Minimum wage is a pretty bad policy. You should probably go ready why. Don't count Ron Paul out just because you don't understand why his idea is a good one.
From what i've researched... most economists believe that minimum wage laws cause unnecessary hardship for the very people they are supposed to help. Which they do...
Here....go read some articles on it.
The Minimum Wage: Good Intentions, Bad Results | The Freeman | Ideas On Liberty
Articles & Commentary
Raising the Minimum Wage Is Bad for the Poor and for Business Owners - Vote Down Issue 2 on Nov. 7 | Right Remedy
BalancedPolitics.org - Minimum Wage (Pros & Cons, Arguments For and Against, Advantages & Disadvantages) (this is a good one)
Hell.....just Google "Why minimum wage is bad".... Read the articles...some have proven studies of why minimum wage is a horrible idea. If you still think it should be raised, then you still don't understand.
- The vast majority of economists believe the minimum wage law costs the economy thousands of jobs.
- Teenagers, workers in training, college students, interns, and part-time workers all have their options and opportunities limited by the minimum wage.
- A low-paying job remains an entry point for those with few marketable skills.
- Abolishing the minimum wage will allow businesses to achieve greater efficiency and lower prices.
- When you force American companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign workers, where labor is much cheaper.
- Non-profit charitable organizations are hurt by the minimum wage.
- The minimum wage can drive some small companies out of business.
- A minimum wage gives businesses an additional incentive to mechanize duties previously held by humans.
- Cost-of-living differences in various areas of the country make a universal minimum wage difficult to set.
- Elimination of the minimum wage would mean more citizens and fewer illegals would be hired for low-pay hourly jobs, leading to greater tax revenues and less incentive for illegal immigration.
- The minimum wage creates a competitive advantage for foreign companies, providing yet another obstacle in the ability of American companies to compete globally.
- The minimum wage law is just another example of government condescendingly controlling our actions and destroying personal choice. Citizens do have the ability to say no to a lower wage.
In 2009, thanks in large part to a higher minimum wage, brought the national
teenage unemployment rate soaring--over 25%!
Looks like a bad policy to me...
Also when i say by the constitution I mean more or less for liberty and freedom. A lot of policies/regulations cross that line and cost this nation hardship.....minimum wage being one of those policies.
Global Wage Report 2008 / 09
Minimum wages and collective bargaining
Towards policy coherence
http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_100786.pdf
Page 59:
Summary (It was to long to cut & paste the entire thing)
"Altogether this report has presented a rather disappointing picture for wage earners, despite an apparently favourable economic context. Over the period 2001???07, inflation was low and the global economy grew at 4.0 per cent per year in real terms. The growth in wages, however, lagged behind overall economic performance. According to our estimates, real wages only grew by an estimated 1.9 per cent during 2001???07, notwithstanding
the impressive recovery in some current and former transitions countries. For the countries included in our sample, we found that over the period 1995???2007, each additional 1 per cent in the annual growth of GDP per capita only led, on average, to a 0.75 per cent increase in the annual growth of wages. There are some preliminary indications that this wage elasticity (the responsiveness of wage increases to changes in GDP growth) has further weakened in recent years. These trends occurred in a context
of growing economic integration, characterized by the increasing international movement of people, goods, services and capital.
The slow growth in wages was accompanied by a decline in the share of GDP
distributed to wages compared with profi ts. We estimate that every additional 1 per cent of annual growth of GDP has been associated on average with a 0.05 per cent decrease in the wage share. We also found that the wage share has declined faster in countries with a higher openness to international trade, possibly because openness places a lid on
wage demands based on a fear of losing jobs to imports. Inequality among workers has also increased. Overall, more than two-thirds of the countries included in our sample experienced increases in wage inequality. This was both because top wages took off in some countries and because bottom wages fell relative to median wages in many other countries. The wage gap between women and men is also still high and is closing only very slowly. This is disappointing in the light of women???s recent educational achievements
and the progressive closing of the gender gap in work experience."
