Here's a clip from a Senate hearing last week- your comments are welcome:
And here's an article from the Daily Mail about the banking crisis in Cyprus.
Your assignment here is to post one original post by Monday 25 March, and one response by Wednesday March 27. The response should be substantial, and not of the "Great job, Bob" variety. Also let's keep the discourse civil, shall we?
In response to the video:
ReplyDeleteIn this video, Elizabeth Warren makes an interesting point about minimum wage today. She says that based off of productivity increase, if minimum wage increased in response it would be around $22 today rather than $7.25. She asks the question where did the difference between the current minimum wage and what it could be go? Dr. Dube answers saying that top 1% incomes increased significantly over the same amount of time. As time has gone by the employers have benefited from increased productivity while only doling out the same amount of pay, so part of the difference has ended up with them in saved money. She also makes the point that the increase in minimum wage would have a very insignificant affect on the prices charged at businesses with minimum wage employees. However, I think that raising it right to $22 an hour would be a large change to make and one that would anger many employers despite the facts presented. So, not to make a huge stir but also to significantly benefit the minimum wage employees an increase to somewhere in between the now $7.25 and projected possible $22 is doable; maybe $11 or $12 an hour.
I agree that raising the minumum wage to $22 an hour over a short period of time would not be a good idea; however, I don't think that raising the minumum wage to $22 an hour over any period shorter than thirty or so years is a good idea. I don't understand the argument that a raise that large would not cause inflation, because I don't think it would just affect minimum wage workers. Right now, $22 an hour is not a bad wage. If the minimum wage were raised to that level, people who had been making twice minimum wage (about $20), because he or she had been producing twice as much as a minimum wage worker, would now expect to still make twice minimum wage ($44).
DeleteI agree that a slight raise in the minimum wage would be an added benefit to society and the economy. While they did mention that restaurants were included in this study of there's I wonder how many other minimum wage focused professions were included. The projected $22 an hour was based on productivity increases. With this same logic in mind does that mean that decreases in productivity will result in a decrease in the minimum wage?
ReplyDeleteHer logic seems to be that yes, a decrease in productivity would lead to a decreased minimum wage. But that really is not valid because a decreased minimum wage would give workers the incentive to do even less work, not to mention the minimum wage is already low as is.
DeleteAnother flaw with her reasoning is that the increased productivity is reflective of every part of the economy. Minimum wage exists as to not completely rip off some workers, but it also exists to give those who do the bare minimum work the bare minimum profit. Just because the some workers, who have made an increase in productivity, should have an increased wage, not all should be receiving $22 an hour. That's actually quite a lot of money, especially if someone's currently doing $7.25 an hour's worth of work.
Having watched the video for a third time now, I have to point out not just to you, but to all commenters, that Senator Warren's ultimate point is not to raise minimum wage to $22 dollars an hour but rather $10.10. This was established following her point about McDonald's, and something later specified in the article the video was initially embed within in the Huffington Post.
DeleteYour point regarding "other parts of the economy" seems to allude to things such as increases in technology and advancements in business models. For one, generally the technology made has been manufactured by those making minimum wage or even under. Therefore, their increase in production which has increased fellow minimum wage workers' production deserves a raise. Secondly, those who designed the technology and the business models have received raises (discussed briefly in the video and of greater extent in the Huffington Post article), so why shouldn't those making minimum wage for their increase in productivity?
Thirdly, your point about how $22 (which, again, is not the minimum wage Senator Warren actually proposes) is a great deal of money for those doing today's minimum wage level of work is faulty because it assumes that the minimum wage is properly reflected on the worker's productivity. This is disproved by the studies of Dr. Dube and by Senator Warren. Finally, it isn't really $7.25 because of government taxes which, in a lot of cases, are returned in some portion to the minimum wage worker. If you raise minimum wage and incentivize people to work at a lower level, it is possible to slash social programs and less money will be taken out of a minimum wage paycheck. This does two things: the worker gets more of the full amount they deserve to be paid (whereas before they may have been over- or under-subsidized by the government in social benefits) and it alleviates the government's welfare state concern.
(Elizabeth Warren video) I believe Senator Warren raises a good point that the issue of minimum wage has been swept under the rug. While of course her political agenda backs off from the aggressive stance she takes in the video, her reasons for minimum wage being raised (including worker productivity and an increase in salary in other positional categories) appear to be valid. Liberal or conservative, I believe raising minimum wage could be beneficial to the country. With a growing welfare state and progresses in the field of lower-level work remaining stagnant, there is very few incentives for lower class people to work. If the minimum wage were to be raised to over 10 dollars or even to the $11-12 range, people in theory should be more attracted to the work force. The only conundrum is, will Washington in turn slash social programs?
