jobs, since they're better than nothing. The number of service jobs in our old town grew rapidly because of the chain fast-food restaurants and other franchises that followed Wal-Mart to town to take advantage of the regional traffic that it drew. There is no way the population of that town (approx. 6500 people) could support a MacDonald's, a Wendy's, a Taco Bell, KFC, Burger King, Pizza Hut, Subway, two Dunkin' Donuts stores and a Tim Horton's, in addition to the half-dozen or so locally-owned sub-and-pizza shops. The net effect was that the town grew top-heavy with low-income families living on service-job wages. The tax-payers, having paid for a new high school not long ago, found themselves paying for a new elementary school and a new middle school within less than 5 years. In this case, the service jobs did not follow the money in the town, the town is actually in decline as the jobs arrived. When pawn shops, rent-to-own stores (2), and Dollar stores start popping up in your town, you've got an economic demographic that is a liability, not an asset.

 

[Severian]

A low minimum wage is a gift to businesses and tax on all the rest of us, in the form of the supplemental goods and services that our local governments hand out to working people who can't make ends meet.

So your argument for a minimal wage is that if they have higher wages, the government will be able to tax them more, thus reducing your tax burden? Do you have any idea how illogical that is? The money that Walmart (or whomever) pays them will be removed from Walmart's profits, so will not be taxed at the higher rate of the shareholders or via corporation taxes. So your minimum wage will actually reduce tax revenues and increase your tax burden.

But that is not the point I was making. It is your (and my) moral responsibility to provide a decent standard of living for those who cannot afford it, even if they cannot afford it simply because they choose not to work.

I even gave you a get out clause for your lack of social responsibility: "Of course, some people may object to giving poor people money for 'nothing', so an alternative mechanism is to call the welfare a 'wage' and insist that the people who receive it do a few hours of community service a week. That may even refoster a new community spirit."

 

[turbo]

You have either neglected to read my posts or you have misunderstood the concepts therein. If you want to provide a decent standard of living for those who will not work, go ahead and do it. Your "solution" would be horrendously expensive and destructive to our country. If you think that our government has a bottomless pit of funds to support all its citizens regardless of their willingness to work, you are sadly misinformed.

You may want to provide cogent arguments instead of unfounded claims.

 

[russ_watters]

Yeah, it is horrifying to live in a society with minimal crime rates, social security and, in general, a lack of awe towards superiors.

Superiors? What's that? I live in a capitalistic democracy where there is no such thing.

Social welfare can work in very specific instances, such as in your country, where a small population and abundant resources allow for wealth despite the pitfalls of such a system. It also requires at least a little bit of capitalism to keep the economy from dropping into a tail-spin. But when total social welfare is applied to a country that can't support itself with its resources, it generally ends badly. The USSR is the typical test-case. But France is well on its way.

France's generous jobless benefits, about three times those of the US and Britain, help explain its 10.1 per cent unemployment rate — double the rates in those countries. The benefits are among a set of labour policies that may pose the biggest obstacle to President Jacques Chirac's efforts to rekindle the economy and restore his tattered popularity.

And the broader implications of the general European social welfare trend:

The European Central Bank in Frankfurt predicts the region's expansion will slow to about 1.4 per cent this year[2005], from 2 per cent in 2004. If it does, Europe's growth will lag that of the US for the 13th year in 14.

http://www.theage.com.au/news/busin...obless-benefits/2005/08/30/1125302569771.html

 

[Math Is Hard]

But that is not the point I was making. It is your (and my) moral responsibility to provide a decent standard of living for those who cannot afford it, even if they cannot afford it simply because they choose not to work.

err..huh? Sorry, but I don't follow. I should feel a "moral responsibility" to support those who choose not to work? What is the line of reasoning here?

 

[arildno]

Superiors? What's that? I live in a capitalistic democracy where there is no such thing.

So you don't have a boss, then?

 

[russ_watters]

What does my boss have to do with anything? He may be my superior in my job, but he is not my superior in society.

I used to play sports and had coaches, but that is also not relevant here.

 

[Anttech]

What does my boss have to do with anything? He may be my superior in my job, but he is not my superior in society.

In a "corporatised" world, he is also your boss in society. Other people will look to him as your superior, whether you accept him as such is another thing entirely.

 

[Schrodinger's Dog]

Yeah, it is horrifying to live in a society with minimal crime rates, social security and, in general, a lack of awe towards superiors.

Things that keep your happier and healthier and decrease the gap between rich and poor are communism after all, I too suffer the same horror

 

[arildno]

What does my boss have to do with anything?

He may, without any reasonable justification, fire you, and therefore put you in a financial situation you had not counted upon should occur.

 

[russ_watters]

In a "corporatised" world, he is also your boss in society. Other people will look to him as your superior, whether you accept him as such is another thing entirely.

