Raising The Minumum Wage Helps The Poor

unemployment doesn't go up, inflation goes down too

from JoeUser Forums
The Heritage Foundation likes to tout a study they did that apparantly "proves" that raising the minumum wage somehow increases inflation, raises unemployment and besides, the only people making that wage (or less) are rich suburban kids. They contend that we hurt those folks (who, in the last sentence didn't exist outside of a cushy suburban home) who will somehow be impacted negatavely by having a few more dollars in thier pocket.

It's all nonsense!

If we look at the last 4 increases in the minumum wage, we clearly can see that inflation has gone down after the periods we increased the min. wage. We can also see that inflation had an overall downward trend in the period.

since 1990, there have been 4 increases in the min. wage

in jan of 1990, the inflation rate was around 5% annually.

the 1st 2 increases in the min wage happened on april 1st of 1990 and 91 respectively.

in jan. 1992, after that wave, the inflation rate sunk to around 2.5% (and the conservatives screamed that raising the min wage would increase inflation then too)

the 2nd wave of min wage increases happened on oct 1, 1996 and sept 1, 1997.

in jan of 96, the inflation rate remained under 3%

again, conservatives screamed that an increase in the min. wage would cause more inflation.

in jan of 08, the inflation rate again moved south to a record low 1.5%

also, the consumer price index clearly shows that after increases in the minumum wage, the rate of prices going up went down.

the greediest amongst us will scream and parrot their bogus Heritage Foundation study, but don't believe it.

The facts clearly show that when the minumum wage is increased, unemployment has gone down overall, and that prices and inflation slowed. In other words, everybody wins! Unless you just want to keep poor people poor.




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15,885 views 44 replies
Reply #2 from JoeUser Forums Top

Minimum wage raises help the poor temporarily.  Eventually prices go up because manufacturers are feeling the pinch of having to pay employees a higher minimum wage and we're right back to square one again.

It's not the solution some people seem to think that it is.

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Reply #3 from JoeUser Forums Top
Eventually prices go up because manufacturers are feeling the pinch of having to pay employees a higher minimum wage and we're right back to square one again.

did you look at my sources?

here...from the dept of labor...(the link's above, it's the 1st one)

1990 127.4 128.0 128.7 128.9 129.2 129.9 130.4 131.6 132.7 133.5 133.8 133.8 128.7 132.6 130.7 6.1 5.4
1991 134.6 134.8 135.0 135.2 135.6 136.0 136.2 136.6 137.2 137.4 137.8 137.9 135.2 137.2 136.2 3.1 4.2 1992 138.1 138.6 139.3 139.5 139.7 140.2 140.5 140.9 141.3 141.8 142.0 141.9 139.2 141.4 140.3 2.9 3.0
1993 142.6 143.1 143.6 144.0 144.2 144.4 144.4 144.8 145.1 145.7 145.8 145.8 143.7 145.3 144.5 2.7 3.0
1994 146.2 146.7 147.2 147.4 147.5 148.0 148.4 149.0 149.4 149.5 149.7 149.7 147.2 149.3 148.2 2.7 2.6
1995 150.3 150.9 151.4 151.9 152.2 152.5 152.5 152.9 153.2 153.7 153.6 153.5 151.5 153.2 152.4 2.5 2.8
1996 154.4 154.9 155.7 156.3 156.6 156.7 157.0 157.3 157.8 158.3 158.6 158.6 155.8 157.9 156.9 3.3 3.0
1997 159.1 159.6 160.0 160.2 160.1 160.3 160.5 160.8 161.2 161.6 161.5 161.3 159.9 161.2 160.5 1.7 2.3 1998 161.6 161.9 162.2 162.5 162.8 163.0 163.2 163.4 163.6 164.0 164.0 163.9 162.3 163.7 163.0 1.6 1.6
1999 164.3 164.5 165.0 166.2 166.2 166.2 166.7 167.1 167.9 168.2 168.3 168.3 165.4 167.8 166.6 2.7 2.2
2000 168.8 169.8 171.2 171.3 171.5 172.4 172.8 172.8 173.7 174.0 174.1 174.0 170.8 173.6 172.2 3.4 3.4

