The Great Debate

Why am I not surprised that Ralph Nader again rides into town beating a dead horse?

Owners of businesses that use minimum wage people will spend just so much to get burgers, etc. out the door. Raising the minimum wage without increasing the capability, value or productivity of those workers will result in a reduction of the number “on duty”.

Whether that is called a reduction in employment or a reduction of jobs, or a reduction of opportunity for those who have NEVER worked to “get on the merry-go-round”. It means that tables get cleaned less often and less well, and one or more fewer on the speaker or behind the register during peak periods.

An employment opportunity that functions as an apprenticeship is good for society. The minimum wage is also an “on the job training” wage for something better. Our society does not pay people to educate themselves to the level required to be a productive citizen. It was never meant to be a wage that would support a non-working wife or family in the “American way”.

Employers can not justify paying more and more to train those who are “at the bottom of the pile” in terms of experience, intelligence, motivation and/or capability to be useful. And let’s also be honest as to what is already happening to minimum wage jobs that currently exist.

They are being diluted and “dumbed down” so anyone with an IQ over 50 can learn EVERYTHING needed to perform well by two weeks “on the job”. If that position offers no further “advancement”, there is NO possibility of a raise when there are ten more “out there in the street” who will jump at the chance to replace someone dissatisfied.

Furthermore, more and more full time “minimum wage” positions will be restructured into part-time positions that are worth less to struggling individuals in our economy desperate for ANY employment. These typically have even less opportunity for advancement, have NO benefits (holidays, vacations, sick days or retirement) and require even less “skill” to be done well.

Nader speaks of “studies” other “large Western industrialized countries”, “voters” and how the “economy” would benefit while speculating how more money will enrich the lives of those STILL employed full time at the minimum wage if and when it rises to $9.50/hr. He does NOT speak of those within the current “30 million” that will no longer be employed or of those that will not then be hired. Nader denies the latter even exist in “his world”.

Every increase in the minimum wage at a time that any job at all is in great demand and short supply makes their day to day existence much, much more “challenging”. In today’s world, increasing the minimum world may allow a relative few to grab the “golden ring”; but far, far more will be thrown off the merry-go-round, perhaps forever.

LOL. Where’d they dig this ole buzzard up? Ralph, Ralph, Ralph…..nobody listens to YOU. Get it?

But people do listen to Ralph Nader – they’re listening right here on Reuters. And when I see him here with an inane article about a non-starter issue, trying to insinuate himself back into the political landscape, I think, “Is this guy getting ready to make another spoiler presidential run?” You never really know with Nader. He took 2.8 million votes away fron Gore in 2000.

Raise the minimum wage? another job killer.

Personally I’m a fairly moderate college student. However I agree with Ralph on this one. The argument that skill isn’t increasing so wages shouldn’t doesn’t hold up when you look at it. The skill of minimum wage workers hasn’t decreased, many do manual labor and many do things like flipping burgers, and yet real minimum wage is the lowest its been since 1968. The argument of skill begs for the wage to be raised.
The evidence on unemployment is a tricky one, because yes, in the short term businesses lay-off because they think they can’t afford the workers and in the immediate time period after a wage raise there is a raise in unemployment, however in the long term the effect is often employment stays where it was, but living conditions and household spending both go up.
This is all evidenced by Oregon, which has the highest national minimum wage, by San Fransisco, which has the highest minimum wage and all of the states with minimum wage higher than the federal level. From all of these states the evidence is clear that living conditions are better and spending is better and not to long after unemployment goes up, it goes back down.
The issue with minimum wage is not the unemployment rate but the ability of Americans to look at the big picture and the long term. There is more than one person and there is more than one moment. If Americans learned that things don’t change immediately and that waiting is important this country would operate much better. This was seen in the crash. Right after the Lehman Brothers crashed the market only dropped 3 points. What happened after that? There’s a reason congress passed that big bail out and it wasn’t because the system was okay.

Sounds like Romney has a running mate. If Romney can’t rise above Obama in the polls, he can try to surround him. Nader on the left, himself on the right.

Won’t work, but it’s an interesting approach. Obama = 2-term President.