ILO Global Wage Report 2010
http://www.ilo.org/wcmsp5/groups/pu...m/@publ/documents/publication/wcms_145265.pdf
Page 34:
While there is a global trend of increasing low-pay employment, the incidence
of low-wage employment shows considerable variation across countries. The latest national estimates of low-wage incidence are provided in figure 21. While some countries provide estimates that refer to all wage earners, others restrict the sample to fulltime employees. It is known that the estimates which exclude part-time employment tend to underestimate the scale of low-wage employment, because part-time workers often receive lower hourly earnings in comparison to their full-time counterparts. For this reason, the estimates are grouped separately to allow more meaningful comparisons. When only full-time workers are considered, the incidence of low-wage employment varies from about 6 per cent in Sweden to about 25 per cent in the United States or in the Republic of Korea. The size of variations is even larger in the case of the estimates for all wage employment, which includes a number of developing countries. In some countries, such as Austria, Honduras or Panama, at least one out of three employees is in a low-paid job. In Finland, by contrast, low wages affect only about 5 per cent of employees.
Page 74:
"One of the key concerns about low pay, especially in terms of its welfare implications, is the risk that low-wage work will lead to poverty, in spite of a person being employed and working. The relationship between poverty and low pay is not straightforward, primarily due to the different definitions and the resulting differences in measurements. As already pointed out, low pay is concerned with an individual???s gross wage earnings, while poverty is typically related to the net disposable income of a household, adjusted for the size and composition of the household. 98 For this reason, low-paid
workers (such as young labour market entrants who are living with their parents) may not be poor, particularly when they belong to higher-income households with multiple jobholders. Conversely, high-paid workers (such as heads of household) can be poor if they are the only breadwinner in a big family with many dependants. Despite these conceptual differences, however, it is clear that low pay increases the probability of poverty. The risk of ???in-work poverty??? is illustrated in table 8, which provides estimates of poverty rates by pay level and employment status in China, where
there has been much debate about the impact of high economic growth on poverty reduction. The table clearly shows that poverty rates are lowest when a person is employed and receives a wage above two-thirds of the median. Low-paid work significantly raises the probability of being in poverty. The difference between local and migrant workers is striking. About 45 per cent of low-paid migrant workers are subject to poverty, while
the risk is much smaller for local workers (5 per cent). For these migrant workers, the effect of transition to higher paid jobs is particularly noticeable, as only 13.9 per cent of migrant workers with higher paid jobs live in poverty. Given the relationship between low pay and poverty, one key policy concern is how to weaken this linkage. Even when low pay is inevitable, policies can be implemented to alleviate the financial difficulties for the families of low-paid workers. Indeed, while measures which directly influence wage outcomes, such as collective bargaining and minimum wages policies, play a useful role, the welfare of low-paid workers can also be improved through policies that increase net disposable income for poor households. In fact, recent studies indicate that, in advanced countries, the relationship between low pay and poverty has been weakened through a wide range of policy initiatives targeting low-paid workers. 99 In developing countries, given the massive extent of informal employment, minimum wage policy needs to be combined with other income policy measures aimed at the very bottom of the labour market, especially its informal segment. 100 In this respect, the real policy challenge is how to develop a coherentsystem in which both welfare institutions and the labour market measures are developed to secure a minimum level of income for poor households."
Page 80:
Another emerging concern is the fact that wage stagnation before the crisis may actually have contributed to the crisis and also weakened the ability of economies to recovery quickly. Although there are many other factors involved in triggering the global financial and economic crisis, one view is that the crisis had its structural roots in the decline in aggregate demand that preceded the crisis. Redistribution from wages to profits and from median-wage earners to high wage earners reduced aggregate demand by transferring income from individuals with a high propensity to spend to people who save more. Before the crisis, some countries were able to maintain household consumption
through increased indebtedness, while other countries based their economic growth mainly on exports. This model, however, has proved to be unsustainable. In the future, countries may find it in their interests to base their economic growth on stronger household consumption, and on household consumption that is anchored in earned income rather than based on increasing debt.
