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The public policy blog of the American Enterprise Institute

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Discussion: (104 comments)

  1. The “Total 16 Years and Over” numbers are not quite so persuasive -and isn’t this group more relevant, since many teenagers are merely summer workers? ..and we go from data based on teens to discrediting “millions of adults struggling”…tenuous.

    1. We’re all struggling, Moe. Every American whose standard of living far exceeds the standard of living anywhere else in the world believes himself to be struggling. Not only do human beings have very little sense of proportion and skewed perspective, but struggle is just a natural part of human life. In America, even the poorest (and I was among the poorest) struggle not for necessities but for the things they wish to have.

      1. I can name a couple hundred in Washington that aren’t…public servants is what they used to be called.

      2. Walt Greenway

        Methinks: “In America, even the poorest (and I was among the poorest) struggle not for necessities but for the things they wish to have.”

        And what they see others have. I was raised by sharecroppers from Arkansas who grew up with no plumbing or electricty in a tin-roofed shack we would not call a house. They went through the Depression but were not personally depressed or considered themselves poor because no one else that they saw daily had anything either. Maybe being poor is worse when you see people everyday who are not, but I personally have never been what I would call poor to know.

        1. My dear Walt, are you seriously suggesting that people who have indoor plumbing, flat screen TV’s and cell phones are worse off and materially poorer than people with no plumbing or electricity simply because the former group lives amongst other people who also have diamond rings?

          In Egypt, the poor live in cemeteries. You suggest they are better off than people living in lavish section-8 housing in NYC?

          1. I don’t think that’s Walt’s point.

          2. Then what do you read Walt’s point to be, Moe?

          3. If everyone in the country lived in cardboard boxes nobody would consider themselves rich or poor – there’s no alternative to compare youself to. My grandparents lived through the depression and made the same comment to me. “We didn’t consider ourselves poor – everybody had nothing”.

          4. Walt Greenway

            Methinks,

            I’m simply suggesting it might be worse when you can see better around you. Part of being poor is feeling poor and my parents never felt poor. I don’t think we have ever had a better time for anyone in the U.S., rich or poor, than now. I doubt my thoughts make someone else feel better who has a lot less than I do.

            I think most people who struggle living day-to-day don’t care about people in Eqypt, poor or otherwise, any more than I cared about all the poor people in China who did not have enough to eat when I was growing up (I wish I had a doillar for every time my parents told me that to eat all the food on my plate).

          5. Walt Greenway

            Thanks Moe. You got it.

          6. That’s not what Walt said. He said: “Maybe being poor is worse when you see people everyday who are not.”

            Being around people who are materially better off than you are may make you feel bad about your material poverty because you happen to attach all sorts of meaning to material possessions, but your situation is in no meaningful sense worse than people who live in abject poverty surrounded by other people in similar abject poverty.

            You are not better off living in decrepit middle-class housing in Cairo because everyone around you lives in the same sagging decrepitude and some people live even worse in cemeteries. You are most definitely better off as a relatively poor person in the United States.

            When my sister-in-law came from Africa for a visit to NYC the first time she asked where the poor were. I took her to Harlem and showed her the projects. “No, I mean the poor.”, she said. She meant people who couldn’t afford shoes. I had none to show her. I visited Egypt a few months afterward and found that in the Metropolis of Cairo, the middle class couldn’t even imagine living in the luxury of some of the worst ghettos in the United States. They lived in appalling comparative poverty. Yet you want to say that they are materially better off than the people in American ghettos because many of their fellow Egyptians live in the same filth and decrepitude and many live worse? I don’t think so.

          7. Walt Greenway

            Methinks, it comes down to perspective. And part of the perspective of “poor” people (in the U.S.) leads them to either helplessness or motivation. I teach full time now in a farming community that has a lot of poor people, and I try to instill a sense of joining the affluent instead of being jealous of them.

            Arguments about how well they have it compared to someone overseas does not go over very well. I need to connect with them to help them.

          8. Arguments about how well they have it compared to someone overseas does not go over very well. I need to connect with them to help them.

            This is what you think I said? And you’re trying to help them. You need to help yourself first.

