[lawnchair]

I wanted to get a feel from the peanut gallery here on the concept of minimum wages.

I know this is not the case in much of the country, but around here (smaller-town Kansas), you'll have a line out the door of reliable, literate, workers for near-backbreaking work at $7 an hour. With houses around $30-$40k (and taxes to match... trailers even cheaper), and some quite sparse living, a couple can survive, barely, on one steady full-time minimum-wage job ($15k per year) between them.

Yet, we have companies packing up and leaving the US. Latest that caught my eye was the York Peppermint Patty/Jolly Roger candy factory moving all production to Nuevo Leon.

Why Monterrey and not Parsons, KS? Obviously, in a 'global economy', $7/hr is too much to pay a guy.

We're approaching the desperate straits out here where plenty of people would work for less than that. Move into hot-bunked dorms and company-cafeteria meals if need be. People would do it. Illegals already do, which is why people hire them. (If you paid a gringo $4/hour under the table, there's a real chance he'd rat you out... far less with the illegal.)

So, what to do with the minimum wage? Obviously, I can see the intended point. And, like many, like the idea of a backstop, rather than racing the tin-shack pooping-in-gutters third world to the absolute bottom.

But, enforcing a minimum wage here, while undercutting it by wild free-trading with nations with much lower wages, is a hypocritical kick in the teeth for millions of 90-IQ Joe's in the US who, I'm sorry, are not going to become computer programmers or "outsourcing team managers".

Further, if we actually start seeing real deflation in the US, would there be the political will to actually lower the minimum wage? This seems doubtful. The most likely course to that 'lower living standard' we seem consigned to is to try for inflation, by hook crook or printing press, and not raise the minimum wage.

[jdmartin]

I like your post. The answer of course is to not have "free trade" with countries with vastly dissimilar standards of living, unless we accept the fact of living a much reduced standard of living in the US - and I don't just mean less flat screen tvs, I mean polluted water, eliminate worker protections, etc.

If you don't do that, of course your post makes sense, but really no company is moving to Mexico or China because of minimum wages. After all, most of the companies that moved were paying their labor far in excess of the minimum wage anyway. A couple of years ago minimum wage was still $5 an hour, and companies were still leaving in droves, because you can pay a Chinese worker 50 cents an hour, pollute his water, and send his effects home in a box with a $25 gift card to Wallyworld when he gets crushed on the factory floor.

If we're not willing to accept a society like that, then we can never beat these poorer nations in price. Ever.

[Byron100]

Here's some food for thought: Canada is fixing to raise its min wage to $10.25 an hour later this year. Western Europe already has minimum wages of $10 an hour or more. Meanwhile, we poor slobs here in the US are stuck at a min wage of $6.55 an hour, set to go up to a whopping $7.15 an hour this July. Woot!

Here's what I would do to fix this low-wage problem. Make a law that automatically dissolves any corporation that does so much as move one (1) job overseas, for any reason whatsoever. You have a company in the US, you employ US workers only.

Second thing I would do is to institute an incredibly massive crackdown on the employment of illegals. Any company found employing so much as one (1) illegal alien gets dissolved immediately, never to do business again. I would then implement a total moratorium on ALL immigration into the US until such time the GDP grows by 3% or more for four or more consecutive quarters. Then I'd start letting a few people in, just a few. As soon as economic growth slows below 3%, the borders get shut again.

Trade. I would immediately scrap all trading treaties with the rest of the world and institute a system of tariffs that's designed to take the place of the Federal income tax. So, naturally, all imported goods would be very, very expensive, oil included. But no more income tax! And of course, the US would quickly become an exporting nation again, with factories on American soil producing everything from blue jeans to TVs to children's toys to high-speed locomotives for a national passenger rail network.

After doing all of this (whew!), I would increase the min wage by one dollar each year until it reaches 75% of the average national wage (which would put it in the neighborhood of $12 an hour or so). Then, for each year following, the min wage would be adjusted up or down to keep in line with 75% of the national average.

And yes, I am a fool dreamer to come up with such crazy ideas...but, oh well...LOL.

[jasonraymondson]

And yes, I am a fool dreamer to come up with such crazy ideas...but, oh well...LOL.

I agree with you fool. But we are a nation of cowards who are afraid of being called racists, so we don't have the backbone.

On top of this, to many of our ultra rich + politicians who control the country have to much to lose if this were to happen. You can only control people if you keep them desperate and inslaved to a particular area and job. If you make them to desperate, or if you give them to much... then you lose control.