This is addressed to the commenters who think that raising the minimum wage is a bad idea: Are you serious? Have you given this even a moment’s pause? Here’s our current situation: we have such an overflow of investment money with no good place to put it that corporations are sitting on unprecedented mountains of cash and investors buy up government bonds at negative return rates. Meantime, we are woefully underutilizing our productive capacity (plants shuttered, people out of work), but there’s too little consumer demand to justify ramping up. But you think putting some of that corporate cash into wages would do harm?

Do you propose that the minimum wage should not even keep pace with inflation? Should we abandon it altogether? Are you suggesting we’d all be better off with a Chinese wage structure?

You seem to have learned a handful of rules that you think apply to all economies at all times. Different conditions call for different solutions, folks. Try to check your prejudices for a bit and just see where you might end up.

And BTW, someone with the moniker ‘Greenspan2′ should be the last person talking about credibility.

I respect the spirit of Mr Nader’s piece, but most poll respondents have become schizophrenic when asked about social issues (that also involve their net worth). Many Americans waited at least four years for their investment portfolios to approximate anything close to pre-2008 value. Any move that translates to lower profit, and lower stock price – will rattle the retiring boomer demographic considerably. Unsurprisingly, politicians have accounted for this. So long as government can ‘show’ the cpi hasn’t ballooned…

Nader please take a vow of silence. You’re embarrassing yourself in your extreme ignorance of everything political and economic. Take a class in how to enhance your charisma, even though you’re decades too late. You might still be able to capture the attention of a few of the residents of a local retirement home.

The dumbest smart person in the country…

Saw this on CBS News. Sounds vaguely familiar.

Consumer advocate and former presidential candidate Ralph Nader says he sees “far too little difference” between President Obama and presumptive GOP presidential nominee Mitt Romney, arguing that “we deserve more choices in this country.”

So $9.50 an hour will kick-start the economy and raise the standard of living of all of us? Then why be chintzy? Raise the minimum wage to $15, $20, hell, $50 an hour. Think how that will goose the economy. We’ll all be rich! Write your congressman!

I got a kick out of “A 2011 study by the Chicago Federal Reserve Bank found that for every dollar increase to the hourly pay of a minimum wage worker, the result is $2,800 in new consumer spending from that worker’s household over the year.” $1/hour x 40 hours/week x 52 weeks/year = $2080/year. In other words, raising the guy’s pay a dollar an hour makes him spend $720 a year more than he earns. I’d like to read that study.

And, Ralph, I’d like to point out that the Barack Obama of the 2008 campaign is the same Barack Obama of this Presidency. His lack of leadership is not shameful — it’s characteristic. What makes you think the Obama of the campaign really intended to force through a raise in the minimum wage?

Funny how Ralph Nader’s positions always help Republicans. Thanks to Nader we had 8 years of America’s worst President. Tens, maybe hundred’s, of thousands of people died because Nader allowed his ego to override what was best for the American people. So here we have Nader at it again, this time going after Obama. It’s easy to wage a pea shooter war from the sidelines when you have nothing to lose.

One would think that Nader was smart enough to know the following, but I’m no longer sure. Obama has to be very strategic in every move he makes, or we’ll have Mitt Romney’s puppet masters running our country for 8 years. That’s the reality we’re faced with, which is something Nader can’t seem to grasp: reality. Obama can’t say and do everything he’d like to, or the rightwing propaganda machine will wrap it around his neck and hang him with it. Everything has to be carefully weighed, more so than any President before him. If he didn’t recognize this, he couldn’t get ANYTHING done.

We should have had a single payer healthcare system. The reality is that if Obama fought for a single payer system, not only would he have failed at getting ANYTHING to improve America’s healthcare, but he would have been successfully labeled a radical leftist socialist and he’d have guaranteed America 8 years of a Mitt Romney Presidency. It took me a while to figure this out, but it’s true. The Republicans have made it clear from the moment Obama started running for President that they would use his race against him by painting him as not a real American, something “other”. To Obama’s very impressive credit, he read this from the start. I didn’t vote for Obama, but this realization is what really impressed me about the man and opened my eyes to just how bad things have really gotten here in the US. I will proudly be voting for him this fall. He will get as much done for the American people as anyone can possibly do. Unfortunately, that’s limited and it’s because of the Republicans, which is who Nader should be criticizing, not Obama. It is the environment “conservatives” have created that stands in the way of so many things our government should be doing, and raising the minimum wage is just the tip of the iceberg. Consider our absurdly lax gun control laws. Are you going to blame Obama for that next? You, sir, need to learn how to peel back the layers and get to the real core of the issues.

