How many people actually earn the minimum wage?

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In summary, the speaker identifies as a libertarian and often gets into disagreements with others due to their minority viewpoint. The main point of contention is government intervention in economic policies, with arguments being made about the power dynamics between employees and employers. The speaker often questions the validity of these arguments, citing statistics that show a small percentage of workers actually make minimum wage and many of them work in the service industry where tips are also factored in. The speaker also shares an article by an academic economist that highlights the misconceptions about the proportion of workers earning minimum wage.
  • #36
Russell Roberts said:
In just two days, and with virtually no advertising or even any signs, a staggering 7,500 people filled out applications for one of the 350 to 400 available jobs.
Will RR come back to us with the number of people that lose their jobs at the smaller stores that will inevitably have to close down?
 
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  • #37
Gokul43201 said:
Will RR come back to us with the number of people that lose their jobs at the smaller stores that will inevitably have to close down?
That is the sad truth. Wal-Mart typically horns into little Maine towns offering a promise of lots of new jobs, and demanding tax-incremented financing, which the towns often grant in order to get short-term boosts in construction employment, etc. Wal Mart pays little or nothing in local taxes for years, while forcing little local retailers out of business, thereby reducing the tax-base of the town, and increasing the tax-load on residents with homes. They also pull in unemployed or underemployed people from outlying towns, many of them young families or single-parent families with kids, and those kids have to be educated, straining the school system. These people find apartments or trailers to rent, and contribute nothing to the local tax base, while consuming services and increasing taxes on homeowners. Wal Mart is bad news. My wife and I left Skowhegan because of the civic deterioration and skyrocketing property taxes resulting from "development" such as this.
 
  • #38
Gokul43201 said:
Unless you properly cite these stats, you are simply resorting to an appeal to authority. If you can't cite the stats, don't say the words!

Here are his sources:

Bureau of Labor Statistics unemployment data confirms the economic prediction about minimum wage effects. Currently, the teen unemployment rate is 16 percent for whites and 32 percent for blacks. In 1948, the unemployment rate for black teens (16-17) was lower (9.4 percent) than white teens (10.2 percent). Plus, black teens were more active in the labor force.

How might we explain that? How about arguing that there was less racial discrimination in 1948, or back then black teens were more highly educated than white teens? Of course, such arguments would be nonsense. The fact of the matter is that while there was a minimum wage of 40 cents an hour prior to 1948, it had been essentially repealed by the post-World War II inflation; however, with successive increases in the minimum wage, black teen unemployment rose relative to white teens to where it has become permanently double that of white teens.

If the minimum wage law has these effects, then how does it pass political muster?
http://www.gmu.edu/departments/economics/wew/articles/05/wage.html

The unemployment rate for young whites (9.2%) continues to be about half that of young blacks (20.5%) in the summer of 2007. http://www.bls.gov/news.release/youth.t02.htm
The 1948 rates might have come from this website: http://www.ncpa.org/ba/ba292.html
 
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  • #39
Have you guys ever worked for a small retail store? I have. The Wal Mart job would look good to me.

Why do you think that smaller retailers pay their employees better and offer better benefits? Do you have any statistics to cite or are you resorting to an appeal to authority?
 
  • #40
What about Best Buy, Home Depot, Lowes? Large shopping malls?

Out where I live was an area without shops, the area had gone from empty cow pastures to thousand of homes. I had to drive almost 20 miles to get most of the things I needed, 8 miles to the nearest grocery.

The residents of the area fought Walmart for 2 years saying that the store would cause serious traffic jams. Walmart finally won, no traffic jams, almost no traffic really because it's just the local residents that would go down that street to go anywhere anyway. People now only have to drive two miles to get everything they need. It provided hundreds of jobs that other wise didn't exist. No stores shut down due to them opening. It's actually driven business to nearby places like a little tailor shop and shoe repair that no one even knew existed until the Walmart set up across the street Walmart sells basic groceries, the other grocery stores are upscale. I save between .50 to $1.00 on every item I buy there, but to get more variety or certain items I have to go to the other grocery stores.

So there are good and bad stories.
 