The view of those in charge of this country, is that if you keep people poor and desperate, then they have no will or ability to stand up to you. You can then rob them blind. It is a great scam. Of course, it is leading to the collapse of this country... but hey, they have bunkers and a military to kill you with.

[graham]

Here's some food for thought: Canada is fixing to raise its min wage to $10.25 an hour later this year. Western Europe already has minimum wages of $10 an hour or more. Meanwhile, we poor slobs here in the US are stuck at a min wage of $6.55 an hour, set to go up to a whopping $7.15 an hour this July. Woot!

Here's what I would do to fix this low-wage problem. Make a law that automatically dissolves any corporation that does so much as move one (1) job overseas, for any reason whatsoever. You have a company in the US, you employ US workers only.

Second thing I would do is to institute an incredibly massive crackdown on the employment of illegals. Any company found employing so much as one (1) illegal alien gets dissolved immediately, never to do business again. I would then implement a total moratorium on ALL immigration into the US until such time the GDP grows by 3% or more for four or more consecutive quarters. Then I'd start letting a few people in, just a few. As soon as economic growth slows below 3%, the borders get shut again.

Trade. I would immediately scrap all trading treaties with the rest of the world and institute a system of tariffs that's designed to take the place of the Federal income tax. So, naturally, all imported goods would be very, very expensive, oil included. But no more income tax! And of course, the US would quickly become an exporting nation again, with factories on American soil producing everything from blue jeans to TVs to children's toys to high-speed locomotives for a national passenger rail network.

After doing all of this (whew!), I would increase the min wage by one dollar each year until it reaches 75% of the average national wage (which would put it in the neighborhood of $12 an hour or so). Then, for each year following, the min wage would be adjusted up or down to keep in line with 75% of the national average.

And yes, I am a fool dreamer to come up with such crazy ideas...but, oh well...LOL.

I would like to add that minimum wage in the u.k. is around $8.30 p/h- factor in the higher cost of living here and you'll find we're far worse off. I agree with you in principle, though I would add that the wage discrepancies between developed and developing countries, are at least in part an artifact of fiat currency exchange rate mechanisms.

[Javaman]

Here's some food for thought: Canada is fixing to raise its min wage to $10.25 an hour later this year. Western Europe already has minimum wages of $10 an hour or more. Meanwhile, we poor slobs here in the US are stuck at a min wage of $6.55 an hour, set to go up to a whopping $7.15 an hour this July. Woot!

Here's what I would do to fix this low-wage problem. Make a law that automatically dissolves any corporation that does so much as move one (1) job overseas, for any reason whatsoever. You have a company in the US, you employ US workers only.

Second thing I would do is to institute an incredibly massive crackdown on the employment of illegals. Any company found employing so much as one (1) illegal alien gets dissolved immediately, never to do business again. I would then implement a total moratorium on ALL immigration into the US until such time the GDP grows by 3% or more for four or more consecutive quarters. Then I'd start letting a few people in, just a few. As soon as economic growth slows below 3%, the borders get shut again.

Trade. I would immediately scrap all trading treaties with the rest of the world and institute a system of tariffs that's designed to take the place of the Federal income tax. So, naturally, all imported goods would be very, very expensive, oil included. But no more income tax! And of course, the US would quickly become an exporting nation again, with factories on American soil producing everything from blue jeans to TVs to children's toys to high-speed locomotives for a national passenger rail network.

After doing all of this (whew!), I would increase the min wage by one dollar each year until it reaches 75% of the average national wage (which would put it in the neighborhood of $12 an hour or so). Then, for each year following, the min wage would be adjusted up or down to keep in line with 75% of the national average.

And yes, I am a fool dreamer to come up with such crazy ideas...but, oh well...LOL.

Of course shutting down those companies would also put its higher-paid employees out of work, without any certainty of their being able to find new jobs.

High tariffs would raise the cost of living in the US, and result in retaliatory tariffs that would reduce foreign demand for US goods and services, ultimately reducing the amount of money available for investments/job growth.

Do you want a job picking produce or sewing garments? Or do you just want a job that pays a lot of money?

[graham]

Here's some food for thought: Canada is fixing to raise its min wage to $10.25 an hour later this year. Western Europe already has minimum wages of $10 an hour or more. Meanwhile, we poor slobs here in the US are stuck at a min wage of $6.55 an hour, set to go up to a whopping $7.15 an hour this July. Woot!