Our report argues that wage policies can make a positive contribution towards a more sustainable economic and social model. Both collective bargaining and minimum wages can help to achieve a more balanced and equitable recovery by ensuring that working families and households on low wages obtain a fair share of the fruits of every single percentage point of economic growth. Our previous Global Wage Report 2008/09 showed that the connection between wages and productivity is stronger in countries where collective bargaining covers more than 30 per cent of employees, and that minimum wages can reduce inequality in the bottom half of the wage distribution. Our current report shows that collective bargaining and minimum wages can also contribute to reducing the share of workers on low pay. At the same time, there are considerable challenges still facing unions trying to reach out to vulnerable workers and in the establishment of an effective system of minimum wages.
First, low and decreasing union membership and the weakening of collective bargaining in many countries remain causes of concern. This is not just because of the difficulties which workers face in trying to organize themselves (often due to increases in numbers of non-standard workers, including many domestic workers, as highlighted earlier in the report) but also because unorganized workers often have access to few alternative mechanisms to secure fair and decent wages. In this context, it is interesting
to see that, during the crisis, there has been renewed interest in the role of the state in promoting collective bargaining through various incentive schemes (for example, work-sharing and employment subsidies). There has also been growing recognition of the relevance of collective bargaining in raising wages along with economic growth, including in Asian countries. If feasible and necessary, tripartite wage bargaining ??? while not collective bargaining per se ??? could also potentially benefit vulnerable workers, thanks to its comprehensive coverage.
Second, diminishing reliance on collective bargaining for wage determination tends to create incentives for assigning an increasingly important role to minimum wages so that, in some countries, they become almost the only wage policy tool. In this case, minimum wages policy may go through a qualitative transformation, which, in turn, could result in the minimum wage system becoming caught between a number of competing policy demands and goals. Indeed, as a result of such a transformation, minimum wages are set for median-wage workers rather than for low-wage workers. It is not difficult to see that, in this event, the fundamental goal of minimum wages ??? to protect the most vulnerable workers ??? might be compromised. Therefore, it is important to ensure that the minimum wage policy is more beneficial to low-paid workers. However, restoring the original goals of minimum wages must be accompanied by the creation of alternative mechanisms which facilitate meaningful wage negotiations for median-wage workers. In other words, there must be a system of wage policies which benefits all workers, irrespective of wage levels, union membership or employment status. Third, as this report argues, policies which augment disposable income for lowincome households need to be considered, along with the more traditional policy measures of collective bargaining and minimum wages. These policies should be designed and evaluated in terms of preventing low wages from being translated into poverty for the family. In-work benefits, such as tax credits, are certainly helpful in this regard. However, they should be accompanied by (and not replace) wage-floor regulations, either through minimum wages or coordinated collective bargaining; otherwise, in-work benefits may provide incentives for wage depression. In countries where in-work benefits are not a feasible option, due, for instance, to the presence of massive informal employment, more direct income support policies for poor families (such as cash transfer) need to be considered. Again, in order to maximize their impacts, all of these policies should be designed to complement other wage policies."
Finance and Economics Discussion Series
Divisions of Research & Statistics and Monetary Affairs
Federal Reserve Board, Washington, D.C.
The Contribution of the Minimum Wage to U.S. Wage Inequality
over Three Decades: A Reassessment
http://www.federalreserve.gov/pubs/feds/2010/201060/201060pap.pdf
Partisan Politics and the U.S. Income Distribution
http://www.princeton.edu/~bartels/income.pdf
Federal Reserve Bank of Boston
http://www.bos.frb.org/economic/neppc/memos/2008/shavit100608.pdf
A Decade Of Health Care Cost Growth Has Wiped Out
Real Income Gains For An Average US Family
http://www.ctmirror.org/sites/default/files/documents/Auerbach FF.pdf
EPI: HOW UNIONS HELP ALL WORKERS
http://www.epi.org/page/-/old/briefingpapers/143/bp143.pdf