2001 175.1 175.8 176.2 176.9 177.7 178.0 177.5 177.5 178.3 177.7 177.4 176.7 176.6 177.5 177.1 1.6 2.8 2002 177.1 177.8 178.8 179.8 179.8 179.9 180.1 180.7 181.0 181.3 181.3 180.9 178.9 180.9 179.9 2.4 1.6
2003 181.7 183.1 184.2 183.8 183.5 183.7 183.9 184.6 185.2 185.0 184.5 184.3 183.3 184.6 184.0 1.9 2.3
2004 185.2 186.2 187.4 188.0 189.1 189.7 189.4 189.5 189.9 190.9 191.0 190.3 187.6 190.2 188.9 3.3 2.7 2005 190.7 191.8 193.3 194.6 194.4 194.5 195.4 196.4 198.8 199.2 197.6 196.8 193.2 197.4 195.3 3.4 3.4

the highlighted colums are the change in percent of prices overall . the first column is from "dec - dec" and the second is the "avg." according to the site.

as you can see, prices did not increase when the minumum wage was increased. there is no coorellation. there are many claims and threats, but no reality.
Reply #4 from JoeUser Forums Top
damn,,,highlighting those colums screwed up the chart layout,,,my apologies,,,,here's the chart again, without the highlight...

1990 127.4 128.0 128.7 128.9 129.2 129.9 130.4 131.6 132.7 133.5 133.8 133.8 128.7 132.6 130.7 6.1 5.4

1991 134.6 134.8 135.0 135.2 135.6 136.0 136.2 136.6 137.2 137.4 137.8 137.9 135.2 137.2 136.2 3.1 4.2
1992 138.1 138.6 139.3 139.5 139.7 140.2 140.5 140.9 141.3 141.8 142.0 141.9 139.2 141.4 140.3 2.9 3.0
1993 142.6 143.1 143.6 144.0 144.2 144.4 144.4 144.8 145.1 145.7 145.8 145.8 143.7 145.3 144.5 2.7 3.0
1994 146.2 146.7 147.2 147.4 147.5 148.0 148.4 149.0 149.4 149.5 149.7 149.7 147.2 149.3 148.2 2.7 2.6
1995 150.3 150.9 151.4 151.9 152.2 152.5 152.5 152.9 153.2 153.7 153.6 153.5 151.5 153.2 152.4 2.5 2.8

1996 154.4 154.9 155.7 156.3 156.6 156.7 157.0 157.3 157.8 158.3 158.6 158.6 155.8 157.9 156.9 3.3 3.0
1997 159.1 159.6 160.0 160.2 160.1 160.3 160.5 160.8 161.2 161.6 161.5 161.3 159.9 161.2 160.5 1.7 2.3
1998 161.6 161.9 162.2 162.5 162.8 163.0 163.2 163.4 163.6 164.0 164.0 163.9 162.3 163.7 163.0 1.6 1.6
1999 164.3 164.5 165.0 166.2 166.2 166.2 166.7 167.1 167.9 168.2 168.3 168.3 165.4 167.8 166.6 2.7 2.2
2000 168.8 169.8 171.2 171.3 171.5 172.4 172.8 172.8 173.7 174.0 174.1 174.0 170.8 173.6 172.2 3.4 3.4

2001 175.1 175.8 176.2 176.9 177.7 178.0 177.5 177.5 178.3 177.7 177.4 176.7 176.6 177.5 177.1 1.6 2.8
2002 177.1 177.8 178.8 179.8 179.8 179.9 180.1 180.7 181.0 181.3 181.3 180.9 178.9 180.9 179.9 2.4 1.6
2003 181.7 183.1 184.2 183.8 183.5 183.7 183.9 184.6 185.2 185.0 184.5 184.3 183.3 184.6 184.0 1.9 2.3
2004 185.2 186.2 187.4 188.0 189.1 189.7 189.4 189.5 189.9 190.9 191.0 190.3 187.6 190.2 188.9 3.3 2.7
2005 190.7 191.8 193.3 194.6 194.4 194.5 195.4 196.4 198.8 199.2 197.6 196.8 193.2 197.4 195.3 3.4 3.4
Reply #5 from JoeUser Forums Top

Lil Whip is right.  You show no cause and effect.  Basically, your arguement is akin to Brad's Reducing Piracy causes global warming.

