Should the US raise the federal minimum wage?

[Ideologue]

As I understand it, Germany has a patchwork quilt of wage floors based on union negotiations in many different industries.  Their labor system is so different that it's an apples and oranges comparison.

SC and other low-minwage states tend to have lower wages generally than high-minwage states, no?

[Admiral Yi]

NY follows the federal.

[Ideologue]

No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

[Admiral Yi]

No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

OK.  Still refutes your argument that wages are set in relation to the minimum wage.

[Ideologue]

I don't dispute that multiple factors are at play.  In NYC, like other urban hellholes, geography is so dominant that nominal wages would have to be higher.  I think what we'd have to look at are semi-urbanized states that have minwage differences.  It also doesn't prove that the fed minwage doesn't prop up wages, though I concede that to prove that it does we'd need an alternate U.S. where wages stagnated/fell even more between 1978 and today.

[DontSayBanana]

No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

OK.  Still refutes your argument that wages are set in relation to the minimum wage.

For the service sector, it very much is.  Retail associates make minimum wage, unless they work at some kind of a boutique shop that can't afford the bad press.  Typically, store-level management is tied to that rate, with most assistant managers I know making wages of either 15, 20, or 30 percent above minimum, with only store managers making a flat salary not directly tied to minimum wage.

[alfred russel]

The minwage sets a wage floor from which normal wages are negotiated.  If it were abolished, almost all of us here would make less. 

I really doubt it. Your wages are set by market forces which combine some aspects of what courts are willing to pay and what it takes to keep you from walking off to another job. I don't think it is a threat that people with law degrees are going to walk out and do minimum wage work--you are in a different employment class.

A higher minimum wage will mean you pay more when you go to subway.

[Zanza]

How does your theory account for countries that have no minimum wage, such as Germany?

Germany figured out that our model doesn't protect the weakest participants in the job market and introduced a general minimum wage of 8.50€ on January 1st. The minister of labor just presented the 100-day report on the new policy. So far few to no jobs were lost. Employment is expected to reach record levels this year and unemployment is the lowest in the EU. The cost increased was compensated by price increases, but as we were close to deflation that doesn't matter either. So I guess we picked the perfect time to introduce a minimum wage.

[Admiral Yi]

It's a brilliant political move to introduce a minimum wage that has no real effect.

The reverse of Timmy's question: for those of you who voted for anything other than abolishing the minimum wage, what was the reasoning that got you to your number?

[Zanza]

It's a brilliant political move to introduce a minimum wage that has no real effect.

It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

[Admiral Yi]

It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

Do you know what these jobs were paying previously?

[Zanza]

It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

Do you know what these jobs were paying previously?

Less than 8.50€.  The poorest paid jobs were apparently stuff like hair cutters, call center employees, cleaners, gardeners, trash removal, some basic jobs in elderly care etc. Hair cutters in some East German regions got less than 5€ an hour.

[Admiral Yi]

Well hopefully that will get Joan off your backs. 

[Zanza]

Well hopefully that will get Joan off your backs. 

Virtually all of the jobs in question would at best matter very indirectly for Germany's international competitiveness or its gigantic current account surplus. It's mainly poorly paid services or retail jobs that can only be rendered locally anyway. So I don't think it addresses Joan's concerns. This won't fix Germany's depressed domestic demand and will thus not make Germans invest more in Germany, so our current account won't be affected. I have no idea what could compel German companies to invest their international profits in Germany again. My company is always talking of moving closer to the customer, i.e. investing in the US or China.

[Admiral Yi]

German humor.