ReplyDeleteMax DeCataldo
ReplyDeleteSenator Warren's argument for an increase in minimum wage makes perfect sense, and it is difficult to find sound reasoning that go against it, both with numbers or just purely observation. Obviously, an immidiate increase to the $22 she mentioned would not work at all, but that isn't the point she was trying to make with that figure. She just wanted to point out how high it could be, had it been rising at the rate everything else has in the past 50 or so years. The man who ran a restaurant made a decent point by saying even a small (say $5) increase would effect him much more than it would McDonalds, which it would, because he didn't just run a production line type business. I understand his point that prices would have to be raised more, but he doesn't consider that, first of all, the increase wouldn't be very substantial (most likely less than a dollar), and also that he would have a larger target market to sell to with more people making more money, therefore able to pay for a nicer meal every once in a while, not just getting McDonalds. I also have personal experiece with this, working for minimum wage in a restaurant setting, and honestly i have many older co-workers that get the same pay as me, but live pay check to pay check, sometimes not even able to fill up their gas tank in order to get to work. I hear this first hand, and i have heard them after our boss telling them "pick up the pace" or "come on, put a little energy in today" mutter things under their breath to the effect of maybe they would care more if they got decent money for all their hard work. Elizabeth Warren makes a great point on this topic, and i just hope that wealthier politicians are able to see that a lot of people really need more money, and this proposition would help them more than it could potentially hurt others (which i firmly believe it won't).
Firstly, yay she can do the math! Very impressive Senator Warren. Now, all joking aside, it's clear that her argument was the strongest of the two parties. With every defensive counter from the restaurant owners, Warren was able to provide sound reason and simple facts that both strengthened her argument and refuted their claims. Although most of her argumentative strategy consisted of questions rather than proposals, the questions posed were reasonable. Raising minimum wage would not create an imbalance in the system--no substantial changes would be made to the point where corrections elsewhere would need to be made; so why, then, can it not be done? The price change would be as minuscule as cents and could not create a detrimental effect on the overall economy. The restaurant owners made excuses to this and hastily switched arguments in hopes to divert the questioning. The questions Warren asked clearly needed to be discussed, but however insightful and strong her argument was, Warren did not propose a plan that could get us to where she claims we should be. She's asking questions that she, herself, does not have the answers to. I'd like to see more plans and less unanswered questions.
ReplyDeleteGabe Phelan (Article)
ReplyDeleteRichard Littlejohn's article in The Daily Mail detailed the Cypriot banking crisis, and how it may effect Europe (namely Britain) in the not so distant future. The people of Cyprus have become enraged with the news that the government has plans of taxing (up to 10%) their savings account as part of a massive bailout program. Aside from the obvious fact that you shouldn't take people's life savings, I believe this creates two main issues. First of all, if enacted in Cyprus, other countries with democratic systems may begin to feel they have the right to do the same. As the article points out, if it has caused this much of a stir on the tiny island of Cyprus, imagine what would happen if a similar tax was initiated on the not so small island of Great Britain. I commend the British government for agreeing to reimburse the British soldiers stationed in Cyprus who have opened Cypriot accounts. The second and more interesting of the problems has to do with the Euro and the idea of a unified currency. In theory, it's great, and when Europe's economy is in good shape, nobody lifts a finger. But, when one country goes into a crisis, everyone else using the Euro feels the effects. Leaders are forced to scramble in an attempt to save the plummeting value of the Euro. In this case, it is suspected that the idea of taxing savings accounts came from Germany, where leaders were getting sick of doling out bailouts to the failing economies of Europe. A unified currency like the Euro intertwines the financial ties between nations even further, and promotes economic growth within Europe. But, it also drags countries into unwanted territory, leading to something like taxing savings accounts.
Elizabeth Warren made a lot of good points regarding the minimum wage. The most notable point being the idea that our minimum wage could be as high as $22, as opposed to the mere $7.25 that it is now. Obviously the economy could not sustain an increase in the minimum wage of $14.75 overnight, if at all, but I think an increase in the minimum wage would prove to beneficial. The most obvious argument against raising the minimum wage was addressed in the video and that would be restaurants having to increase their prices. I don't like the way Senator Warren seemed to assume that all restaurants, like McDonalds, would only have to raise their prices by four cents. This would obviously not be true of full service restaurants. They would have to rise their prices more, but it would not be as significant as the man who runs a full service restaurant tries to make it out to be. Also with a significant increase in the minimum wage, more people would be able to afford eating at restaurants. I think that an increase in the minimum wage would benefit a number of people in the short term and maybe even the overall economy over a longer time period.
