“argument looks a lot like…’Let the market decide!’ the battle cry of the priviliged, wealthy…”

income inequality

This comment by Daniel on the post The Right Way To Approach Raising the Minimum Wage

Sorry, no.

Your argument looks a lot like it boils down to “Let the market decide!” the battle cry of the privileged, wealthy Republican. Nevertheless, I’ll be glad to consider your argument’s merits once the minimum wage is raised (yep!) to bring it back into line with the cost of living. We’ll have to go back to 1974 or so—that’s a good year to look at, because that was the year when average American income stopped keeping pace with inflation. In constant dollars, the US Federal minimum wage declined between 23% and 24% between 1974 and 2013. During that timeframe, it never exceeded its 1974 purchasing power (though in 1978, for that year only, it equaled its 1974 purchasing power).

Now, you say raising the minimum wage doesn’t work, isn’t a real solution, et cetera. Given that it has obviously never been tried — not really — I don’t see any sound basis for your argument.

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Question of the day:

Should business balance shareholder return with employee living wage and benefits by shrinking the income inequality gap between employees and management?

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Comments

  1. Why does worker productivity never, ever enter into this argument. It’s either pay a worker what some liberal educational institution says is a “living wage,” or admit that you’re a rich, privileged Republican. While I am rich when compared to the lifestyle I grew up in as one of six kids in a poor family in southwest Missouri, I’m not really rich by any real standards. It was my privilege to work my tail off for 15 years so I could build up a big enough network and a good enough reputation to start my own business, which has taken 15 hours a day 6 days per week for the past seven years to maintain — if you call that a privilege. I have one employee, who I pay far more than minimum wage because she’s worth it. But who exactly are you to tell me what I need to pay the next person I hire, without any regard to that person’s output or capabilities?

  2. Tsach Gilboa says:

    This issue here what is fair and right for society and country as a whole while preserving the rewards for the hard work you mention. When the 6 Walton family members have a net worth of 41.5% of the US population and the US population has to provide financial assistance to their employees because they do not pay them a fair wage, that is wrong. Why do we as tax payers have to subsidies those Billionaires? Costco pays their employes a good wage plus benefits and they are also very profitable. If Walmart employees had a union and could negotiate with the company fairly, things would change. Telling your employees to avail themselves on tac payer funded government programs since you don’t pay them a fair living wage is not free market but corporate welfare.How do you justify that? I’m glad you pay your employee fairly. You are doing the right and business smart thing. Walmart (one of many examples) is not so we must step in the correct that.

    • I keep asking this question and nobody seems interested in answering. With ~40% of young blacks unable to find work, how would raising the minimum wage help them? Would it not further price them out of the job market?

  3. Heh. In the chart above, I like how the poor are worse off under socialism than capitalism. Of course, in a true socialist system, the well-connected are far better off than the poor, but at least the proles are equally poor.

  4. Tsach Gilboa says:

    It’s a comparative chart. What is shows is that income inequality if much worst in certain kinds of Capitalist systems, like the US, and a much smaller income gap in socialist systems (please note that every capitalist system has socialism in it including the US). Raising the minimum wage has been done over the years and recently in certain states and cities (federal one being debated) and nowhere has it reduced jobs. It actually helps raise the bottom and thus also the ones above it and provides a living wage for those people who work minimum wage jobs

    • “It’s a comparative chart. What is shows is that income inequality if much worst in certain kinds of Capitalist systems, like the US, and a much smaller income gap in socialist systems (please note that every capitalist system has socialism in it including the US).”

      It also shows that the poor in a capitalist system are better off than the rich in a socialist system. Of course, it’s just a silly chart with no data behind it. However, I do find it unfortunate that people who are sympathetic to socialism don’t think twice of making the poor worse off in order to see the rich worse off.

      “Raising the minimum wage has been done over the years and recently in certain states and cities (federal one being debated) and nowhere has it reduced jobs.”

      It depends on which economic papers you look at. A recent review of the literature found that 85% of papers on the subject found that the minimum wage does increase unemployment among young and low-skilled workers. Of course, it’s possible that the minority might be right, but it’s not nearly as clear-cut as you make it out to be. I’m scratching my head wondering why we’re prattling on about the minimum wage for those who do have jobs when there are so many that want jobs and can’t get them. That’s the real crisis.

  5. Tom Brechlin says:

    You said “he battle cry of the privileged, wealthy Republican” here is information I found. It doesn’t appear that most wealthy are republican.
    61 polls from 2009-2011, they were able to measure the opinions of about 400 respondents with annual incomes of $500,000 or above. Gallup reports only modest differences in their party identification: 57 percent identify as or lean Republican,
    Study of Economically Successful Americans and the Common Good, involved something unusual: a random sample of the rich. In particular, they interviewed 104 wealthy individuals in the Chicago area between February and June 2011. The median wealth of this group was $7.5 million. 58 percent of this sample identified as or lean Republican.
    Billionairs
    1 Bill Gates $54 B Microsoft.. d
    2 Warren Buffett $45 B Hathaway.. d
    3 Larry Ellison $27 B …d
    4 Christy Walton & family $24 B Walmart… r/d
    5 Charles Koch $21.5 B Diversified … r
    5 David Koch $21.5 B NY Diversified … r
    7 Jim Walton $20.1 B, AR Walmart …r
    8 Alice Walton $20 B Walmart …r
    9 S. Robson Walton $19.7 Walmart … r
    10 Michael Bloomberg $18 B NY Bloomberg… d, I, r
    11 Larry Page $15 B 37 Google …d
    11 Sergey Brin $15 B Google …none
    13 Sheldon Adelson $14.7 B NV casinos …r
    14 George Soros $14.2 B, NY hedge funds …d
    15 Michael Dell $14 B Dell… r
    16 Steve Ballmer $13.1 B WA Microsoft… r / d
    17 Paul Allen $12.7 B WA Microsoft, investments …d / r
    18 Jeff Bezos $12.6 B Amazon …d
    19 Anne Cox Chambers $12.5 B Cox Enterprises …d
    20 John Paulson $12.4 B NY hedge funds ….d/r

    7 – d
    7 – r
    4 – d/r
    1 –d/r/i
    1 – none

  6. Tom Brechlin says:

    I should note that the billionaire chart represents which party they contributed to.

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