  • #41
I have not personally worked in small-business retail, but if I patronize local hardware, office-supply, and building-supply stores, I find myself dealing with knowledgeable employees that I have known and dealt with for 15-20 years or so. My best friend works in a little local office-supply store and he and his wife (my cousin, who is a clerical worker in a medical practice) raised two lovely young women, helped put one of them through college, and recently built a very nice retirement home for themselves. Can you imagine people working on Wal Mart wages staying with these businesses for decades, raising families, building homes, etc?
 
  • #42
jimmysnyder said:
A starving man will clutch at any straw. I wonder if this article informs us how good Wal-Mart is, or how bad off the locals are.

How's this relevant? In both cases, the Wal-Mart job is making people better off. In both cases, Wal-Mart is their current best opportunity.

Evo said:
This is not in the link you posted. This is nonsense, please post the link to this.

The article was actually positive on Walmart, there are a lot of people that need these jobs.

He was being sarcastic.
http://cafehayek.typepad.com/hayek/2008/01/evil-wal-mart.html

Gokul43201 said:
Unless you properly cite these stats, you are simply resorting to an appeal to authority. If you can't cite the stats, don't say the words!

People say things all the time without having citations. It's not like we're writing and academic journal article here, we're just having a discussion.

By the way though, he states these things in his books "The State Against Blacks" and "South Africa's War Against Capitalism." He has also made these points in various of his columns which are available at numerous places, such as here: http://www.gmu.edu/departments/economics/wew/articles.html and here: http://www.jewishworldreview.com/cols/williams1.asp

turbo-1 said:
Can you imagine people working on Wal Mart wages staying with these businesses for decades, raising families, building homes, etc?

Maybe this is a good thing. If people don't stay with Wal-Mart for that long, maybe they're moving onto bigger and better things. Not to mention, Wal-Mart generally promotes from within, so many people might work there for many years, but not in the same position (and therefore, not at the same pay).
 
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  • #43
turbo-1 said:
I have not personally worked in small-business retail, but if I patronize local hardware, office-supply, and building-supply stores, I find myself dealing with knowledgeable employees that I have known and dealt with for 15-20 years or so. My best friend works in a little local office-supply store and he and his wife (my cousin, who is a clerical worker in a medical practice) raised two lovely young women, helped put one of them through college, and recently built a very nice retirement home for themselves. Can you imagine people working on Wal Mart wages staying with these businesses for decades, raising families, building homes, etc?
The Walmart here has a small hardware department, of course Lowe's and Home Depot are also in the same area, but there is a nearby family owned hardware store that I and apparently a lot of other people go to because if I need to do serious work, I know that they will not only tell me which products I need and explain the differences and options, they'll also tell me how to get the job done correctly. At Home Depot, I'm lucky if I can find someone to tell me which isle the duct tape is on.
 
  • #44
chemisttree said:
Why do you think that smaller retailers pay their employees better and offer better benefits?
Who said they thought this?
 
  • #45
Economist said:
People say things all the time without having citations.
Not when you make specific references to data that is not common knowledge.

I refer you to the posting guidelines for this forum: https://www.physicsforums.com/showthread.php?t=113181

2) Citations of sources for any factual claims (primary sources should be used whenever possible).

Economist said:
It's not like we're writing and academic journal article here, we're just having a discussion.
But it's impossible to have a meaningful discussion this way. First you paraphrase Walter Williams, and then you ask: "How exactly does what you're saying explain this?"

How exactly is someone supposed to answer that question without being able to look at the data?
 
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  • #46
chemisttree said:
Have you guys ever worked for a small retail store? I have. The Wal Mart job would look good to me.

Why do you think that smaller retailers pay their employees better and offer better benefits? Do you have any statistics to cite or are you resorting to an appeal to authority?

For whatever it's worth, I read in George Borjas's book titled "Labor Economics" that corporations actually pay their employees about 10% as people who have similar jobs and characteristics yet do not work for corporations.

Gokul43201 said:
Not when you make specific references to data that is not common knowledge.

Well, I forgot exactly which Walter Williams book I read it in at first. Not to mention I was in a rush.

Gokul43201 said:
But it's impossible to have a meaningful discussion this way. First you paraphrase Walter Williams, and then you ask: "How exactly does what you're saying explain this?"