ReplyDeletePrevious comments have mainly been on the side of Senator Warren, but I am not really sure which side makes more sense. It is difficult to believe that raising the minumum wage to $22 would have effects as insignificant as those indicated; the numbers probably don't come from nowhere, but from what I hear from my dad (who is basically a bureaucrat), politicians like to change models in order to get the results they prefer. However, if the numbers she presents reflect reality, this sounds like a pretty good deal. Also, having read The Grapes of Wrath (I apologize for the lack of italicization) I am definitely a supporter of the existence of a minumum wage. But the main problem for the characters in The Grapes of Wrath was that they couldn't find jobs at all, and when they did they were eventually willing to take wages that weren't even enough to keep them from starving. This doesn't mean they were being taken advantage of, because working for practically nothing is better than actually having nothing. Maybe a minimum wage would have helped them -- it would have driven up the price of all the fruit, so that it could be sold instead of left to rot. But maybe it wouldn't have, because there were so many people desperate for a job that they could probably have found some way to make themselves employable, even if it were by offering to be paid under the table for less than minimum wage.
ReplyDeleteI agree with you that a minimum wage is necessary and that in the most severe cases it might not help everyone, but I think in a general sense having a minimum wage is a good thing. I hadn't really considered that Senator Warren's numbers weren't accurate but that is an excellent point. Do you think, regardless of the numbers, that the country as a whole would benefit from raising the minimum wage? Or do you think this would create more problems?
DeleteWhile I believe that Senator Warren did make several good points, and her argument was stronger than the other sides. I would not say that the plan is perfect. Yes, minimum wage is low, and raising it to $22 does seem like a good idea in the short run. However, a point that crossed my mind while watching the video, and I think was neglected in both side's arguments, was how this was going to affect new employment. If minimum wage is raised, would it not be an incentive for companies (such as McDonald's) to hire less. Personally, while looking for a job right now, it is difficult as is, if companies are hiring less because they have to pay their current employees more, it will result in less jobs. However, that is just looking at something not particularly covered in the video that I was inquiring about. I am not entirely against raising minimum wage. Other posts have mentioned raising it by only a little, or over a longer period of time. Which I think would be more logical than to just suddenly raise it. All businesses are different (as mentioned in the video), bu business owners like to make a profit, and though the numbers she is throwing out are correct, I also believe that they can accumulate to cost the businesses more than it sounds.
ReplyDeleteYou raise an interesting point about the effects of this said increase on employment. Although I think your concern is valid, the point of the mentioned increase would be to benefit those people who are already employed in minimum wage jobs that have to support a family with such meager pay. Maybe this would require additional change to make up for lost employment but that becomes a whole new issue that could end up being corrected by the economy itself. But for now, I think the benefit to these families outweighs the possible cost you've bought up.
DeleteBlake Rowe:
ReplyDeleteI definitely have mixed feelings about this video. My first reaction is "raise the minimum wage!" which I would attribute to the fact that I am an 18 year old saving for college who is currently making minimum wage. But then I thought about it more. Senator Warren addresses the price changes that would occur in a global corporation like McDonald's, because Massachusetts is such a small subsection of their business, raising minimum wage here would not drastically affect prices. However, for a small business or a mom-and-pop family owned restaurant, I would arue that htere is no way that the minium wage can be raised so significantly with such small consecuences. I'm sure Senator Warren's figures are sound-but I am questioning the way in which this reasearch was done, and the parameters of the study because I find it to be nearly unbelievable. With this bein said, I believe that raising the minimum wage would be beneficial to a large amount of people, and I think I would be in support of it-but not by such drastic measures. More research has to be conducted before minimum wage can be raised so the subsequent effects on small business and the economy in general can be expected and accounted for.
Alli Tichy:
ReplyDeleteIn response to the Elizabeth Warren video, I have to agree that raising the minimum wage would have a postive outcome for the United States. Doing so would allow for people to support their families without relying on government welfare. They would have more money to buy nice things, and consequently this would stimulate the economy. However an immediate jump to $22-what senator Warren believes the minimum wage should be at-may do the opposite. Although, this would only raise McDonald's number 11 by 4 cents, I believe smaller businesses would be more greatly affected. They would have to raise thier prices more to compensate for the increased pay of their workers, and consequently get less business. If minimum wage is increased, it must be done gradually to be effective.