Really? Where can I see this in action? In my society, people meeting us on the street would probably think I was his boss, based on how we dress!

 

[russ_watters]

He may, without any reasonable justification, fire you, and therefore put you in a financial situation you had not counted upon should occur.

You give him waaaay to much power and me and the system I live under waaaay to little. The US isn't France, where the 10% unemployment is combined with virtually zero turnover, causing people who become unemployed to be unemployed forever. Based on the political rumblings there lately, high turnover must sound like a terrifying thing, but in the US what it means is that people don't typically stay unemployed for very long.

Also, in a society where labar laws are non-putative, employment is a mutual agreement between employer and employee. In the article I linked, it discusses the heavy burden on employers to hold on to dead weight, and that knife cuts both ways: employees of such companies are essentially worthless (or worse, employees can have a negative value - you essentially get punished for hiring people!) and the cost of the labor is fixed by the government. In a free society, supply and demand makes the value of the employee and the value the employer gets match.

In short - I'm not worried about being fired because even if I am, it isn't that big of a deal. Your points, however do apply in a social welfare society...

 

[Anttech]

Really? Where can I see this in action? In my society, people meeting us on the street would probably think I was his boss, based on how we dress!

Funny that's not what the people told me, but hey...

 

[arildno]

In short - I'm not worried about being fired because even if I am, it isn't that big of a deal. Your points, however do apply in a social welfare society...

Not really, since an employee's incompetence, or the general financial troubles of a firm are perfectly reasonable grounds for firing individuals in Norway, and considered such. I don't know about France, though, you might be right.

 

[russ_watters]

Not really, since an employee's incompetence, or the general financial troubles of a firm are perfectly reasonable grounds for firing individuals in Norway, and considered such. I don't know about France, though, you might be right.

That's fine, but you are missing the other half of the equation: once you get fired in a society with low job turnover, it is extremely difficult to get another job. That is why people fear being fired.

 

[kmarinas86]

A person like me does not have as much a demand for minimum wage (immediately) since my parents earn $40/hr and pay most of my tuition. I am OK with my job such that if they lower it $3/hr, it will take a while to sink in. Heck, with the stupid union dues, it takes my $5.50 wage down to below that (w/ $7/week union dues). The union dues sinks my wage below minimum wage if I work less than 28 hours that week. I hated unions in high school and don't know why I end up joining them a year later. But I still work at my job because my spending patterns aren't that much (no rent or utilities).

It's best to raise wages indirectly. If rich people put greater fractions of their wealth into the poor regions of the economy (whether it is the global economy or state economy), those poorer regions will be able to develop their economy.

Economy\ (in\ real\ units)=Skills*Working\ Hours

But do not confuse economy with standard of health or education. It is likely that country with highest quality education or health will not be the wealthiest nation. People respond to incentives. For some people the money is the incentive, for other people its the quality of life, for other people its the education. And for people like me, none of the above serve as an incentive (in of itself). Your economy, health, and education is a product of your culture. Do you want it differently?

What is so great about the United States' federal system (and similar federal systems) is the ability to test different parameters in the economy and see how the play out. In the more well-off parts of Houston we have more house for our money than in California, but that is obviously due to large differences in other factors. In the end, the system is democractic. If you really desire to live in a place where the minimum wage is going to be $8/hr, try California. If you're like me, and don't care if you're being paid at federal minimum wage, try a state like Texas (or any other state which provides that). Of course, there are other factors too, such as where your buds are located .

The world would be duller if everything was the same. There would also be fewer incentives. This also means that different places have different ranges of incentives themselves. But it does not have to go too far such as of the likes of the North Korean "economy" :.

 

[arildno]

That's fine, but you are missing the other half of the equation: once you get fired in a society with low job turnover, it is extremely difficult to get another job. That is why people fear being fired.

Not really. It is fairly easy to get a job in Norway, even in times of financial distress.
Those who are out of job over a longer period of time usually have a medical condition that on some level reduce their ability to perform a satisfactory workload for an employer.

 

[Anttech]

Norway is known for ease of employment. Basically the only people who are unemployed there, want to be unemployed. In France the same can be said, the structure of France and Belgium (Where I currently reside) arent so different, I am a sub-contractor, or consultant, whatever you want to call it. I have no fear of finding jobs, there are loads here, and equally there are loads in France. You seem to be speaking from a position of Zero experience with the job markets here, except perhaps what you read.

http://offres.monster.fr/jobsearch.asp?re=5&pg=1&vw=b&cy=fr&sort=rv

This is monster.fr I'll admit its mostly IT jobs, but there are 2 pages worth of opportunities for 1 day, and its a Monday which typically is not the hottest day to find new jobs.

So what are you basing your ideals on Russ? Some case study by a capitalist?