Gokul43201 said:
How exactly is someone supposed to answer that question without being able to look at the data?

Oh come on. I think you're being a little dramatic. You and I both know that me citing the book will make no difference. It's not like anyone will actually read the book because I cite it. Furthermore, it's not like I will overturn anyones beliefs on the subject because I cite the book.

In all fairness, I usually do provide citations and links.

Ok, now that I offered you the citations, will you answer my question: How exactly do you explain those facts?
 
  • #47
Economist said:
How's this relevant? In both cases, the Wal-Mart job is making people better off. In both cases, Wal-Mart is their current best opportunity.
How is that relevant? People jumped off the WTC building because it was their current best opportunity. The article fails to provide any reason to believe that having a Wal-Mart in town is a good thing except that a lot of people applied for a small number of jobs. How many already had jobs and were looking to improve their position?
 
  • #48
Evo said:
...there is a nearby family owned hardware store that I and apparently a lot of other people go to because if I need to do serious work, I know that they will not only tell me which products I need and explain the differences and options, they'll also tell me how to get the job done correctly. At Home Depot, I'm lucky if I can find someone to tell me which isle the duct tape is on.
That's the case at Wal Mart, Home Depot, etc. Most of the employees lack product knowledge, and are not prepared to offer any help with application info. The small local hardware stores retain skilled help with good knowledge of their product lines, and can help with advice for proper application. Also, at Wal Mart, when they're out of something, you get a blank look from the "sales associate". When the mom-and-pop hardware store is out of something, the salesperson takes my phone number, special-orders the item, and calls me when it comes in. The little stores can compete with Wal Mart, not by going toe-to-toe on prices, but by offering real customer service.
 
  • #49
jimmysnyder said:
How is that relevant? People jumped off the WTC building because it was their current best opportunity. The article fails to provide any reason to believe that having a Wal-Mart in town is a good thing except that a lot of people applied for a small number of jobs. How many already had jobs and were looking to improve their position?

His point was that a lot of people want the Wal-Mart job. He was not trying to convince anyone that Wal-Mart is good for a town. I'm sure that debate has been handled at many other places (in fact, he's probably discussed it on cafehayek in the past).
 
  • #50
Economist said:
His point was that a lot of people want the Wal-Mart job. He was not trying to convince anyone that Wal-Mart is good for a town. I'm sure that debate has been handled at many other places (in fact, he's probably discussed it on cafehayek in the past).
CAFEHAYEK said:
A lot of people think that when Wal-Mart comes to town, wages fall along with the quality of life. Wal-Mart jobs are low-paying which drains money from the community. Wal-Mart jobs don't have enough benefits along with the low wages. Wal-Mart jobs exploit workers because Wal-Mart workers aren't unionized.

Here are 7,500 arguments on the other side:
As I indicated in my first reaction to this quote. His 7,500 arguments are flawed. How many of those 7,500 already had jobs and were looking for better ones. Without that piece of information, the article fails to make its own point.
 
  • #51
jimmysnyder said:
As I indicated in my first reaction to this quote. His 7,500 arguments are flawed. How many of those 7,500 already had jobs and were looking for better ones. Without that piece of information, the article fails to make its own point.

I think this is a matter of opinion. I would argue that it really doesn't make a difference. Either way, people see Wal-Mart as their best option. Not to mention, if they really treat employees so bad (as many people claim) then why do 7,500 people apply for 300 - 400 positions?

Furthermore, it seems to me that he was mainly trying to claim that they don't exploit workers. I think those numbers prove that.

So once again, can you explain to me why are you so caught up on whether they already had a job? Do you deny that this is their best option and that this job will make them better off?
 
  • #52
Economist said:
Do you deny that this is their best option and that this job will make them better off?
Do you claim it?
 
  • #53
jimmysnyder said:
Do you claim it?

?

I think the applicants are claiming it.
 
  • #54
jimmysnyder said:
Do you claim it?

Yes I do. Ever heard of revealed preference?
 
  • #55
Economist said:
Yes I do. Ever heard of revealed preference?
No, but I addressed it anyway in post #47. I am not for or against Wal-Mart, but you have left me with the feeling that you form your opinion based on that article. In my opinion it is deficient for the purpose to which it is being put. You ought to post a better one. Millions of people smoke tobacco. I can't see that as an argument that tobacco is good.
 