Obama could be a great President, but it’s unlikely that he’ll have the opportunity to prove it because of what the Republicans have done to us, the political party that Ralph Nader is bound and determined to assist at the most “opportune” times. Obama is not the enemy, Mr. Nader. Unlike you, he’s on the front lines leading the charge in an extremely difficult and complicated war, a war in which he’s representing the American people, and a war in which the American people are at a grave disadvantage. And you’re not helping.

@Sanity-Monger,

You say: “we have such an overflow of investment money with no good place to put it that corporations are sitting on unprecedented mountains of cash and investors buy up government bonds at negative return rates…you think putting some of that corporate cash into wages would do harm?”

Even though the IRS HATES those who look at cash from any source as “their money”, corporate cash and investor cash isn’t the government’s to sieze or direct as they see fit without “due process”. There is harm whenever and wherever the rightful owner of legal assets is deprived of the right to use said assets as THEY see fit.

You say: “…we are woefully underutilizing our productive capacity (plants shuttered, people out of work).” Please explain how this is different from when buggy whip factories were obsoleted by the automobile, or when steel production became economically sustainable when union wage rates were figured in.

Much of today’s idle “productive capacity” is predominately obsolete industrial detrius incapable of competitive operation that will likely cost more for present owners to repurpose than to buy suburban commercial property and develop from scratch (with new streets and modern utilities). YOU have NO SAY in that which you don’t own or otherwise control! Get used to it.

You ask: “Do you propose that the minimum wage should not even keep pace with inflation?”

What’s your point? It is the responsibility of our federal government to protect the purchasing power of our currency. There is no grade low enough to be applicable to our Fed’s “post-war” fiscal performance.

Consider that America has NEVER paid down the national debt incurred during WW II! Instead, the “Fed” has presided over policies that have steadily inflated it into insignificance, along with increasing the dollars people get when they sell long term assets (and then those “added dollars” on NO additional purchasing power are taxed at higher and higher rates).

In 1967 I paid $21,800 (30-year mortgage) for a 1225 sq. ft. new house on the eastern fringes of development in Orange County, California, for. In 1987 I sold it for $179,000, then paying off some $10,000 remaining on the mortgage and some $13,000 closing costs and sales commission.

From the remaining $156,000 I could deduct some $15,000 “improvements” over the years and the $11,800 principal “invested” in payments, leaving $129,200 in 1987 dollars. Tax due on $129,200 (when that amount was added to $35,000 other annual income) would have been considerable (had I not timely reinvested it in real estate), when it would have taken $74,146 in 1987 dollars to buy what $21,800 would have bought in 1967. My “gain” was NOT $129,200, but that amount LESS $74,146, or some $55,000!

So “our” federal government “games” ALL citizens with currency, wage and taxation manipulations worthy of a “shell game”. History strongly suggests that “our” government, whether politician, appointee or bureaucrat, will predictably advance it’s own “best interests” over those of “we, the people” whenever and wherever a choice is necessary.

Hmmm, let’s see… Should I pay an honest and hardworking person employed with three different jobs a living wage? No, I really don’t admire hard work, but I do admire the financial brilliance of the Wall Street bankers the American’s had to bailout to the tune of trillions. If you think paying a few extra cents for a burger is going to bring this economy to its knees, perhaps you have been sitting at the roulette wheel too long.

I voted for you in 2008 Ralph, I’m a Libertarian. Face it Obama is a whore for Unions, Banks, Golf or anyone who has cash to grease him. So shed no tears for a street walker but for the children he left at home and abused.
As for the minimum wage, stuff it, and all who support it are whores for the Chinese. The minute you interfere with the right of free citizens to contract freely among themselves is the minute you lost me.

I am SURPRISED at the ideologically prejudiced response to this well-informed article from our distinguished guest! Many of the people contributing comments here along the lines of “there’s not enough money to go around in present economic circumstances, we can’t afford to increase the minimum wage”; appear not to understand economics.