          9. morganovich

            moe-

            i’m not so sure that’s the right way to look at it.

            if you use relative wealth as a signifier of poverty, then there will always be poor people. this seems like it makes it a meaningless metric.

            for example, let’s imagine 2 countries. each has 2 types of people. one has folks with incomes of $40k and $100k. one has folks with incomes of $4k and $10k.

            using the “relative poverty” metric, these 2 places look the same. (they also have the same gini coefficient)

            but clearly, one country is much richer than the other.

            in fact, the poor in the first country are 4x richer than the rich in the other.

            this would seem to make this relative” metric of poor pretty fraught in terms of making meaningful comparisons.

            my grandparents did not consider themselves poor during the depression either, but they struggled to make ends meet and to do simple things like feed their kids.

            self reporting is notoriously unreliable around things like this.

            90% of people describe themselves as above average.

            clearly, they cannot all be right.

            many folks today who describe themselves as “poor” own cars, tv’s, cell phones, etc. they are not poor by an objective measure, especially by world standards. they just feel that way because they compare themselves to kardashians.

          10. Methinks: I think I understand where we diverge…
            How one “feels” in my mind is everything – reality takes a back seat sometimes to the games the mind plays.

            That being said, if a group of uber-rich Saudis had moved into depression-era Detroit, people would feel poorer – you are correct in their sitation had not changed one iota- their PERCEPTION of their situation had changed. That’s what we humans do. Perception is reality – reality takes a back seat sometimes to the games the mind plays.

            As an example; look at anorexia – there’s no mirror large enough or argument strong enough to keep sufferers from hurting or killing themselves.

          11. Moe, people’s individual crazy perceptions are not necessarily reality. I may perceive myself as an elegant 5’10’ supermodel, but that won’t change the fact that I’m 5’2″ and a bitch.

            Which life do you prefer?:

            A.) living an upper middle-class American lifestyle in a 5,000 square foot home packed with all the latest technology in a neighbourhood that is also home to a Saudi Billionaire?

            or

            B.) Living on the equivalent of a $1 per day in a neighbourhood where everyone else is living on $0.75 per day?

            You may have some worthless delusions of grandeur in scenario B, but your kids will still starve to death and you can’t really perceive your way out of that.

          12. “people’s individual crazy perceptions are not necessarily reality”

            I guess I respectfully disagree – people’s crazy pereceptions are what led to the dot.com boom, the dutch tulip craze, the Crusades – the effects of which were quite real, both to those who willfully participated and those who were victims. And for what it’s worth, I don’t think you’re a bitch.

          13. morganovich

            moe-

            “How one “feels” in my mind is everything – reality takes a back seat sometimes to the games the mind plays.”

            so, just to be clear, if you were too broke to feed yourself, you’d rather have me tell you how it’s not so bad and convince you how good you had it that give you a burger?

            alternately: if you have a nice house and are well fed with money in the bank and no financial worries, you are suddenly worse off if you meet me and i have a nicer house?

            if that is really “everyhting” to you, i suspect that’s a pretty tough way to live. you’ll never be happy or wealthy, just relatively poor. someone will always have more. i suppose you could just avoid all such people, but that seems like a very self limiting way to live.

          14. Methinks & Morganovich;

            I think you are reading more into my response than I intend, or I’m doing a poor job explaining myself…sorry.

            “Maybe being poor is worse when you see people everyday who are not.”
            – I see nothing wrong with this statement. When he says “worse” – he is not referencing a further decline in assets or anything tangible – he’s referencing “worse” as in how one would perceive the situation – one’s mental state.

            If I was living hand-to-mouth in a cardboard box amongst another ten other people living in the same conditions -I’d be poor.

            If I was living hand-to-mouth in a cardboard box amongst another ten other people living in MCMansions -I’d be poor, no poorer than the first scenerio. (So, here you two are bang-on!)

            But, I would really stick out wouldn’t I? Wouldn’t this, in turn, make me FEEL poorer? (this is where Walt’s point is valid in my mind)

          15. morganovich

            moe-

            “But, I would really stick out wouldn’t I? Wouldn’t this, in turn, make me FEEL poorer? (this is where Walt’s point is valid in my mind)”

            i get what you are saying, i just do not see it as relevant.

            if you are morbidly obese and meet some even fatter folks, you may feel skinnier, but tell it to your heart disease and diabetes.

            just because something makes you feel a certain way does not make it true.

            my neighbor just bought his second plane. while that might make me feel poorer, i am, actually, richer than i was last year.

            so what are we going to go with here, my increased financial security and ability to buy things or my feeling that i am poor because i do not even own one plane?

            i am fully cognizant that people tend to view their wealth in relative terms, i’m just not convinced that it’s a valid metric as opposed to a psychological flaw.

            this would seem to make whether i got richer or poorer last year dependent upon to whom i chose to compare myself as opposed to what happened to my actual buying power.

            i just do not see how such a metric would be of much use. it’s totally arbitrary and subjective.