Here's what I would do to fix this low-wage problem. Make a law that automatically dissolves any corporation that does so much as move one (1) job overseas, for any reason whatsoever. You have a company in the US, you employ US workers only.

Second thing I would do is to institute an incredibly massive crackdown on the employment of illegals. Any company found employing so much as one (1) illegal alien gets dissolved immediately, never to do business again. I would then implement a total moratorium on ALL immigration into the US until such time the GDP grows by 3% or more for four or more consecutive quarters. Then I'd start letting a few people in, just a few. As soon as economic growth slows below 3%, the borders get shut again.

Trade. I would immediately scrap all trading treaties with the rest of the world and institute a system of tariffs that's designed to take the place of the Federal income tax. So, naturally, all imported goods would be very, very expensive, oil included. But no more income tax! And of course, the US would quickly become an exporting nation again, with factories on American soil producing everything from blue jeans to TVs to children's toys to high-speed locomotives for a national passenger rail network.

After doing all of this (whew!), I would increase the min wage by one dollar each year until it reaches 75% of the average national wage (which would put it in the neighborhood of $12 an hour or so). Then, for each year following, the min wage would be adjusted up or down to keep in line with 75% of the national average.

And yes, I am a fool dreamer to come up with such crazy ideas...but, oh well...LOL.

Of course shutting down those companies would also put its higher-paid employees out of work, without any certainty of their being able to find new jobs.

High tariffs would raise the cost of living in the US, and result in retaliatory tariffs that would reduce foreign demand for US goods and services, ultimately reducing the amount of money available for investments/job growth.

Do you want a job picking produce or sewing garments? Or do you just want a job that pays a lot of money?

A universal standard for currency is what is required- equivalent to gold. Obviously the gold standard can no longer be implemented, but currency exchange rates are the problem here.

[lawnchair]

High tariffs would raise the cost of living in the US, and result in retaliatory tariffs that would reduce foreign demand for US goods and services.

From a net trade perspective, WHAT US goods and services?

We do agriculture pretty well. That employs a little over 1.5% of the population.

And? Um? What else do we do better here, that can't perfectly easily be done elsewhere for much, much cheaper?

People keep throwing out "but, but, Caterpillar". Caterpillar Inc has a majority of foreign workers, now. 20 of the last 20 factories they've opened have been in low-wage countries. They're gladly using this crisis to accelerate that process. The only reason they haven't re-incorporated in the Caymans already is due to state, federal, and military contracts with "buy American" provisions.

Do you want a job picking produce or sewing garments? Or do you just want a job that pays a lot of money?

I want a job that is reasonably useful to the human condition (both of those count, unlike money shuffling or waving guns at people) that pays enough for reasonable sustenance (of course that's desperately subjective... 7-9 modern-day dollars an hour works for me). And, if we have more than enough workers and technology for reasonable sustenance for all, I'd like that surplus translated into more free time to enjoy the half-million hours I have to enjoy my living.

If all nations had that same goal, then it would be fair to level the field globally. If they don't, it's going to have to happen in smaller areas, first.

[MisterB]

After doing all of this (whew!), I would increase the min wage by one dollar each year until it reaches 75% of the average national wage (which would put it in the neighborhood of $12 an hour or so). Then, for each year following, the min wage would be adjusted up or down to keep in line with 75% of the national average.

Would this not raise the average every year, making it an unreachable target. Could possibly have an inflationary effect.

How about a rule where the highest paid employee in a company could earn a maximum of X times the lowest paid.

[lawnchair]

How about a rule where the highest paid employee in a company could earn a maximum of X times the lowest paid.

An alternative to such rules would be more progressive taxation.

When getting multi-millions a year puts the top-end of those millions in the 90%+ tax bracket, people tend to strive a little less for them. Or, if they still want to count coup by megasalaries, it would largely go into the common Treasury.

This is not insane communism, by the way. This is Eisenhower Republicanism.

If that alone doesn't flatten the structure, then one considers the "negative income tax" or "social credit" models.

[bikerguy]

I can see the future, a four year degree to make $10/Hr. The future is so bright I have to wear shades.

[Byron100]

I can see the future, a four year degree to make $10/Hr. The future is so bright I have to wear shades.