Having been in the hiring seat for a major retailer, I know for a fact that raising the minimum wage does cause unemployment.  Now if the economy is strong enough, they may get another job.  But we replaced many low skilled employees with automation.  I worked for them from 1978 to 1990 (years you conveniently omit).  Quite frankly, I trust milton Friedman and Walter E. Williams a lot more than pirates causing Global warming hokum. 

O, and Lil Whip is right in who earns the minimum wage.  Will an increase affect white collar america?  Hardly.  Will it affect Teens, especially minority teens?  Where are your stats on that?

Reply #6 from JoeUser Forums Top
Quite frankly, I trust milton Friedman and Walter E. Williams a lot more than pirates causing Global warming hokum.


i haven't said anything about brad and his theory on global warming (and have no idea what it is or what you are talkin bout) so this is just red herring rhetoric....

Lil Whip is right. You show no cause and effect. Basically, your arguement is akin to Brad's Reducing Piracy causes global warming.

no, it's not,,,and the "ridiculous analogies" are silly

what ya'll haven't shown is any cause and effect that raising the minumum wage does the things you say it soes. it's just talking points parroted over and over and this one lil slanted study by the heritage boys.

stop telling me i'm wrong with silly analogies and unsubstiantiated claims.




Reply #8 from JoeUser Forums Top
You neglect to point out that inflation surged to over 7% after the wage hikes in 90 and 91. It didn't recover to 1990's level until 1996, and then we were in the bloom of the tech boom.

If you look at the great depression, you'll find inflation and prices to be fairly low. Obviously, people losing their jobs and not having money causes prices to drop. When money is dumped on consumers unnaturally, then you'll see prices rise to meet their ability to pay.

You take a single decade, wherein you have a recession AND the tech boom. Then you claim the subsequent recovery and the later benefits of the boom are somehow the responsibility of minimum wage hikes. It's damned convenient granted, but it defies the reality of economics.

More money on hand? Higher prices. Imposed higher wages? You lose jobs. Set your head on fire, you won't freeze to death. You're trying to argue that people can fall upwards.
Reply #9 from JoeUser Forums Top
You neglect to point out that inflation surged to over 7% after the wage hikes in 90 and 91. It didn't recover to 1990's level until 1996, and then we were in the bloom of the tech boom.


yeah, but you ignore that after the 96 and 97 hikes, none of that happened. and still, overall, the trend was down. but regardless, the other factors like inflation and prices are on my side as well.

you just keep saying that if weraise the min wage, we will have doom nd gloom...in so many words, but the facts don't show that at all.
Reply #10 from JoeUser Forums Top
just a thought,,,then i gotta do sh*t...

maybe the compromise is this...some contend the combo of raising taxes on the rich and raising the min wage are good. others contend the opposite and stand for not raising the wage (some even want to lower it) and lowering taxes more for the rich.

maybe the combo of raising wages and lowering taxes is the way to go...more money in people's pockets, and more receits could mean more tax revenue.

hmmmmmm...
Reply #11 from JoeUser Forums Top
"yeah, but you ignore that after the 96 and 97 hikes, none of that happened. and still, overall, the trend was down. but regardless, the other factors like inflation and prices are on my side as well."


And you purposely pick this era because you know that in this time we created an entire new industry that created millions of jobs. Handy, huh? You'll note that once the bubble busted you returned to the floundering of the mid-90's.

That's always been my beef with the "Clinton is God" crowd. For the first half of Clinton's tenure there was nothing to brag about. For the second, the prosperity didn't have a damn thing to do with him.
Reply #12 from JoeUser Forums Top
And you purposely pick this era because you know that in this time we created an entire new industry that created millions of jobs. Handy, huh? You'll note that once the bubble busted you returned to the floundering of the mid-90's.


oh please,,,i've explained thoroughly why i picked the stats i did. and like i said before, every era has it's "events" that help shape things. some good, some bad. who's to say our next big industry boom isn't just around the corner and a higher min wage would increase people's ability to buy into it?

you keep throwing out doom and gloom predictions with no history to back it up, then try to nitpick my more complete data. you try to blame everything bad on the poor having a little more while ignoring the clear facts that that didn't happen at the very least on any consistant basis in the past.

this is just gettin silly...

have a great day baker, i'm sure we'll find some common ground down the road...