          16. I’m pointing out a simple fact of human nature. That’s all. It is not wrong.

            It’s relevant because that is what was intended by Walt’s comment (before this thread became War and Peace).

          17. Moe!

            Okay, I totally see what you’re saying now.

            It occurs to me, however, that this feeling is more of an issue of being too different from everyone else. You would feel awkward if you were the richest person too. Or the fattest. Or if you were a Republican at Berkley.

            In Russia, we were wealthier than most. In America, we were much poorer for a long time. Personally, my self-worth was never affected by our material circumstances (although I was dying for some Calvin Klein jeans and those gross polyester knit Izod shirts when we first came to the U.S.). I never felt bad about being poorer than everyone else. I never judged people by the amount of money they had and it never occurred to me that I might be judged on that basis. In my profession, a high income is a measure of professional success, but not a measure of anything beyond that.

        2. I’m simply suggesting it might be worse when you can see better around you. Part of being poor is feeling poor and my parents never felt poor.

          Spoken like somebody who has never really been poor. No, Walt. Not being able to meet your basic needs – as in, not being able to feed or clothe yourself – is actual poverty. How you feel about yourself is a psychological issue for you to sort out with a professional. People who are actually impoverished don’t have time for that kind of navel gazing. You people just don’t know what poverty really is and that’s why you’re so happy to impoverish everyone so you can indulge your feelings
          about your own relative wealth.

          I think most people who struggle living day-to-day don’t care about people in Eqypt, poor or otherwise, any more than I cared about all the poor people in China who did not have enough to eat when I was growing up (I wish I had a doillar for every time my parents told me that to eat all the food on my plate).

          This is what you got from my post?

          Why do I bother?

          1. Walt Greenway

            Why do I bother?

            Do you want to listen to a perspective that is not the same as yours?

          2. Walt Greenway

            Methinks: You are defining poverty on your terms.

          3. Yeah, Walt. Let’s define poverty on your terms instead.

            If I have a 150 foot yacht and you can only allow yourself to purchase a 100 foot yacht, you’re poor. If you and I both live in a cardboard box, neither of us are poor. It’s so much worse to live with slightly fewer luxuries than it is to starve together.

            Genius.

          4. Walt Greenway

            I don’t want to define poverty on either my or your terms. I want to help people who think they are in poverty and will never get out of it. I’ve never had much success telling them how good they really have it in the U.S. Maybe that works for you because you have had the experience of abject poverty that I’ve not had.

          5. Yeah, yeah, Walt. I get it. You’re all about the people. Believe it or not, your intentions are not the issue here.

          6. morganovich

            actually, i think she has a point here walt.

            the truly poor do not even have the luxury to feel poor. they are too busy trying to feed themselves.

            consider the metric you are trying to apply here: if you are poor because you feel poor, then most of us are poor. this seems an absurd view of modern america.

            what if we applied a similar sort of metric to somehting else?

            are you tall if you feel tall? a great skier if you feel like one? are you a good singer if you feel like one?

            it seems that you are making a claim about a standard on poverty that i doubt you would accept in these other situations.

            it seems to me that it is you, not methinks that is defining poverty on your own terms and setting up a largely subjective personal standard for “poor”. i think the more conventional definition has to do with being able to meet your basic needs, not how you feel.

            it is not worse to have a house and a tv and a car but see a guy with a yacht than it is to live in a mud hut with no power but have it be the nicest mud hut in town.

            you seem to be trying to take envy and make it into a valid issue. saying that “hey it’s not a mud hut” does not go over well reveals a flaw in the audience, not in the poverty metric.

            your argument also seems inconsistent.

            on the one hand, you describe the effects of people feeling worse about relative wealth because of what they see around them, but on the other, you draw a very narrow box and say that they do not accept arguments about those who are more poor.

            maybe these folks are just irrational and envious. if so, i do not really see that as a wealth issue but rather a mental health one.

            it seems like you are trying to have it both ways here.

            i was one of the poorer kids at my high school, but i never felt poor even though my parents struggled and sacrificed to pay my way through.

            but, objectively to my peers there, i was poor. there’s no real question about that. this is true regardless of how i felt. but i did not want for food or clothing or basic necessities or even some luxuries.

