Effects of minimum wage on the poor and on society?
 

Hey folks,
On our ballot here in Colorado, we have a minimum wage constitutional amendment. It is amendment 70. Summarized into a nutshell, it forces the minimum wage to be regulated by the state. It will bring out minimum wage to $12.00 per hour by 2020, and then to increase equally with inflation.

I see many issues with this. First, it is an amendment to the constitution. This makes it nearly impossible to change if it turns out bad. Second, it does not allow for depression or deflation(unlikely but it does happen). The last is the affect it will have on the poor, the economy and those who live on fixed incomes.

It is my opinion, that as minimum wage goes up, rents directly follow. In essence, a minimum wage has little benefit towards making the poor stronger. It does balance the unethical and corrupt to an even playing field, it mandates the lowest a company can pay an employee. So, in that sense, I think it does "protect" the poor, more so than helping them. Please don't misunderstand, I think helping the poor should be one of our countries highest priorities.

Then come the affects on the economy. For most of the consumer driven side of our economy, it will have a net zero affect. However, any manufacturing and exporting could be adversely affected by the law. I do think the affects would be minimal.

But then comes another problem I see. How does increasing the minimum wage affect those on social security or fixed incomes? They do not get the benefit of these raises. So it would be very possible that a person who is living okay today, will be poverty stricken in just a few years. They would be unable to live in our state,

Example, a $7.00/hour wage equates to $14k annually. A person who is getting $2k per month on SSI or $24k annually is in essence making $12/hour. As soon as the minimum wage goes up, the buying power of those on a fixed income goes down. In short order, they will be unable to even afford rent.


Sorry for the long wined post, just kind of thinking out loud here.

The same old tired arguments against a living wage in the 21st Century.

I would like to see evidence of this 'tight relationship' between minimum wage and rent. Is it just a hypothesis, or has it been demonstrated?

Do you have an idea of a system that will benefit the people from a controlled wage? I would love to hear it. And BTW, I am a s0@al!st at heart and a registered democrat.

My wife makes $10 an hour at a Native American casino in SoCal.
Don't tell me that low wages are a good thing.

It is my hypothesis. Thanks for pointing this out. I feel this way due to many years of living at minimum wage. I'll see if I can find any data on it. It may be just a crazy idea of mine.

I NEVER said that. I never said they were good! NEVER! Please take the time to read and understand my points, and if not clear ask for clarification.

I posted my concerns about how they affect the poor. And to clarify further, a minimum wage is ALWAYS the low wage in a society. So unless there is a way to balance that against costs, it does not benefit them as much as we would like it too.

The politer, less dismissive reply to your post is that each time the minimum wage is raised the dire predictions you've listed are made and they never come to pass. What does happen is that the increased spending ability of the people making minimum wage stimulates the economy. People at the bottom spend every cent they earn. Increase their wages and they'll spend that too.

The constitutional amendment part is another matter. We get them all the time out here on California. Since voters rarely do enough due diligence to truly understand the implications, often far reaching, of the initiatives they're asked to vote on, the chances of enshrining serious errors in judgment into the state constitution are very high. So, as a matter of principle, I'm against the practice of amending constitutions by a simple majority vote of the "rabble".

Not a crazy idea. I'd expect a positive relationship. I'm just wondering how tight it is. As stated, if income goes up $10.00 on the margin, rent will go up $9.50 or more. Perhaps it would more likely go up $1.50, or $.25.

Gavin Newsome did this and also a universal health coverage about 10 years ago in city level programs. I am pretty sure that you haven't heard anything about $$$ impact much because there hasn't been much of any. Oakland has done this more recently and a couple of poorly run restaurants failed but even more have started up and are doing fine as are SF restaurants. Nothing to fear unless you are a Koch.

Carl

Link


:)


Carl

Thank you for an intelligent and courteous post. In the bolded portion above, I do not mean to make it a prediction. Rather, I see it is the way it is. I FEEL that the minimum wage worker already lives in the environment I stated. I think the increase in minimum wage really does little to improve their situation. I don't mean to say we should leave it and not give it to them. That is not what I am saying. In fact, I would say having a minimum wage and law to govern it is good, and if it couple to inflation that is good to. It will keep the poor from going down the drain. My point is, it does little to actually improve their situation. And it has a negative affect on those who are living on a fixed income.

My mother would be a good example. She became disabled at 60 years of age. She is now 73. She can no longer afford rents in denver. At the time she became disable, she could live. She did not have a lot of money, but she could survive. Two years ago we had a population explosion in Colorado. That clearly plays apart in those dynamics. Even so, she was barely hanging on then. Now she lives with my sister(god bless her)..