Reply #13 from JoeUser Forums Top
Wtf? lol, whatever. It's like someone demanding proof of gravity. Mmmkay, enjoy.
Reply #14 from JoeUser Forums Top
no, it's not,,,and the "ridiculous analogies" are silly


So are yours. You pontificate and manufacture relationships. But I have been there, and you have not. That is a fact.

Your analogies are as silly and perhaps more so than Brads. There is nothing in it that even remotely approaches cause and effect as you take out all that is not germaine to your point. And that makes your point as relevant as Pirates. Sorry, Facts win out over highbrow theory. And bad one at that.
Reply #15 from JoeUser Forums Top

you keep throwing out doom and gloom predictions with no history to back it up, then try to nitpick my more complete data


You're kidding, right? Or are you so deluded that....oh, nevermind. It's not worth my time or energy.

Reply #16 from JoeUser Forums Top
So are yours. You pontificate and manufacture relationships. But I have been there, and you have not. That is a fact.


where did i analogize in ths thread?

Your analogies are as silly and perhaps more so than Brads. There is nothing in it that even remotely approaches cause and effect as you take out all that is not germaine to your point. And that makes your point as relevant as Pirates. Sorry, Facts win out over highbrow theory. And bad one at that.


you have provided exactly zero in the way of facts here....all you have done is try to put me down,,,,good try,,,actually, it wasn't so good, you are usually not so inept and lame.
Reply #18 from JoeUser Forums Top
Lil Whip is right.
--DrG


Oh good God! Doc and LW agreeing on anything is a sure sign that the end is near!


Reply #19 from JoeUser Forums Top
Obviously you have a body of work, beyond the 8 years you site, to prove your theory. Please, if you would, cite the school of thought in economics that proposes that more money in the hands of the consumer actually lowers prices and inflation. What's that theory called so I can look it up?

What economist said that if you raise minimum wage, unemployment goes down? Not even YOUR figures play out. You cite the 1990 and 91 minimum wage hike. Here's the result:

"Unemployment rate 1990-1997, by month.

1990: 5.4, 5.3, 5.2, 5.4, 5.4, 5.2, 5.5, 5.7, 5.9, 5.9, 6.2, 6.3
1991: 6.4, 6.6, 6.8, 6.7, 6.9, 6.9, 6.8, 6.9, 6.9, 7.0, 7.0, 7.3
1992: 7.3, 7.4, 7.4, 7.4, 7.6, 7.8, 7.7, 7.6, 7.6, 7.3, 7.4, 7.4
1993: 7.3, 7.1, 7.0, 7.1, 7.1, 7.0, 6.9, 6.8, 6.7, 6.8, 6.6, 6.5
1994: 6.6, 6.6, 6.5, 6.4, 6.1, 6.1, 6.1, 6.0, 5.9, 5.8, 5.6, 5.5
1995: 5.6, 5.4, 5.4, 5.8, 5.6, 5.6, 5.7, 5.7, 5.6, 5.5, 5.6, 5.6
1996: 5.6, 5.5, 5.5, 5.6, 5.6, 5.3, 5.5, 5.1, 5.2, 5.2, 5.4, 5.4
1997: 5.3, 5.2, 5.2, 5.1, 4.9, 5.0, 4.9, 4.8, 4.9, 4.7, 4.6, 4.7"


No one can look at that and claim that unemployment is going down in 90, 91, 92, OR 93. It doesn't even recover until 95, and it doesn't drop to the levels you are talking about until the dot com boom created millions of jobs.