            the fact that someone else in my position would have felt poor while i felt well off is precisely why you cannot meaningfully use such subjective measures of poverty.

            the fact that my grandparents were far poorer than most people who claim to be poor today yet never felt poor is a sign of their good character and the entitled narcissism of many today. (granted, not everyone, but the narcissism tests given to students are spiking off the charts. they feel poor because the got a VW not a porsche when they turned 16).

            that’s not a valid basis for establishing poverty and setting policy.

            http://www.foxnews.com/opinion/2013/01/08/are-raising-generation-deluded-narcissists/

            us students are far more likely to describe themselves as “gifted writers” than in the past. yet their objective tests scores are dropping like a rock.

            this comes back to the “are you a good writer because you feel you are”? issue.

            my answer is no, you are not.

            if feelings of poverty are being driven by entitlement and narcissism, then that’s not an economic problem. it’s a psychological one.

          7. morganovich

            walt-

            ““feeling poor is not the same as feeling hopeless.”

            For some it is.”

            i don’t think so. the two are separate issues. you can feel hopeless and poor, but feeling one does not require the other.

            the fact that one CAN feel both says nothing about whether one MUST.

          8. morganovich

            “my immediate family was better off in relative poverty in the United States than my aunt was starving to death with the rest of Moscow.”

            this raises an interesting point:

            if relative wealth is so much more important than absolute wealth, then why are there so many poor immigrants desperate to get into the US where they will be relatively poorer than they were at home?

          9. if relative wealth is so much more important than absolute wealth, then why are there so many poor immigrants desperate to get into the US where they will be relatively poorer than they were at home?

            The same thought occurred to me. Also, why the hell are we so worried about abject poverty in Africa. They’re all living in abject poverty together, after all.

            And since when has wealth been defined as only material wealth? What about the people who are smarter than me? Taller than me (especially those sons of bitches because that’s practically EVERYONE with the exception of very young children)? Prettier than me (also an annoyingly large group). People with nicer parents and closer families? Life is so damn tough.

          10. ““feeling poor is not the same as feeling hopeless.”

            Cry me a river.

            These people have no idea what true hardship is. Tell them to get over themselves and either do something about it or open another bag of Doritos and flip on the telly and quit their whining.

            This coddling is ridiculous.

            I know, I know. You’re hired to make these people feel better about themselves. And I bet they’re not the ones paying for it either.

          11. Sorry, I didn’t capture the whole quote I intended to capture above. I was responding to Walt’s response to morganovich that “for some people it is”.

            Ugh.

          12. Walt Greenway

            There is a lot of good advice here from many smart and very successful people You should use the teaching and advising strategy that works for you. I’ve found telling students who have three kids and a combined household income of less than $20,000 per year that are not poor does not get their attention. If you can’t get their attention, you are not effective. I’ll continue showing them the way out of their mess by teaching them a skill that gives them increased earning capability and confidence instead of telling them they are not in a mess because other people have it worse. People who felt beat down are often their worst enemy trying to get a job, so feeling poor can perpetuate that condition. Whether they actually meet anyone else’s definition of poor is not relevant to them or useful in changing their self-defeating life choices. Thanks for your insightful comments and advice.

          13. Lead the way, Moses. Don’t forget to part the sea.

          14. Walt Greenway

            Just like the writing on bathroom walls, the anonymity and insolence here seem to go together quite well.

          15. Yeah, but it still doesn’t even begin to compare to the Saviour Complexes around here.

          16. Walt Greenway

            Nope, not a Savior of any sort. I’m just someone who does the best he can and is not afraid to own up to what he says. If you are ever in mid-Michigan, Methinks, you’re welcome to spread your wisdom in my classroom as a guest speaker, and I am serious because you have a lot to offer, but you will have to use your real name.My program

        3. Walt

          I was raised by sharecroppers from Arkansas…

          You forgot to mention that you walked five miles to school every day, barefoot, in the snow, and it was uphill both ways.

          1. Walt Greenway

            I already said, I had it good. I rode a warm bus to school.

          2. Walt Greenway

            Methinks: I was raised in Michigan because my parents left Arkansas for a better life. They could envision a better life partly because they never felt “poor” or the helpless mindset that often goes with a feeling of being poor.