Maybe I am incorrectly drawing a correlation between minimum wage and the cost of living.

Oregon has already passed a bill similar to the one proposed for Colorado Amendment 70, phasing in an increase to $13.50 ($14.75 in the Portland metro) by 2022. The first increase, already in effect, raises the minimum wage to $9.75 statewide.

Did the rent increases in Denver coincide with an increase in the minimum wage there?

What has happened is that rents everywhere have increased astronomically everywhere since the housing foreclosure crisis, particularly in metro areas like Denver. The people who lost their homes during that time were forced into the rental market. Similarly, young people just starting out in life ended up in the rental market for a number of reasons like being already over-burdened with student debt and under-employed due to the recession. So, this massive influx of people into the rental market significantly reduced the supply of available rentals and thereby created a "sellers market" in rental housing. Some of the most profoundly effected by this are people on fixed incomes, especially since it came in a period of little to no COLA increases.

I think the major flaw is in correlating increases in minimum wage with increased housing costs. Too simplistic.

Here is the thing:

You come out and start a thread about a very controversial subject the minimum wage.
Then you make the same standard arguments conservatives have made since Moses was born. Then you sort of couch your language in a warm and sort of philosophical armchair by the fireside manner and diffidently hedge your points by saying you are really concerned about the poor (you seem sincere) and that the real issue are people on fixed incomes i.e. SS and pensions ( as if the latter is still an option for most workers).
The minimum wage is not about retirees or your relatives on fixed incomes. It is about workers in our society being given dignity of the hard work they do. It is about fairness.

I told you what I felt and what probably many who hear arguments like this immediately think in their minds.

My wife would never, ever have gotten to 12 bucks an hour if Jerry Brown had not raised the minimum wage. The people who she works for are like most employers in our service economy: they only care about the bottom line.

So your nice and polite post is indeed warm but the message between the lines still is a very bad one ok. The outcome for your philosophy no matter how nice your language is still the same: Americans getting screwed. It may not be your intention but the result is the same. Nice corporations who give their workers across the board raises do not really exist. That is why we have government.

You know most progressives want the minimum wage to be increased. So do most Zo************************ts, those in the mold of Sanders and Western European Democracies anyway.

That is an excellent and considerate post. Thank you!

yes I am sincere, and not as politically versed as many of the members.

A fellow library internet pirate/user is looking for a new place due to the rent increases going on around here. Rent and housing prices are all about supply and demand.

I know I may seem like an asshole, and most likely I am. I am not the same icenine when I came here 5 years ago so my apologies.

I have been in Portland, OR since this Sunday and there is no sales tax here, but there is state income tax. Going to WA this afternoon and will be there for a few days, there is no state income tax but they do pay sales tax. Now in California, we pay both state and sales taxes.

So the government of CA edicts a rise in minimum wage, costs will proportionately go up (rent is at some point more of a supply issue) and in the end, people will wind up spending (or having to due to increase in prices) the additional income. So who gains? The government of course, since they get to tax every penny we earn one way or the other. They get a windfall for doing nothing.

So CA wants to increase the minimum wage, great. Have them reduce the sales tax proportionately. Will it happen? Never.

Rent increases are a result of the supply and demand. More renters and less apartments mean higher rents. I doubt very much that a minimum wage of $12 will impact that formula. In fact I think that booming real estate costs determine the local apartment rents more than anything else...that is when they really go up. I think that a person getting paid low wages are sometimes victims of other classes being able to afford the American Dream. In other words if a home costs a million dollars in parts of San Diego county those working minimum wage need some cost of living help in those areas.

I don't mind paying my fair share of taxes both income and sales tax. Because I am a CalVet my daughter goes to Pomona tuition free so I don't mind paying taxes here.

My wife's employer does not pay for holidays even ones like Christmas. If you get ill they do not pay any sort of compensation but the CA EDD does. Of course my wife has me and my income to fall back on but many of her co-workers not connected to the middle class like we are. The $10 an hour is all they have.

We are good.

First, my apologies to the board if I rubbed salt in anybodies wounds. Second, I actually got a lot of good information from this thread. Lots to think about.

I do have to say that my moms plight has skewed me quite a bit. I also have to say the minimum wage had little to do with rent increases in Colorado. Rents really boomed in the last two years, about the time we legalized marijuana. But, before that they had risen significantly too. In retrospect, I think it may have little to do more with the recovery of the economy from the 2008 crash - maybe?

Bagley Cartoon: Game of Life - http://www.sltrib.com/opinion/451574...n-game-of-life

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My input to this discussion is a simple one, tie any increase in elected officials salary to the minimum wage. If one thinks they need a raise so should the other.


Barney