NATURALLY, the policy decisions we support depend on the OUTCOMES we desire; but I think we ought to agree on the following KEY PRINCIPLES:
* Money is simply a convenient trade facilitator, and ideally should be regulated so as to help ensure everyone gets their fair share (reflecting merit, hard work etc.) and so that the vast majority of the population is well motivated to work hard improving their country and thereby improving themselves.
* With a fiat currency, the Fed can print as much of it as they think will benefit the U.S. economy. There is no fundamental limit to the “amount of money” available. The main question is NOT therefore, “how much money do people have”, but rather, “how is the money/ cash flow DISTRIBUTED, and how does this relate to the distribution of GOODS and PRODUCTION?”
* There is an unlimited supply of work. No matter how many people are employed 24/7 working like dogs, or however many immigrants arrive in the USA; there will always be more land to cultivate/ improve, more weeds to pull, more mouths to feed, more children to educate, more suffering to alleviate, more medical & scientific innovations to research…
* The more money working-class people have in their pockets, the more they will spend locally (boosting employment as by at least as much as employment rates fall due to sweat-shop layoffs)… The same is not typically true for rich investor-class folks who stash surplus accumulated gold in the tax havens whenever they see trouble ahead (the very times when that money is most badly needed for trade).
* It is bad for people to be unemployed or for their skills to be underutilized. This is neither good for people or the economic situation of their fellows. It is also bad for the economy for some people to have an over-abundance of money (so that they waste all their time seeking pleasure, and waste their talents), while others are effectively held down in slavery, underpaid so they cannot afford the essentials in life or afford to invest in improving themselves & their neighborhoods (thereby wasting their lives & talents too!)
* Economics/ trade has always been about a balance of power between rich and poor. The exchange of money and trust (on which trade & employment based) will only happen if people feel they have something to gain by it. This will only happen if everyone feels like they can earn a fair wage by working hard; that they are not being pushed back by the monetary treadmill despite making their best effort.

Gradually increasing minimum wage to (say) between 1/3 and 1/2 of median hourly wages cannot increase unemployment (particularly not, in the long term). Rather, it will make for a better motivated, better utilised, harder-working, smarter workforce. Sweat-shop jobs will be lost, but the REAL, local economy will improve, quality of life will improve, labor relations and employment practices will improve, the nation’s physical and mental health will improve.

Our forebears from the 1950′s and 1960′s appear to have understood principles we are forgetting. There’s a reason why they did better economically than we are doing…

Hopefully for the good of the nation’s economy, there is never another minimum wage hike. Instead all minimum wage laws should be eliminated. This would definitely improve the economy and help with other national problems.

The facts no one wants to read.

Learn to think for yourself.

Censorship is evil.

Where is it ? Why it’s stuck in Gitmo with his other promises.

matthewslyman,

Your idealisms should not be confused with free-market economics.

A minimum wage increase, by definition, increases the cost of labor independent of productivity. When that happens – cost up, productivity unchanged (now it’s actually declining in the U.S.) – then a commensurate amount of price inflation will inevitably affect the overall rate of CPI inflation (now and 87 of last 100 years) or deflation (13 of last 100 years) and our global competitiveness.

China and other nations have thrived at our expense thanks to a combination of American political snake oil, including the minimum wage, and union labor wage/benefit intransigence; in other words, job outsourcing that’s encouraged by none other than Obama, Nader, et al.

I suppose the ever increasing minimum wage will help us compete with china? Come on people, the whole minimum wage idea is stupid. If it were such a great idea, why not set the minimum wage to $250.00 per hour, then we would all be rich right?