          3. Oh, goody! We just changed the subject! Isn’t it fun to pretend we were talking about something else?

            I bet I was even poorer than your parents and I felt poor. I wanted to get rich. So, I did. Being poor relative to the other people in the college town I finished growing up in did not make me feel helpless. It made me feel like I needed to get off my ass and do something about it. If I didn’t feel poor, I wouldn’t have worked so hard. Why the hell would anyone expend the enormous energy necessary to obtain material wealth if they didn’t feel materially poor?

          4. And, hey, you know what, Walt? Funny thing….my immediate family was better off in relative poverty in the United States than my aunt was starving to death with the rest of Moscow. And I’m betting you’re still going to think this is an intercontinental poverty comparison!

          5. morganovich

            methinks-

            yup. need is a helluva motivator.

            there is nothing like worrying about how you are going to make rent and buy groceries to get you off your tuchus and keep you determined to get out of that hole and never go back.

            feeling poor is not the same as feeling hopeless.

          6. Walt Greenway

            “feeling poor is not the same as feeling hopeless.”

            For some it is.

          7. Walt

            I was raised in Michigan because my parents left Arkansas for a better life. They could envision a better life partly because they never felt “poor” or the helpless mindset that often goes with a feeling of being poor.

            Your parents moved to MI because they wanted more than they had. Everyone wants more than they have. that’s human nature. Therefore, everyone “struggles” to have more.

            Whether people label themselves as “poor” is not the issue. Envying one’s neighbor and calling oneself “poor” is a personal problem, not an actual condition.

            I suspect that those you deal with who consider themselves poor and helpless are those who don’t want to take responsibility for their own condition, and prefer to blame others. You can usually tell by the things they loudly complain about, like big bonuses for fat cats on Wall street, congressman’s perks and benefits, their heartless employer, and other nonsense like that.

            I’m sure they feel much better after you explain how well you’ve managed your own financial life, and what a good investor you are, as you do here.

          8. morganovich

            what if we applied a similar sort of metric to somehting else?

            are you tall if you feel tall? a great skier if you feel like one? are you a good singer if you feel like one?

            All those things are possible after several drinks.

          9. Right you are, Morganovich. Feeling helpless and hopeless is what happens after a country regulates every opportunity to rise above abject poverty out of existence. THEN you begin to feel helpless and hopeless, leading to alcoholism (common in Russia) or even self-immolation.

            That there is objective poverty you can’t perceive your way out of.

          10. All those things are possible after several drinks.

            After several drinks I actually start being nice to people.

            …and they say there’s no such thing as miracles….

          11. After several drinks I actually start being nice to people.

            WHAT!! Wait a minute while I clean my glasses. :)

          12. morganovich

            ron-

            “All those things are possible after several drinks.”

            i fear tequila only makes you THINK you are a great dancer.

            i suspect a videotape the next day might inject some reality…

          13. morganovich

            i fear tequila only makes you THINK you are a great dancer.

            i suspect a videotape the next day might inject some reality…

            No thanks. Reality is for people who can’t hold their liquor. :)

  2. PeakTrader

    “More than 3 million (3.037 million) teenagers, and more than three out of every four (77.2%) were earning an hourly wage higher than the legally-mandated minimum wage.”

    Yes, there are many “lucky” teens earning more than $7.25, e.g. $8.

    1. *face-palm*

    2. Many of my friends were the 3 million earning minimum wage back in 2001, myself included. Now they are doctors, optometrists, lawyers, engineers, pharmacists, designers, investment professionals, etc… They all earn significantly more than minimum wage.

      1. PeakTrader

        Average student loan debt nears $27,000
        October 18, 2012

        “Two-thirds of the class of 2011 held student loans upon graduation, and the average borrower owed $26,600, according to a report from the Institute for College Access & Success’ Project on Student Debt.

        Those without a college degree are more than twice as likely to end up without jobs, however. The unemployment rate for recent high school graduates was 19.1% last year.”

        1. Mark’s data regarding the the 3 million teens were from 2001. From that same data set, they tracked wages up until today, which is more than the minimum wage they earned in 2001.

          You cited data about recent college graduates and high school graduates from 2012. Its comparing apples and oranges.

      1. PeakTrader

        Everything is fine. There’s no problem.

  3. SeattleSam

    The average household income (at least in 2005) of those earning the minimum wage was $50,000.