You need to simply face the fact that you are just carrying on the same, tired, failed socialist propaganda. Keynesian economics doesn't agree with what you are saying, neither does supply-side economics. Please, tell me what school of thought believes that raising wages lowers unemployment and doesn't raise prices...
Reply #20 from JoeUser Forums Top
As much as I like to read all these facts that i don't understand, there is one thing I do understand that no one seems to point out at all. I work 2 jobs. On my day job, full-time, I earn $11 an hour. On my night job, part-time, I earn $10 an hour. I struggle a little to keep up with my bills, granted some I shouldn't even have if I can't afford them, but I can't live without satellite or Internet. Maybe someone here can explain to me how exactly will $7.25 will somehow get me out of poverty? How exactly will $7.25, within 2 years I believe, will somehow make my life better? Let's see, a full time employee with the previous minimum of $5.15 an hour made $206 a week before taxes and a part-time employee (say 25 hours a week) makes $125.75 a week before taxes. Hardly a paycheck to live off of. Now these same people will make $290 a week full-time and $181.25 a week part time before taxes. Again, how will $84 (full-time) and $55.50 (part-time) a week, more, will change anyones lifestyle?

Look I'm all for raising minimum wage. I was there once and it would have been nice to make more money when I was 18 years then $5.25 an hour. But if the Democrats are gonna argue that this is to help the poor, hows about they do a real minimum wage hike? Hows about $10 an hour? I know this would be worse than what $7.25 an hour would do to jobs and other things as LW and Drguy said (I agree with them BTW) but don't try to make it seems as if somehow you actually made a difference in their lives. $2 an hour from a wage as low as $5.15 an hour is hardly something to celebrat as if they have won the lottery or something like it.

Sorry Sean, throw all the numbers you want. The reality of life is $7.25 an hour is not a wage to support a family, especially when both parents have to work at these wages in order to actually make enough risking leaving their children alone at home or having to pay a ton in childcare which I see no point if one of them is working just to pay someone else. In these times teen are alone more often than before and crime rates amongst teens continues to raise because parents are not around to keep an eye on them cause they are working minimum wage jobs in order to support them.

What we need to do is focus more on educating people rather than just throwing more money at them. Hows about we teach people to earn this money rather than have to give it to them without gaining any new skills. Education is the key to success in life, not more money for the same skills.
Reply #21 from JoeUser Forums Top
Obviously you have a body of work, beyond the 8 years you site, to prove your theory. Please, if you would, cite the school of thought in economics that proposes that more money in the hands of the consumer actually lowers prices and inflation. What's that theory called so I can look it up?


Give it up Bakerstreet. He may not be the col, but he's just like him. Present him with undeniable facts and he abandons the thread.
Reply #22 from JoeUser Forums Top
I'm a little confused.

Libertarians do come in all stripes and colors, but I've yet to see one issue besides pot legalizatrion where you are on the same side as the LP. You sound more like a Green to me, frankly.

I've got an idea. Why don't we raise minimum wage to $100 an hour? Then we can all retire millionaires! After all, since minimum wage increases don't affect inflation, why not go for the full monty instead of just giving a "meager" 20% increase.
Reply #23 from JoeUser Forums Top
"i haven't said anything about brad and his theory on global warming (and have no idea what it is or what you are talkin bout) so this is just red herring rhetoric...."

I missed a theory on pirates and global warming. Ok now I've heard that wow. Couldn't have done without my fall down 15 flights of stairs laugh for the day. Almost got hit with a bus on my way out the lobby.

Hey I've got a theory about farts underwater causing cheese to taste better eaten after midnight anybody wanna hear about it anybody anybody?

"maybe the combo of raising wages and lowering taxes is the way to go...more money in people's pockets, and more receits could mean more tax revenue."

Yeah at the risk of overheating the economy or causing needless inflation with no real economic growth.

"who's to say our next big industry boom isn't just around the corner"

nano technology

"It's like someone demanding proof of gravity."

Well lets here your theory on that. Does it involve pirates?

"You're kidding, right? Or are you so deluded that....oh, nevermind. It's not worth my time or energy."

Smart beyond her years. Do you have a phone number?

"In the past week, I have found myself in agreement with people I never thought possible, cacto, Dan Greene, shadesofgrey, Loca, Sean on another topic...and now I have the final proof I need."

Really?