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  • #56
jimmysnyder said:
... Millions of people smoke tobacco. I can't see that as an argument that tobacco is good.
A good analogy for both views. Agreed, one can't use the 'millions' to say tobacco is good, but on the other hand the 'millions' should give pause to those who smugly want to ban it everywhere (city streets in a Ca town) out of a smug conviction by the 'enlightened' that's it is ok to decide for the other millions. Same goes for Walmart.
 
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  • #57
Economist said:
I think this is a matter of opinion. I would argue that it really doesn't make a difference. Either way, people see Wal-Mart as their best option. Not to mention, if they really treat employees so bad (as many people claim) then why do 7,500 people apply for 300 - 400 positions?

Furthermore, it seems to me that he was mainly trying to claim that they don't exploit workers. I think those numbers prove that.

So once again, can you explain to me why are you so caught up on whether they already had a job? Do you deny that this is their best option and that this job will make them better off?

In other words, did Walmart add 300-400 jobs or did they trade which 300-400 people were without jobs? And if they did trade which 300-400 people were without jobs, were the Walmart jobs at least better than the 300-400 jobs that were lost?

As is, the article doesn't really give a good picture of whether Walmart brought more good jobs to town or whether the town just has a horribly depressed economy. And I agree bringing any kind of jobs is a good thing if it's really adding new jobs.
 
  • #58
BobG said:
As is, the article doesn't really give a good picture of whether Walmart brought more good jobs to town or whether the town just has a horribly depressed economy. And I agree bringing any kind of jobs is a good thing if it's really adding new jobs.
This is a really good point, Bob. Wal Mart didn't bring any net gain of jobs in my old home-town, as far as I could tell, because they killed a lot of little businesses in the process, some of them several towns away. You can argue that new jobs were created, but when Wal Mart kills small businesses, there may be a net loss of jobs. This is hard to gauge because little businesses with a few employees don't make much of a splash when they fold. There is a little tire business in our old home town that has managed to hold on. They special-order tires with a 1-2 day turn-around and they offer free tire rotation and low-cost conversions from summer to winter tires to customers who bought the tires from them. Wal Mart does not do this.

Wal Mart offers some pretty competitive prices at their pharmacy because they know that they can stall people while their prescriptions are being filled, and in the meantime, they will wander around and buy stuff that they don't need. Luckily, in our old home-town, the pharmacy in the downtown offers special services like delivery, and they can beat Wal Mart and Rite-Aid with their service. Other, more traditional pharmacies in outlying towns don't fare so well.

I realize that this thread is about the minimum wage, but it is important to show that small businesses can offer much more competitive wages and still beat Wal Mart and other chains by giving their customers value and establishing long-term relationships. When I was planning a canoe trip to the back-country or northern Maine with my buddy (former chief of the Maine warden service), he recommended that I bring 2 spare tires. I stopped in at this little tire shop and told the proprietor that I'd like to set up a 2nd spare, and he grabbed a used 15" rim and a really good used all-terrain tire, mounted and balanced it and asked me for 10 bucks. That couldn't happen at Wal Mart, VIP, or any of the other chains that do auto-service.

BTW, the guy who operated that tire store back then is retired due a medical disability. He needed some money, so he brought me a wonderful antique Winchester Low-Wall rifle to inspect. I researched the gun, found comparable sales values, and gave him an estimate of value and recommended some outlets to sell it for the best return. All for free, because I appreciate the consideration that he showed to his customers, even before Wal Mart was trying to drive him out.
 
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  • #59
mheslep said:
A good analogy for both views. Agreed, one can't use the 'millions' to say tobacco is good, but on the other hand the 'millions' should give pause to those who smugly want to ban it everywhere (city streets in a Ca town) out of a smug conviction by the 'enlightened' that's it is ok to decide for the other millions. Same goes for Walmart.
I wouldn't ban Wal-Mart. But neither would I advance the argument that a thing which has any positive aspect no matter how inconsequential is good, regardless of any further investigation. The article claims 7500 arguments in favor of Wal-Mart, but that argument is flawed. Are there better employers who might bring better jobs than these? How many would sign up if an employer came to town with jobs good enough to entice those who already have a steady gig? Or did most of the applicants already have jobs? In my opinion, the article is worthless for reasoned judgment.
 
