Re: Help with a Minimum Wage Model

From: Dehede011@aol.com
Date: Sun Apr 06 2003 - 16:20:02 MDT

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    In a message dated 4/6/2003 4:51:11 PM Central Standard Time,
    charleshixsn@earthlink.net writes: You might want to think about that, when
    you are recommending that the minimum wage be lowered or removed.
    Effectively, it already has been. People can't avoid paying taxes, so they
    would actually end up in the hole for paying their rent at the end of a
    month, even with no other expenses at all. (e.g., food, clothes, medicine.)

    Charles,
           There is an old joke that goes, "I was born in the night, but it
    wasn't last night." Well, you and I have disagreed in the past many times
    but it wasn't this time." <G>
           I am not advocating trying to take a raise that was received in the
    past away from people. I am saying that proposals to wage the minimum wage
    in my experience in manufacturing are so cynical as to be unconscionable.
           Here is what I see happening:
    1. The new wage is passed, the politician gets good press for his
    humanitarian impulses. Anyone against the increase gets castigated in the
    press. Actually this phase is totally a win-win from a strictly political
    point of view. The one side gets kudos for being humanitarian, the other
    side gets kudos from its supporters for standing up for the right.
    2. The business owners tells their supervisors, etc., to cut out enough
    labor to pay for the raise. They do so and as these things are done by
    seniority the ones that lose their jobs are the ones at the bottom that were
    supposed to get the raises -- they don't, they get unemployed.
    3. The unions that supported the increase in the minimum wages wait until
    the next bargaining round and point to the new minimum wage as justification
    for an increase. After all skilled labor has to maintain its differential
    with the minimum wage and unskilled labor. They like the increase because
    they win also.
    4. Finally an up tick in the business cycle comes along so a few people are
    hired at the new minimum wage. However in my mind it is questionable that
    they win either. My best guess is that the new labor is more highly
    qualified than the labor that was released because of the earlier raise.
    Ron h.

           



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