2 points: if minimum wage was 25% higher and statuatory (as M. Nader is advocating) I can promise you MANY more people in America will be making minimum wage. Secondly, when the economy is barely humming along is NOT the time to pull this kind of manuevre – you do it when the economy is booming and can absorb the short-term hit for the long-term gain. The short-term hit now would mean another recession; coupled together with ‘taxmageddon’ that will come, now we have ourselves a deep recession. But that doesn’t matter to M. Nader, being a millionaire himself…
The private sector has actually been doing reasonably well. It’s govt that has been slashing jobs all across the board. It’s fair to say that govt can’t afford those jobs anymore, but the question is why? Because the tax code is ridiculous and overly dependant on cyclical markets (housing anyone?) and filled with loopholes that only a few could ever exploit or even know about! Simplify! Under half median income: 0%; half to median: 10%; median to 5x median: 20%; 5-10x: 25%; above 10x 30%. Businesses: under $10m in revs: 15%; $10-500m: 20%; above $500m: 25%. 2% Federal VAT + states can set their own VAT. No loopholes, maybe MAYBE a 5yr tax credit for eliminating overseas positions and bringing them back to America. No interest deductions for mortgages; no interest deductions for business UNLESS their R&D or new hire is MORE than the deduction.

Would Gore have started the criminal war in Iraq, until Nader apologizes to the world for the big lie that there was no difference between Bush and Gore, I will not listen to or read anything he has to say. Millions have died because of his ego.

@CDN_Rebel… yes, but please NO VAT.. will be a huge administrative burden, look at Europe now.

Whoops, I meant inflation is guaranteed since 1971, not 1974. darn typos

The government cannot afford to allow the minimum wage to fall too low or the social conditions of this country will create more of the people OOTs despises. Kiss real estate prices goodbye (good buy if you like messier and rougher tenants with an attitude). Start to think dirty and ignorant serfs. After all OOTS, those undeserving aren’t going to be able to afford that much continuing education and it may be pointless to try, as there is so little growth. The minimum wage was a subsidy for the whole country’s standard of living. And although it seems counterintuitive – it is the floor below which only squalor and serious pain waits. It is the kind that doesn’t just wear you out but can destroy your vision and range. The economy seems to need upward pressure from all segments of the society or the prices will not rise considerably. But obviously all the pressure is down now and that could be called “the developing world has drilled a hole in the dingy of our standard of living.” It may never be plugged and the boat will sink.

People who believe in one prime commandment probably make the comments that hate Nader’s suggestion: let nothing diminish the apparent magnificence of my pile. They have the means to adapt to inflation and the amount of so called hard work may be little more to them than turning to the nearest financial shark or helper. The low wage people tend to find the financial sharks. The upper wage people tend to get the better help. But the top gets every level of help with near reverent concern.

Maybe we should weep that Mr. Nader has the optimism that something will work now.

When all arguments lock and neutralize, think of a key and a lock that allows a bolt to fall to a lower level in the mechanism. Call the mechanism the intricacy of political and economic life. The rock bottom of that discourse is sheer violence and fear. It’s amazing how those with the means can forget what that looks like and how threatening that can be.

Maybe that was the neuroscience PHD’s lesson? I still can’t imagine what that man was about. That people are watching the movies and forgetting that the crimes can be real? There is no such thing as long lasting security in the modern world. The permanent valuation of one’s assets is an illusion and seems to happen best when so many others are stripped almost naked. The Romans needed their slaves because they couldn’t live like “human beings” without them. They loved massy wealth and couldn’t skewer and roast enough flesh for their appetites. They didn’t blanch at human flesh either but they didn’t like to eat it. That was, and in many ways, still is the way we like to define ourselves. This country has long identified with them and liked their style. If OOTS hates what he sees now – what will happen when it continues for decades longer? Will his undeserving have grown scales or gills and agree to live under the floorboards and stay out of sight? Or will they have become extinct? No one mentions the extinction rate of species anymore? But I forget this is a business paper.

BTW – Home depot doesn’t even use employees from the looks of it. They have few sales floor assistants. When they and every low-income job has been replaced with automation, THE SOICETY MAY NOT NEED THOSE UNDESIRABLES THAT AREN’T WORTH THEIR KEEP? It’s too bad they couldn’t get jobs working for the Chinese to make the robots and the computer consoles. If you can’t make you’re not going to make it.

Those in favor of the lowest, or at least shrinking, minimum wage want a world were there are graded people and OOTS will give them the grades. He forgets that the lowest levels of society are full of all the diseases and problems that wealth helps to insulate against. They do not sound like they believe God helps those who help themselves but generally look to their discount broker or Goldman Sacks and company.