The future? We have this problem now...lol. Seriously, the only good a 4- year degree does a person is if they continue on and get graduate degrees in a high-demand field. There are far too many folks out there with bachelor's degrees in relation to the number of middle-class level jobs that can be filled.

To tell you the truth, there just aren't enough jobs out there in proportion to the population, even at the lower levels of income. I think the best policy can be be pursued right now besides pushing out all the non-residents that shouldn't be here in the first place is to encourage those who don't need to work to stay at home. We need more one-income families instead of 2-incomers. Kids should be encouraged to stay at home with their parents for half of forever, parked in front of the TV and game console, urging moneyed people not to get work and so on - as this will cut down the supply of workers and "naturally" push up wages, especially if and when the economy recovers.

Promote laziness - create plenty of good, high-paying jobs! What a concept...hehe.

[Tyler_JC]

1. What makes you think that the rest of the world would still allow American exports into their country if we closed off our markets to imports?

We tried the beggar thy neighbor approach before. It lead to a Great Depression. Find me a modern autarky that is thriving and I'll show you my unicorn. Cutting yourself off from the world has historically been one of the ways that great powers destroy themselves.

Think about the Detroit automakers. Decades of competition free growth allowed them to become bloated and inefficient. When Japan showed up in the 1970s with cheaper and more efficient smaller cars, Detroit was unable to cope. They just couldn't innovate or compete. They were trapped in the 1950s mindset of bigger=better. Would America have been better off without Japanese imports? Well, would you have been better off driving a Datsun or a Chevy during the 1970s oil shocks?

2. What happens if Wal*Mart shelves empty out and there is nothing to replace them because Americans can't afford to buy the consumer products that they themselves would produce?

There are lots of products we simply cannot produce in the United States at prices that would allow American consumers to afford them. Posters have already commented that cheap tshirts put American workers out of a job because they can't compete with 50 cent/hour workers.

OK, so what would the tshirt cost with American labor? Would anyone be able to afford them? And if so, could they buy as many?

How many Americans would simply be cut out of the tshirt market rather than pay $30 for a "Made In America" tag.

You can't just turn back the clock.

[lawnchair]

To tell you the truth, there just aren't enough jobs out there in proportion to the population, even at the lower levels of income. I think the best policy can be be pursued right now is to encourage those who don't need to work to stay at home. We need more one-income families instead of 2-incomers.

Aye. And/or encourage 30-hour weeks. The biggest problem with that is what to do with a more-idle populace. Idle hands, devil's playthings and all. Would more prolefeed reality shows be enough? Or, are they enough only because people are already weakened after 50-hour weeks and hour-long commutes?

The first step to "useful unemployment" (Ivan Illich's term) in the US is fixing health care.

As I've mentioned, I have an uncle in near-NYC New Jersey. 55. He has steady union boilerman job. The job's actually pretty okay by him, but he hates Jersey with every fiber of his being. He's got the house he grew up in free and clear (owned my him and his brothers, after my grandma died). Paying more in property tax alone than my Kansas mortgage.

He's got a fair bit of savings. They could sell the house for quite a bit. He'd move to a cabin in Idaho and be a happy potheaded ski-bum for the rest of his life. Someone who needed the job could have it.

Except for one thing. Health insurance. He had a heart attack in his mid 40s. No one with health coverage is going to hire him. No one would cover him independently for even gobs of money.

So, he's stuck there. Damned stupid, ain't it?

[lawnchair]

We tried the beggar thy neighbor approach before. It lead to a Great Depression.

Smoot-Hawley, passed after the crash, lead to the Great Depression? While I'd agree Smoot-Hawley went *way* too far (hard to argue against that), the runup to the Great Depression was characterized by the most free-trade policy the country had ever known since its founding. There are levels in between absolute-Adam-Smith and Smoot-Hawley. As in, trade for natural advantages, but not for labor-treatment inequality.

If we go in for free trade ignoring labor inequality, we *must*, absolutely must, eliminate our worker protection and minimum wage laws. Otherwise, we've tied our hands behind our backs and made our workers overwhelmingly uncompetitive.

And if so, could they buy as many?

How many Americans would simply be cut out of the tshirt market rather than pay $30 for a "Made In America" tag.

We've got shiat coming out of our ears. Lots of middle-class Americans have literally *hundreds* of shirts. Notably more expensive shirts (and, let's be honest, you could get made-in-the-USA shirts for far less than $30), and people buying fewer of them, would not be the end of the world. It would, from any sane perspective of ecologic sustainability be a very, very good thing.

