What happens if Biden gets his $15 minimum wage passed?

[LV426]

This assumes that demand will be related to the higher wages of those receiving them. This isn't true.

Yes, it is true because low income people do not largely have debt or savings, which means they are going to spend the money as soon as it hits their pocket.

That's the case for up to 58M people, whom this change will affect.

Demand for a company's product in this scenario could go up, down, or stay the same. You can't assume that because wages rise demand will rise with it, certainly not on the micro scale you can't.

It will go up simply because of more spending. Up to 1.5% GDP's worth of it, or up to $350B annually. I'm old enough to remember when you were celebrating Trump's GDP because it barely got to 2.9%.

It may not raise disposable income at all. For example, you raise someone's wage from $7.50 an hour to $15 an hour. Let's say that makes them ineligible for food stamps (a form of wages in kind) they were receiving along with eliminating their EIC on taxes when filed (another wage in kind). Their taxes also rise offsetting some of the new wage. So, their overall earnings for the year say virtually the same for our example, just they are no longer receiving as much government support. They have no change in disposable income, no noticeable change in spending. Instead, all that has happened is the burden of paying them has shifted from the government and taxes to the employer who may not be able to bear that burden so they end up being laid off or let go. Now the burden on the government and taxes rises precipitously instead of going down.

So this is bunkum economic theory that doesn't take into account the elasticity of a labor market where the wage is much higher. That results in higher wages ACROSS THE BOARD, as employers have to compete to retain employees who could simply go get a different job.

And you're stating here, plainly, that the consumer spending done by these people would REPLACE the government welfare spending done for them.

That's a bad thing, why?

No one can predict with precision what will happen if this passes.

Sure we can, because we have been through this 23 times before. Every single one of those times, you people have predicted and warned of economic catastrophe, and every single time YOU PEOPLE HAVE BEEN WRONG.

You're just repeating the same failed arguments from 80 years ago, that all the empirical evidence we've seen since destroys entirely.

Increasing wages is how you increase demand, and the resulting price increase is not $1:$1, meaning, the price of consumer products and services doesn't increase at the same rate as wages do.

If you believe they do, you're a fucking idiot.

 

[Son of the Revolution]

^^^^^ Would you just look at this loser and crybaby?

yes you are a loser

 

[LV426]

As I just demonstrated, this is not necessarily true. Consumption could contract or stay the same. It isn't fully predictable.

It's not necessarily true if you are a shitty business owner.

But wages aren't the reason why any business fails...poor management is the reason.

Plenty of businesses exist that pay their employees at least $15/hr...so if they can make it work, why can't others?

You make the mistake of thinking this is not a zero-sum game.

It isn't a zero sum game. It is a game where wealth is created by increased consumer spending through higher wages.

That is, you assume that wages go up with little or no negative effects.

Jesus Christ...if you had bothered to read anything I wrote, you'd see that I said, very plainly, that yes, costs may increase nominally or incrementally, but that is more than made up for by increased revenues, that come from increased consumption, that comes from increased wages.

 

[LV426]

Again, you simplify the problem to benefit your argument. If someone's wage goes from $7.50 an hour to $15 an hour, those wages are now taxed at a higher rate.

You sure about that?

I mean, really, really, really sure about that?

Like, 100% sure about it?

Are you willing to stake your entire reputation on that?

Because I can utterly destroy you here, but am holding back because I know how fragile your ego is.

So I'm giving you a chance to correct yourself, or be utterly humiliated. Your choice.

 

[LV426]

The overall effect might well be they end up with less income than they had before. It isn't fully predictable.

No they won't.

Again...I can destroy you here.

Utterly annihilate you.

I mean, an EPIC annihilation that will probably result in you either putting me on ignore, or ditching this ID to start over with another.

So I will ask again, are you 100% entirely sure of this??

 

[Legion]

It's not $1:$1...you realize that, right?

Nobody said it was, did they? You realize that, right?

That increasing someone's wage from $10/hr to $15/hr doesn't mean the cost of a hamburger also goes from $1 to $6.

Nobody said it would, did they? You realize that, right?

Higher wages means higher revenues because of higher spending by people who don't have debt or savings, largely.

Are you 100% entirely sure of this?

 

[T. A. Gardner]

Go for it...

 

[Legion]

If someone's wage goes from $7.50 an hour to $15 an hour, those wages are now taxed at a higher rate. .

