McDonalds: "What, my peon, you don't work two full time jobs?"

[derspiess]

I'd be all for capping maximum wage. Is that an option?

We've ahd something pretty close to that in the past, haven't we?

Didn't the US at one point have a 90% marginal tax rate at the upper end or something like that?

Yep.  Did wonders for productivity.

[DGuller]

I'd be all for capping maximum wage. Is that an option?

We've ahd something pretty close to that in the past, haven't we?

Didn't the US at one point have a 90% marginal tax rate at the upper end or something like that?

Yep.  Did wonders for productivity.

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

[lustindarkness]

Whatever languish decides is the way to fix this, don't mess with the McD fries, thank you.

[merithyn]

I'd be all for capping maximum wage. Is that an option?

The people at the high end don't earn a "wage", or if they do, it's a small part of their compensation ... 

I meant by having a massive tax on income.

[grumbler]

Wow that is what you took away from that?  It looked like McDonalds is abusing the tax payers to get away with paying their workers below market wages, to the point they are actually recommending that to employees.  As in, people would not be working these jobs without the tax payers stepping in to make their wages livable.  It is corporate welfare.  But maybe this is not unexpected or necessarily a bad thing.

I don't think you understand what "market wages" are, if you are arguing that the market causes wages to be "below market wages."

I see that you are actually arguing that welfare, food stamps, and the like distort the job market, but surely this isn't news, and isn't "corporate welfare."

As to your last point our economy is a pretty dismal failure at providing sufficient employment above the McJobs level for all of the average and below average Joes and Janes.  But we KNEW this was going to happen when we did the whole globalization thing.  We knew that a short term consequence of this was going to be high unemployment as things evened out but in the end we would all benefit.  But, sure enough, we have had huge increases in unemployment and wage stagnation, you know, like we thought.  But this is hardly the workers fault, or that they should be 'aspiring for more', it is the predictable result of our policies.  It seems weird to suggest everybody can have a good job when we clearly do not have a demand for labor Stateside.  I was thinking the welfare state would have to see us through this transition time and perhaps this is just what we have to do.

Globalization isn't something a country decides to "do."  It is the outcome of a long historical process of decreasing transportation costs.  One could opt out of the free trade system and perhaps ameliorate the effects of globalization, but that still wouldn't create living-wage jobs in one's country, it would simply increase the cost of everything except labor, and thus depress living standards while increasing employment (hello, USSR!).

[Razgovory]

Ooooh, demonstrate your mastery of law with your next post, then explain how you are the only one who understands physics after that!

[derspiess]

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

[DGuller]

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

That was a rhetorical question.  I never expect you to be either willing or able to fact-check anything you shit out.

[The Brain]

I don't know about America, maybe Socialism is swell there, but in Sweden if you didn't bother to get enough skills to negotiate a wage you can live comfortably on then you're simply a lazy bum.

[garbon]

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

That was a rhetorical question.  I never expect you to be either willing or able to fact-check anything you shit out.

Of course, since there are a million graphs out there that track minimum wage increases vs. productivity, would have taken him two seconds googling even if one had to be skeptical about provenance of some of the charts.

[Razgovory]

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

That was a rhetorical question.  I never expect you to be either willing or able to fact-check anything you shit out.

Of course, since there are a million graphs out there that track minimum wage increases vs. productivity, would have taken him two seconds googling even if one had to be skeptical about provenance of some of the charts.

Yes, but it wouldn't do him any good.

[The Brain]

An important point that has been made already in this thread is that with Socialists it will never ever be enough. No matter how many billions you pour on the failures of society Socialists will always call for more more more! So you may as well give nothing and save your money, cause the whining will be there no matter how much you waste.

[merithyn]

Interesting article from CEPR on the topic.

The Minimum Wage and Economic Growth

Written by Dean Baker and Will Kimball      
Tuesday, 12 February 2013 22:26

In his State of the Union address to Congress President Obama called for a higher minimum wage. The purchasing power of the minimum wage peaked in the late 1960s at $9.22 an hour in 2012 dollars. That is almost two dollars above the current level of $7.25 an hour. Most of the efforts to raise the minimum wage focus on restoring its purchasing power to its late 1960s level, setting a target of around $10 an hour for 2015 or 2016, when inflation will have brought this sum closer to its previous peak in 2012 dollars.

While this increase would lead to a large improvement in living standards for millions of workers who are currently paid at or near the minimum wage, it is worth asking a slightly different question. Suppose the minimum wage had kept in step with productivity growth over the last 44 years. In other words, rather than just keeping purchasing power constant at the 1969 level, suppose that our lowest paid workers shared evenly in the economic growth over the intervening years.

This should not seem like a far-fetched idea. In the years from 1947 to 1969 the minimum wage actually did keep pace with productivity growth. (This is probably also true for the decade from when the federal minimum wage was first established in 1937 to 1947, but we don't have good data on productivity for this period.)

As the graph below shows, the minimum wage generally was increased in step with productivity over these years. This led to 170 percent increase in the real value of the minimum wage over the years from 1948 to 1968. If this pattern of wage increases for those at the bottom was supposed to stifle growth, the economy didn't get the message. Growth averaged 4.0 percent annually from 1947 to 1969 and the unemployment rate for the year 1969 averaged less than 4.0 percent.



This link between productivity and the minimum wage ended with the 1970s. During that decade the minimum wage roughly kept pace with inflation, meaning that its purchasing power changed little over the course of the decade. The real value of the minimum then fell sharply in the 1980s as we went most of the decade without any increase in the nominal value of the wage, allowing it to be eroded by inflation. Since the early 1990s the real value of the minimum wage has roughly stayed constant, which means that it has further fallen behind productivity growth.

How was it decided to break the link between productivity growth and the minimum wage? It is not as though we had a major national debate and it was decided that low-wage workers did not deserve to share in the benefits of economic growth. This was a major policy shift that was put in place with little, if any, public debate.

If the minimum wage had kept pace with productivity growth it would be $16.54 in 2012 dollars. It is important to note that this is a very conservative measure of productivity growth. Rather than taking the conventional data published by the Bureau of Labor Statistics for the non-farm business sector, it uses the broader measure for economy-wide productivity.[1] This lowers average growth by 0.2-0.3 percentage points.

This measure also includes an adjustment for net rather than gross output. It also uses a CPI deflator rather than a GDP deflator, which further lowers the measure of productivity growth.[2] Even with making these adjustments the $16.54 minimum wage would exceed the hourly wage of more than 40 percent of men and more than 50 percent of women . We would have a very different society if all workers were earning a wage above this productivity linked minimum wage.

------------------------------------------------------------------------------------------------------------
[1] If we just used non-farm productivity as the basis for indexing the minimum wage, the most commonly used measure of productivity, the minimum wage would have been $21.75 in 2012 [http://www.cepr.net/index.php/blogs/cepr-blog/new-cepr-issue-brief-shows-minimum-wage-has-room-to-grow].

[2] These adjustments are explained in Baker, 2007. For the years since 2006 we assumed that the difference in the growth rate of non-farm productivity and the growth of this adjusted measure is the same as it was on average for the years 2000-2006.

[garbon]

I'm not sure I agree that minimum wage should increase with increase productivity. I mean isn't part of that because many tasks have been getting easier to do?

[derspiess]

I take it that you just spewed off an ideological talking point, and not checked with statistical resources like BLS?

That was a rhetorical question.  I never expect you to be either willing or able to fact-check anything you shit out.

Of course, since there are a million graphs out there that track minimum wage increases vs. productivity, would have taken him two seconds googling even if one had to be skeptical about provenance of some of the charts.

Which is not even what I was talking about.