    1. Its Gsatt

      This stat doesn’t sound feasible

      They were obviously making more than minimum wage. Sorry, but I’m a little over min. wage (at one of my jobs) and my w-2 is half of this average. Granted I don’t get much overtime, but seriously? 50k? those are 60+ hr weeks all year round to hit that with minimum wage if its even possible. My friend installs cable at 18/hr. and barely touches 50k working as much overtime and nailing as many sales bonuses as possible.

      1. Its Gsatt

        crap the keyword was household….. combined incomes…. yeah so maybe they could get close to that. but the average? pushing it.

        1. morganovich

          gsaat.

          i think you are correct about the household figure, but may be thinking about it the wrong way.

          certainly, if we take $7.25 an hour even at 50 hour weeks and 50 weeks a year, we get to only $18k. even 2 earners would not get close to $50k.

          this suggests 3 possibilities to me:

          1. that many minimum wage earners live with their parents and the parent’s higher income increases the average.

          this seems like the likely case for many.

          2. such earners tend to live in large groups of 3-4 as i remember doing during summers in college.

          3. many minimum wage earners are also paid other money. i used to wait tables and tend bar in the summers. we were paid far less than min wage per hour. (this used to be legal due to tips calculations. i’m not sure it still is.)

          all the income basically came from tips. many times, my actual check would literally be for less than $20. it all went to pay FICA etc on both wages and assumed tips.

          all this stuff can skew data. the figure he cites may be true, but that dos not mean you can earn $50k at min wage.

          1. Its Gsatt

            Very true. I tend to the bar as well. Although claiming tips is still voluntary, you just have to make sure you at least look like you’re making minimum wage. I know all about those $20 checks.

            And I didn’t think about those living with their parents. that would surly skew the figure. Or a spouse that is providing a second income in the minimum wage area

  4. Are you challenging the progressive narrative?

  5. How about some facts?

    1.7 million workers out of 73.9 make the minimum wage, that’s 2% of the hourly workforce

    50% of the minimum wage workers are under the age of 25

    23% of teens employed by the hour make minimum wage, less than 3% of workers over 25 and over make minimum wages

    For workers over 16 years old 11% didn’t graduate from HS versus 5% who did

    Never married workers at 9% earn MW versus 2% of married workers

    13% of part time workers make MW versus 2% of full time

    The number of workers earning MW declined form 6% in 2010 to 5.2% in 2011.

    1. PeakTrader

      How about some more facts:

      STUDY: One In Four Private Sector Workers Earn Less Than $10 An Hour
      Jul 24, 2012

      “More than a quarter of America’s private sector workers make less than $10 an hour, according to a report released this month by the National Employment Law Project.

      Worse yet, the share of low-wage jobs is increasing…grown faster than total employment…Two-thirds of America’s low-wage workers are employed by corporations with more than 100 employees.”

      1. Fine, but you’re moving the goal posts. isn’t this about minimum wage?

        However, just off the top of my head I’m thinking that since manufacturing jobs are declining most unskilled workers are now in service industry or retail jobs which are low paying for a reason.

        1. Peak doesn’t know which way demand curves slope. He also thinks that if an employee’s skills are on par with that of a potted plant, he should for some reason be paid a multiple of that and Peak’s math skills are so poor he thinks that can happen. And he’s willing to post excerpts from dozens of irrelevant articles to exhaust you into agreeing.

          1. morganovich

            worse, he thinks that if you raise wages by fiat as opposed to in response to greater value creation/productivity it can generate prosperity and does not increase prices, decrease hiring, and reduce the profits used for investment.

            if you have a shoe store and are not able to sell enough shoes, you drop your prices. but if you have a labor market, somehow increasing prices magically increases output and the demand for labor.

            the demand curves for labor slope the same way as every other good or service.

            increase price and quantity demanded falls.

            we can always find “all else is not equal” examples that mask this fact (like periods of huge productivity growth that happen to coincide with min wage hikes) but these demonstrate nothing but economic myopia.

            claiming that they demonstrate that higher wages increase the demand for labor and grow GDP is like claiming that the brakes on your bike make you go faster when you use them by ignoring the fact that you are going down a hill.

          2. John Dewey

            “to exhaust you into agreeing.”

            Well, that may be his goal. But I think the posting irrelevant articles really just causes others to lower their assessment of his value.

          3. John Dewey,

            I stand corrected. I amend my original statement: “In a long series of tireless attempts to exhaust you into abandoning all reason and agreeing with him”.

      2. OK peak, pseudo benny why either of YOU don’t set up a company and hire a bunch of folks and pay that (ha! ha!) living wage?