Are they?

According to Statista, 71% of American households with an income below $40K annually paid no federal income tax in 2019, and about 46.6 percent of U.S. households with an income between 40,000 and 50,000 U.S. dollars paid none.


https://www.statista.com/statistics/242138/percentages-of-us-households-that-pay-no-income-tax-by-income-level/

 

[LV426]

Go for it...

OK, you asked for it...don't say I didn't warn you this would be bad. I was trying to be a nice guy.

If someone's wage goes from $7.50 an hour to $15 an hour, those wages are now taxed at a higher rate.

No they aren't, because of the current tax brackets...

Someone making $7.50/hr makes $15,600 a year
Someone making $15/hr makes $31,200 a year

$15,600 would put a single worker squarely in the 12% tax bracket
$31,200 would also put a single worker squarely in the 12% tax bracket

Why? Because the 12% tax bracket is income between $9,076 to $40,125.

So again, armed with this new knowledge, are you going to correct what you said before, or dig in deeper?

You also realize, of course, that the income brackets were created so that you didn't pay the same tax rate on every dollar of income you earned.

So there is no world, no math, where someone gets a wage increase and ends up with less after taxes than they had before.

 

[T. A. Gardner]

The CBO says what I say about this:

The federal minimum wage of $7.25 per hour has not changed since 2009, though many states and localities have set their minimum wage above that level. Increasing the federal minimum wage would have two principal effects on low-wage workers. For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty. But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold.

https://www.cbo.gov/publication/55410

Forbes says what I say about this:

Raising the minimum wage has a number of serious and negative unintended consequences. Employers, especially small family and midsize businesses, will be disproportionately hurt by the extra costs incurred. The local neighborhood stores and businesses with razor-thin profits will be forced to raise prices to make up for the addition labor costs. With the increased prices, customers may elect to take their business elsewhere. Losing customers means losing income, which could result in the business having to layoff workers.

https://www.forbes.com/sites/jackke...ences-of-the-15-minimum-wage/?sh=11bd0414e4a7

It's as true in India as it is here:

Employers may have to revise offer letters if the new Code on Wages becomes effective from April 1, 2021, which may result in a lower take-home salary for a majority of employees. The new definition of wages is part of the Code on Wages, 2019 passed by Parliament last year. The rules to enforce the law were also firmed up last year.

Along with the other three codes on industrial relations, social security and occupational health safety and working conditions, the implementation of the Code on Wages is planned from April 1 next year.

https://www.news18.com/news/busines...ke-home-salary-next-year-onwards-3212459.html

Even Progressive Vox says I'm right:

Ultimately, workers already employed either saw their take-home pay go up or stay roughly the same while working fewer hours.

https://www.vox.com/the-highlight/2019/7/13/20690266/seattle-minimum-wage-15-dollars

Everybody who looks at this says the same sort of things:

https://www.quora.com/When-minimum-...y-making-that-increase-get-an-increase-in-pay
https://www.thebalancecareers.com/what-happened-to-my-raise-2386383

 

[Ichabod Stain]

sears will be out of business, and a lot of fast food will be automated.


small businesses will shutter due to corona strain and now having to pay people more money they don't have./

but truthfully, a higher minimum wage is not what's devastating the American economy right now.


focus, people.

 

[LV426]

The CBO says what I say about this:


https://www.cbo.gov/publication/55410

Forbes says what I say about this:


https://www.forbes.com/sites/jackke...ences-of-the-15-minimum-wage/?sh=11bd0414e4a7

It's as true in India as it is here:


https://www.news18.com/news/busines...ke-home-salary-next-year-onwards-3212459.html

Even Progressive Vox says I'm right:


https://www.vox.com/the-highlight/2019/7/13/20690266/seattle-minimum-wage-15-dollars

Everybody who looks at this says the same sort of things:

https://www.quora.com/When-minimum-...y-making-that-increase-get-an-increase-in-pay
https://www.thebalancecareers.com/what-happened-to-my-raise-2386383

Right, but none of that actually proves raising the MW causes harm, and by cherry picking certain op-Eds, and ignoring others, you're now trying to backtrack on the arguments you made before, that I slammed down.

Ultimately, workers already employed either saw their take-home pay go up or stay roughly the same while working fewer hours.

Right, working fewer hours. Why is this a bad thing? Also, what you are deliberately leaving out is the job creation that comes from increased consumer spending.