"No one can look at that and claim that unemployment is going down in 90, 91, 92, OR 93. It doesn't even recover until 95, and it doesn't drop to the levels you are talking about until the dot com boom created millions of jobs."

Hmmm according the chart just above the post it appears that the % peaks in the summer of 92 and starts a steady downtrend in fall 92 Winter 93. By 1995, the unemployment rate is down 2% off the peak and stays largely there until 2 years later.

Maybe we are looking at different numbers or maybe you are mentally incapable of distinguishing the meaning of integers or perhaps just mentally incapable in general.

Perhaps a chart would help. Open excel, copy and paste, click ok, look for the line that begins to fall in summer of 92, watch it continue to fall until 1997.

"Maybe someone here can explain to me how exactly will $7.25 will somehow get me out of poverty?... I work 2 jobs. On my day job, full-time, I earn $11 an hour. On my night job, part-time, I earn $10 an hour..."

You don't live in poverty.

"...but I can't live without satellite or Internet."

Can't and won't are two different things. "Can't" is living without food or water, "won't" is living without satellite or internet.

"But if the Democrats are gonna argue that this is to help the poor, hows about they do a real minimum wage hike? Hows about $10 an hour?"

Giving people more power then they have too, to get your vote isn't what they got elected for. Doubling the minimum wage would have adverse effects on the economy, because that would be a dumping of money into a market, and effectively lower prices a very great degree. Inflation would definitely be very much more pronounced then going from $5.15 to $7.25. The degree is due to the number of people working between $5.15-$7.25 vs $5.15-$10.00.

Many more people would be making much more money. Many more businesses would be unable to support that many more employees on payrolls.

"The reality of life is $7.25 an hour is not a wage to support a family..."

Then the obvious choice is don't have kids when you cannot afford to provide for them.

"especially when both parents have to work at these wages in order to actually make enough"

Employment is at will in this nation, nobody is forcing you to work, if you want to eat, want to drive, want to participate then great if not, nobody forces you to do so. Nobody also forces you to stay in a minimum wage job. Educate yourself, build skills, market your abilities, and you can secure employment well above minimum wage.

"...children alone at home or having to pay a ton in childcare which I see no point if one of them is working just to pay someone else."

Everybody has to make sacrifices, in economics, it's called opportunity costs. Having both parents work, means during the time they work the cost of that, is the opportunity to be at home with their kids. For some families the opportunity of having a parent in the home outweighs the value of working during that time.

"Education is the key to success in life, not more money for the same skills."

An excellent point.

"How is a minimum wage hike, whether it's to $7.25 or even, as you suggested, $10.00 an hour going to help the poor when the majority of them aren't even working in the first place?"

It isn't, why would we need to help them by raising minimum wage if they don't fucking work? Are you a turnip or why do you ask stupid questions like that? Obviously the idea is to raise the minimum wage of working people not those that choose not to work.

"I've got an idea. Why don't we raise minimum wage to $100 an hour?" LOL. Yeah, like Whip's ideas for saving the Samoans from a pitiful life in poverty.
Reply #24 from JoeUser Forums Top
"Perhaps a chart would help. Open excel, copy and paste, click ok, look for the line that begins to fall in summer of 92, watch it continue to fall until 1997."


Maybe you aren't paying attention to the assertion Sean made. The assertion was that higher minimum wage doesn't increase unemployment. The supposed "proof" was that unemployment was 5.4% in 1990, and in 1998 it was under 5%.

What was omitted was that it spiked to well over 7% in between. Not that it matters, because you are just here to flame anyone you can get a shot at on either side.
Reply #25 from JoeUser Forums Top
LW

Don't get me wrong, I agree with you 110%. I merely suggested the idea if we they gonna do it anyways and they really want to make a difference as they claim, why not make a real impact and actually give them something they can really work on. $7.25 an hour will not get anyone on their feet that have families.

BTW, I did read the article and it was great, just not been getting a lot of sleep lately due to my 2 jobs so I have not had time to get my mind together and write a proper response. Besides there are people there that have said more than I could ever. You are hitting the nail better than Mr. Miyagi (from Karate Kid) when he was building the small house in his yard.

<--- is not enough so multiply it by 20.