        1. Thanks juandos, a good read.

      3. chuck martel

        When the sun comes up in the morning, it’s a fact. When a plane from Miami lands at O’Hare, its a fact. When I kiss the neighbor’s wife, it’s a fact. There’s nothing factual about statistical cake frosting like “More than a quarter of America’s private sector workers make less than $10 an hour” or “Two-thirds of America’s low-wage workers are employed by corporations with more than 100 employees.”

  6. Pepe Snead

    It would be interesting to see the effect of the minimum wage on teen unemployment. At first glance, I thought 25% is a rather small fraction of the teen population and therefore the federal minimum wage isn’t causing too much unemployment. However, depending on the wage distribution (e.g., if it were skewed bimodal) there could still be a significant proportion of teens unemployable because of the law.

  7. Benjamin Cole

    Adjusted of inflation, the minimum wage has fallen 30 percent since 1968, from about an inflation-adjusted $10.51 back then to $7.25 now.

    However, the percentage of workers receiving the minimum has fallen radically, from about 15 percent of the workforce in 1980 to under 3 percent now.

    This suggests the federal minimum wage is well below what the free market has as a minimum anyway. We basically have free markets for wages, and that is probably good.

    My experience, in Los Angeles, up through 2012, was that you had to pay $10 an hour cash to get anybody who would show up for two days in a row for most production work. So the real minimum wage was $10 an hour cash.

    We do not have free markets for the wages and pensions of federal workers, including those in the military.

    That is an area to look also for radical reductions, especially in pensions and medical benefits.

    The minimum wage for civilian workers has basically become a non-issue.

    1. John Dewey

      Benjamin: “This suggests the federal minimum wage is well below what the free market has as a minimum anyway. ”

      Not to me. If you have some statistics about how many teenagers and young adults cannot find any work at all, that may tell us much more about whether workers are priced out of the market. If you have some statistics about how many low wage jobs have been automated – jobs which could have gone to those young unemployed workers – such statistics may tell us something about the free market in wages for the unskilled. I don’t have those statistics. But I do know that unemployment among the unskilled is much higher than unemployment among the skilled.

      Also, the free market in wages can only work if government does not distort that market. However, extended unemployment benefits, food stamps, and other transfers sharply distort the free market for unskilled labor.

      Benjamin: “We basically have free markets for wages”

      Surely you do not believe this. Do you really believe that all the federal and state regulations and fees forced on employers have no effect on the market for wages?

    2. Wait a minute…if 3% of workers make the federal minimum of $7.25.hr, how can that amount be “well below” the minimum employers would pay in a free market?

  8. I don’t see that one has anything to do with another. The question is whether a job that does not pay enough to live on is really a job.

    1. morganovich

      actually, no, that is not the question at all.

      the question is why we would want to give you or government the ability to make that determination for everyone as opposed to allowing them to make their own choices.

      the other question is why, if wages are artificially held at a high level, would employers hire for $10 an hour someone who only produces output worth $8 and why that would not cause people who would otherwise happily take jobs to be legislated into unemployment.

    2. Its Gsatt

      It all depends on the life of the person willing to work this job you speak of. By no means is anyone forced to work that job. It is VOLUNTARY. A 12 year old may find a low wage great, they have no bills.

    3. SeattleSam

      Of course it’s a job. My first job paid me 95 cents an hour. I was 16. It was really a job. And you know what? If someone had forced my employer to pay more for that position, I wouldn’t have gotten it. They would have hired someone with some job experience.

    4. Of course you’re you’re right Hydra. It’s not a job. I earn a lot of money and I don’t consider what I do a job because I’m unwilling to make the trade-offs necessary to pay the million dollar annual maintenance on my private jet. And, really, how can one claim to have a proper life if one does not own a private jet? It is a necessity and a right. Like modern health care. Thus, I cannot say I make a living. By definition.

      All the dictionaries disagree with us, of course. The fools have “job” defined as (among other things) “a post of employment”. Not a word about wage rate or what constitutes “a living”.

      1. The poverty wage which I assume could also be a proxy for a “living wage,’ for a single person is $11.344.00 a year. A minimum wage worker who works a 40 hour week earns $16,120.00 annually. How can there be any poverty in America???

        http://www.npc.umich.edu/poverty/

        1. Rick, “living” is one of those ill-defined terms like “hope n’ change.”

          As demonstrated by our ancestors and people in, say, parts of Africa, human beings can live on very little. Modern medicine, electricity, automobiles, phones and all the other luxuries of life have not existed for the overwhelming majority of human history. To live, in the narrow sense of the word, you need only food, water and some rudimentary shelter.