None of your Op-Eds talk about that. That's by design.

So no, businesses aren't going to be dramatically affected in a negative way by this because of more consumer spending. So they will have to expand.

 

[T. A. Gardner]

OK, you asked for it...don't say I didn't warn you this would be bad. I was trying to be a nice guy.



No they aren't, because of the current tax brackets...

Someone making $7.50/hr makes $15,600 a year
Someone making $15/hr makes $31,200 a year

$15,600 would put a single worker squarely in the 12% tax bracket
$31,200 would also put a single worker squarely in the 12% tax bracket

Why? Because the 12% tax bracket is income between $9,076 to $40,125.

So again, armed with this new knowledge, are you going to correct what you said before, or dig in deeper?

You also realize, of course, that the income brackets were created so that you didn't pay the same tax rate on every dollar of income you earned.

So there is no world, no math, where someone gets a wage increase and ends up with less after taxes than they had before.

Until you factor in other things you didn't consider.

The taxes taken out are a percentage of pay. At 15,600 12% would be $1872 in taxes. At 31,200 they now pay $3744 in taxes. That's over simplified but it shows that more comes out. The employee's taxes went up.
Then there's what the employer does. Maybe the employer doubles the amount an employee has to pay in as their part for health insurance. Or, the employer cuts hours. There are all sorts of things here that can effect the bottom line pay.

You continue to operate as if a pay raise happens in isolation and everything else will remain static. It won't.

 

[danielpalos]

So, what happens if Biden gets the minimum wage to $15 an hour?

Here's were the minimum wage is right now:

In many states that more than doubles it overnight. Given the current state of business closures for Chinese Disease, will they just decide to close for good in those states? Will employers be able to take that big a wage hit? Will the states with larger portions of the population at minimum wage take a bigger hit?

How will this affect workers making $15 an hour or more?

My prediction is it is one of many blows that the economy will take causing recovery to grind to a halt... Will Biden blame Trump for that?

It means labor will be better able to afford our first world economy, create more in demand and generate more in tax revenue. The multiplier will do the rest.

 

[Legion]

It means labor will be better able to afford our first world economy, create more in demand and generate more in tax revenue. The multiplier will do the rest.

So you say.

If that's the case, why is Calipornia (with a $14 hourly minimum wage) the nation's leader in income inequality, poverty, and homelessness?

Four of the five American cities with the greatest incidences of unsheltered homelessness are in the Beholden State



More than half a million people are homeless each night in the United States, a White House report found.

And nearly half of them are concentrated in one state: California.

All told, 47% of all unsheltered homeless people nationwide — meaning those who sleep in areas not meant for habitation, such as sidewalks, parks, cars and abandoned buildings, rather than in shelters — live in the Golden State, according to a new report on homelessness from the White House Council of Economic Advisers.

Unsheltered homeless people represent just over a third (35%) of the overall homeless population nationwide.

At the city level, four of the five cities with the highest rate of unsheltered homelessness are in California: San Francisco, Los Angeles, Santa Rosa and San Jose. Seattle joins the California municipalities in the top five.

The Trump administration may stage a federal intervention in California to address homelessness in the state.

As for state homelessness rates, the District of Columbia has the highest in the country, at 5.8 times the U.S. rate.

New York is next, followed by Hawaii, Oregon and California.

These five states together comprise 20% of the overall U.S. population but 45% of the country’s homeless population.



https://www.marketwatch.com/story/this-state-is-home-to-nearly-half-of-all-people-living-on-the-streets-in-the-us-2019-09-18

 

[T. A. Gardner]

but truthfully, a higher minimum wage is not what's devastating the American economy right now.

focus, people.

One of the bigger ones is government regulation..

Regulations and meeting them is costly:

This is another thing Biden has promised to create more of... Lots more of...

 

[Legion]

You continue to operate as if a pay raise happens in isolation and everything else will remain static. It won't.

He believes that nobody will be forced to raise prices (or cut labor costs) if the federal government mandates wage hikes, apparently.

 

[LV426]

Until you factor in other things you didn't consider.

YOU SAID they would end up with less, but that's not true at all. So you lied.

The taxes taken out are a percentage of pay. At 15,600 12% would be $1872 in taxes. At 31,200 they now pay $3744 in taxes

Right, but with the $15,600, they are left with $13,728, or 88% of their earnings.