[Byron100]

There are lots of products we simply cannot produce in the United States at prices that would allow American consumers to afford them. Posters have already commented that cheap tshirts put American workers out of a job because they can't compete with 50 cent/hour workers.

OK, so what would the tshirt cost with American labor? Would anyone be able to afford them? And if so, could they buy as many?

How many Americans would simply be cut out of the tshirt market rather than pay $30 for a "Made In America" tag.

You can't just turn back the clock.

And what's so bad about being a low-consumption society? If things cost more, we just buy less of them. In light of this little something called Peak Oil, going the low-consumption route is pretty much the ONLY route available to us. It's funny how so many people tend to overlook this small detail...hehe.

We might as well push the burden of powerdown onto the exporting nations as much as possible, and make our nation as self-sufficient as possible as we ride the downslope of the post-peak era. If we shut off our imports today, the exporting nations are going to be hurt a LOT more than the US ever will, simply because we run massive trade deficits that sucks precious billions out of our economy each and every month. The reason the tariffs failed in the last Depression is because we were a exporter nation as opposed to a importer nation. So of course we stood to be hurt more in a trade war. This time it'd be different...it'll be the other nations that will feel the pain a whole lot more than the US, as they have a whole lot more to lose with their exports than we stand to lose with our own exports.

And exactly what is so bad about Americans buying products made in America? I'm not one of these flag-waving uber-patriots, but I do care enough about my own country to believe in this very basic ideal.

The mentality that some folks have today in regards to "globalism" and "free trade" is just beyond me, it really is...

[Javaman]

High tariffs would raise the cost of living in the US, and result in retaliatory tariffs that would reduce foreign demand for US goods and services.

From a net trade perspective, WHAT US goods and services?

We do agriculture pretty well. That employs a little over 1.5% of the population.

And? Um? What else do we do better here, that can't perfectly easily be done elsewhere for much, much cheaper?

People keep throwing out "but, but, Caterpillar". Caterpillar Inc has a majority of foreign workers, now. 20 of the last 20 factories they've opened have been in low-wage countries. They're gladly using this crisis to accelerate that process. The only reason they haven't re-incorporated in the Caymans already is due to state, federal, and military contracts with "buy American" provisions.

Do you want a job picking produce or sewing garments? Or do you just want a job that pays a lot of money?

I want a job that is reasonably useful to the human condition (both of those count, unlike money shuffling or waving guns at people) that pays enough for reasonable sustenance (of course that's desperately subjective... 7-9 modern-day dollars an hour works for me). And, if we have more than enough workers and technology for reasonable sustenance for all, I'd like that surplus translated into more free time to enjoy the half-million hours I have to enjoy my living.

If all nations had that same goal, then it would be fair to level the field globally. If they don't, it's going to have to happen in smaller areas, first.

The US has been running a trade deficit for decades but exports are still siginificant and provide some jobs:

http://www.census.gov/foreign-trade/sta ... c0000.html

For meaningful work one could become a teacher or a fireman and offer to work for $7 an hour.

[dorlomin]

I think that the loss of earning power in the manufacturing industries is the indirect cause of our current malaise. We covered it up with borrowing and service sector jobs. The people who took the manufacturing jobs in the global south have not the purchasing power to replace the factory workers in the west who lost their jobs.

It is controversial but I reckon the best way out of this catastrophe is for international minimum wages in certain key industries such as car manufacturing, hard rock mining, metal smelting and so on. This will be deeply unpopular with low cost markets as it will undermine there competitiveness and they will not want too loose the jobs, but I think they jobs lost can be replaced with service sector and manufacturing demand of the workers who remain but with good incomes. The jobs will also flow back west as the western high technology high wage factories become more competitive.

It will probably take a couple of years of pain before people are willing to listen to this kind of idea.

[Novus]

I like your post. The answer of course is to not have "free trade" with countries with vastly dissimilar standards of living, unless we accept the fact of living a much reduced standard of living in the US - and I don't just mean less flat screen tvs, I mean polluted water, eliminate worker protections, etc.

I like your answer. The problem is globalism not minimum wages. Globalism is nothing more than a form of neo-slavery to pit all the world's workers in a race to the bottom to make the pig men on Wall St. more money. The Solution has been to raise taxes on imported goods and higher taxes on un-earned wealth. Say this with me Protectionism is NOT a bad thing.