          Every single person in the United States enjoys a standard of living well above that. But, the living wage advocates believe that they have the magic formula for the materially perfect life and they can impose this on the entire world. I would not be surprised if they all suddenly decided that by the same magic they can fly and all jump off a cliff.

          1. ” I would not be surprised if they all suddenly decided that by the same magic they can fly and all jump off a cliff.”

            Oh, if they only would!

    5. The question is whether a job that does not pay enough to live on is really a job.

      What does “live on” mean to you?

    6. Actually, I think the problem can be found in your first sentence:

      I don’t see that one has anything to do with another.

  9. PeakTrader

    I would’ve liked to see Methinks & Morganovich in one of my grad econ or math classes for a couple of laughs.

    1. Oh, Peak. I wouldn’t have laughed at your inability to do either. To your face.

      BTW, it appears that getting into graduate school seems to be your biggest accomplishment in life, seeing as you’re always prattling on about that in your desperate attempts to assert superiority. Is this as much as you’ve managed in your life?

      1. PeakTrader

        You would’ve cried in grad econ or math.

        I wouldn’t say anything about my econ and math accomplishments to anyone who understood econ and math.

        They would just know.

        Anyway, I hardly said anything about those, and other, accomplishments.

        1. They would know you still can’t understand which way demand curves slope and that opportunity cost is a deep mystery for you.

        2. John Dewey

          Peak Trader,

          I do have an undergraduate degree in mathematics and a graduate degree in finance from an Ivy League school. I’m positive that Methinks would have made an excellent contribution to the level of discourse at Wharton. I would not make that assertion about very many people.

          1. John, thank you. Sincerely. Coming from you, that means a lot to me.

  10. PeakTrader

    No problem:

    California Poverty Rate Highest In Nation Based On New Census Department Figures
    11/15/2012

    “California has a poverty rate of 23.5 percent, the highest of any state in the country.

    “We’re seeing a very slow recovery [nationally], with increases in poverty among workers due to more new jobs which are low-wage,” University of Wisconsin-Madison economist Timothy Smeeding told the Associated Press. “As a whole, the safety net is holding many people up, while California is struggling more because it’s relatively harder there to qualify for food stamps and other benefits.””

    1. If you change the definition of “poverty”, 75% of Californians can fall below the “poverty” line. Did they teach you that any of those graduate math classes?

      1. PeakTrader

        You mean like not being able to pay rent, buy food, gasoline, etc.?

        1. I see your point, Peak. There’s not a lot left over for rent and food after you get hydraulics added to your car so it can dance, the 80″ 3-D TV, the three cell phones, ipad, premium subscription for high-speed internet, botox and the taxes the state imposes on all of that. I really don’t know how people survive.

          1. Its Gsatt

            My girlfriend cant afford to fill her H3 right now, y’all need to send her poor ass a check. And I need help paying for my flight instructor license so I can join the middle class. PAY UP you wealthy scumbags.

  11. This article takes only that teen agers are working in fast food. If you looked at the employees working there YOU could see many of them are adults, working for minimum wages + since they ( many with college degrees ) can’t find any other employment. TELL the whole story.
    Why do you think Obama gives workers extended benefits. It helps the economy. because it get spent immediately !

  12. Most of the respondents in this blog are up the ladder from poverty. A minumum wage worker most probably doesn’t get 40 hours a week nor any benefits as you are getting. I grew up during the depression. but didn’t consider myself living poor. Our neighbors were much better of than us and it never concerned us us that we had less. In the 50’s with a tech job I was paid $2.65 hr, Bell guys made less than me.
    Opponents of increased wages claim it will lead to less jobs. It hasn”t Can McDonalds managers handle all the work these people do, if they rid those workers ? Their profits would dwindle. Those 25 cent burgers now cost
    $5,00

    I wonder whether some high earners could qualify to do the work these low paid workers are doing. A PHD that can’t find a JOB and is working for minumum wage is POOR. Remember, these low paid workers pay the same money for groceries, $3.85 ( FEB 2013) a gal at the gas pump and sales tax as you do..

  13. Are those 16y olds have social security? In greece the minimum for under 25 yo is 300E per month…

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