With the $31,200, they are left with $27,456, or 88% of their earnings.

Now, is $13,278 > or < $27,456, and by how much?

hat's over simplified but it shows that more comes out.

SOPHISTRY ALERT.

Yes, $3744 > $1872, but $13,278 < $27,456.

So what you're doing is the very lazy approach by posturing gross numbers and retconning your argument around gross numbers.

But even the gross numbers show that raising the MW will result in up to a 100% increase in wages, and the tax rate stays the same (12%).

You are such a gigantic piece of shit for doing this.

Maybe the employer doubles the amount an employee has to pay in as their part for health insurance.

Ah, so now comes the argument for M4A, which is another piece of this. I agree that employers may try to do this, but that's why we need M4A so they don't.

M4A would save those businesses millions of dollars every year.

Or, the employer cuts hours.

Or the employee requests to have their hours cut, which creates demand for more employees because the other side of this that you are deliberately ignoring, is the increase in consumer spending that comes from up to doubling people's wages. You helpfully pointed that out for me when you articulated that the worker now has DOUBLE the wealth and income they had before the MW increase.

Again, it's up to a DOUBLING of the wage. From $15K/yr to $31K/yr. What are they going to spend that extra $15K on?

You continue to operate as if a pay raise happens in isolation and everything else will remain static.

So again, I have said that at least a dozen times that costs will nominally and/or incrementally go up, you just didn't acknowledge it because you are in the habit of sloppily and lazily responding to posts.

You were wrong about the tax rate thing...you're wrong about labor wage elasticity...you're wrong about increased consumption that comes from up to doubling someone's wages.

You deliberately leave things out of your posts because you know they undercut your arguments.

One of your tactics is to spam the board with bad faith links that don't actually prove your case.

 

[danielpalos]

So you say.

If that's the case, why is Calipornia (with a $14 hourly minimum wage) the nation's leader in income inequality, poverty, and homelessness?

Four of the five American cities with the greatest incidences of unsheltered homelessness are in the Beholden State



More than half a million people are homeless each night in the United States, a White House report found.

And nearly half of them are concentrated in one state: California.

All told, 47% of all unsheltered homeless people nationwide — meaning those who sleep in areas not meant for habitation, such as sidewalks, parks, cars and abandoned buildings, rather than in shelters — live in the Golden State, according to a new report on homelessness from the White House Council of Economic Advisers.

Unsheltered homeless people represent just over a third (35%) of the overall homeless population nationwide.

At the city level, four of the five cities with the highest rate of unsheltered homelessness are in California: San Francisco, Los Angeles, Santa Rosa and San Jose. Seattle joins the California municipalities in the top five.

The Trump administration may stage a federal intervention in California to address homelessness in the state.

As for state homelessness rates, the District of Columbia has the highest in the country, at 5.8 times the U.S. rate.

New York is next, followed by Hawaii, Oregon and California.

These five states together comprise 20% of the overall U.S. population but 45% of the country’s homeless population.



https://www.marketwatch.com/story/this-state-is-home-to-nearly-half-of-all-people-living-on-the-streets-in-the-us-2019-09-18

California has the largest economy in the US and nicer weather. It is not surprising the homeless come to California during the winter months.

I blame the income inequality on right wingers and their insistence on keeping the equivalent to historical black codes in our at-will employment States.

No firms should be allowed to leave the US for merely cheaper labor unless it includes cheaper pay for the CEO as well. Such firms should be tariffed the equivalent to the highest minimum wage in the land and used for social programs in the US.

 

[T. A. Gardner]

Right, but none of that actually proves raising the MW causes harm, and by cherry picking certain op-Eds, and ignoring others, you're now trying to backtrack on the arguments you made before, that I slammed down.

The Congressional Budget Office says raising it will have negative consequences. They aren't an "Op ed." That isn't "cherry picked," either.

Right, working fewer hours. Why is this a bad thing? Also, what you are deliberately leaving out is the job creation that comes from increased consumer spending.

None of your Op-Eds talk about that. That's by design.

Actually some of them do discuss that. But working fewer hours can be a bad thing. There is no guarantee that consumer spending will create jobs. They discuss that too. It's clear you didn't bother to read them.

So no, businesses aren't going to be dramatically affected in a negative way by this because of more consumer spending. So they will have to expand.

That's not what the 'experts' say. They say some won't be dramatically affected, others definitely will be harmed by this increase.