  • #60
jimmysnyder said:
I wouldn't ban Wal-Mart.
Yes, understood, but its clear that there are many who would.
But neither would I advance the argument that a thing which has any positive aspect no matter how inconsequential is good, regardless of any further investigation.
Agreed.
The article claims 7500 arguments in favor of Wal-Mart, but that argument is flawed. Are there better employers who might bring better jobs than these? How many would sign up if an employer came to town with jobs good enough to entice those who already have a steady gig? Or did most of the applicants already have jobs? In my opinion, the article is worthless for reasoned judgment.
Good points, the 7500 is not a basis by itself to weigh the benefits for a given community. Heck I'd probably vote for you for city mayor and support a decision by you to hinder Walmart given your demonstrated desire to get to the facts. However, there's a lot a populism that says in effect "Walmart is absolute an bad", wrecks the local buis., the jobs are worthless and only an idiot would want to work there. The 7500 is enough evidence to counter that line.
 
  • #61
jimmysnyder said:
No, but I addressed it anyway in post #47. I am not for or against Wal-Mart, but you have left me with the feeling that you form your opinion based on that article. In my opinion it is deficient for the purpose to which it is being put. You ought to post a better one.

I don't think that "proves" Wal-Mart is "good." However, I honestly do think that Wal-Mart is a "good" company that's done more for poor people than any current politician has done or will do. But that's an not opinion that's based on this article. By the way, I don't wish to make this post mainly about Wal-Mart either.

jimmysnyder said:
Millions of people smoke tobacco. I can't see that as an argument that tobacco is good.

Tobacco is not "good," but that doesn't mean that smokers' don't get some sort of benefit from it. In other words, just because it's bad doesn't mean it's irrational. For example, alcohol is not good for me, but I enjoy drinking it and do so several times a week (and I imagine I am not alone). Likewise, I don't smoke marijuana but I imagine many people (probably even on this board) do. Marijuana is not good for you, but that doesn't mean that people who smoke it are irrational, because there is some personal enjoyment or satisfaction derived from using this substance. My point is, people do many unhealthy and dangerous things, probably because they derive some enjoyment from them, and they're willing to "pay the price" for that enjoyment.
 
  • #62
BobG said:
In other words, did Walmart add 300-400 jobs or did they trade which 300-400 people were without jobs? And if they did trade which 300-400 people were without jobs, were the Walmart jobs at least better than the 300-400 jobs that were lost?

As is, the article doesn't really give a good picture of whether Walmart brought more good jobs to town or whether the town just has a horribly depressed economy. And I agree bringing any kind of jobs is a good thing if it's really adding new jobs.

The main argument for Wal-Mart being "good" is not about jobs. The main argument is that they are able to provide goods cheaply, which improves their shoppers standard of living (because they get "more bang for their buck").

I don't really have time to say anything more because I got to go, but I'll be back on later to discuss it.
 
  • #63
Wal-Mart is an abomination-myriad studies demonstrate the same phenomenon--an increase in unempolyment rate, coupled with a loss of mom/pop biz-neses. Prices may drop for one particular shopper, but the community is left bereft. References to such abound, and WM likely spends more in PR and defense money to lawers than its next three or four competitors combined. Under threat of violence I will shop there, but just barelt
 
  • #64
mheslep said:
Heck I'd probably vote for you for city mayor and support a decision by you to hinder Walmart given your demonstrated desire to get to the facts.
I hereby rescind all that I wrote. If nominated I will not run, if elected I will not serve.
 
  • #65
Wal-Mart is an abomination-myriad studies demonstrate the same phenomenon--an increase in unempolyment rate, coupled with a loss of mom/pop biz-neses. Prices may drop for one particular shopper, but the community is left bereft. References to such abound, and WM likely spends more in PR and defense money to lawyers than its next three or four competitors combined. Under threat of violence I will shop there, but just barely.
 
  • #66
jimmysnyder said:
I hereby rescind all that I wrote. If nominated I will not run, if elected I will not serve.
:smile: Ok Tecumseh, but that's a loss for the country.
 

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