Effects of minimum wage on the poor and on society?

JCricket · #1 10-22-2016, 10:20 AM

Hey folks,
On our ballot here in Colorado, we have a minimum wage constitutional amendment. It is amendment 70. Summarized into a nutshell, it forces the minimum wage to be regulated by the state. It will bring out minimum wage to $12.00 per hour by 2020, and then to increase equally with inflation.

I see many issues with this. First, it is an amendment to the constitution. This makes it nearly impossible to change if it turns out bad. Second, it does not allow for depression or deflation(unlikely but it does happen). The last is the affect it will have on the poor, the economy and those who live on fixed incomes.

It is my opinion, that as minimum wage goes up, rents directly follow. In essence, a minimum wage has little benefit towards making the poor stronger. It does balance the unethical and corrupt to an even playing field, it mandates the lowest a company can pay an employee. So, in that sense, I think it does "protect" the poor, more so than helping them. Please don't misunderstand, I think helping the poor should be one of our countries highest priorities.

Then come the affects on the economy. For most of the consumer driven side of our economy, it will have a net zero affect. However, any manufacturing and exporting could be adversely affected by the law. I do think the affects would be minimal.

But then comes another problem I see. How does increasing the minimum wage affect those on social security or fixed incomes? They do not get the benefit of these raises. So it would be very possible that a person who is living okay today, will be poverty stricken in just a few years. They would be unable to live in our state,

Example, a $7.00/hour wage equates to $14k annually. A person who is getting $2k per month on SSI or $24k annually is in essence making $12/hour. As soon as the minimum wage goes up, the buying power of those on a fixed income goes down. In short order, they will be unable to even afford rent.

Sorry for the long wined post, just kind of thinking out loud here.

icenine · #2 10-22-2016, 10:24 AM

The same old tired arguments against a living wage in the 21st Century.

donquixote99 · #3 10-22-2016, 10:28 AM

I would like to see evidence of this 'tight relationship' between minimum wage and rent. Is it just a hypothesis, or has it been demonstrated?

JCricket · #4 10-22-2016, 10:32 AM

Quote:

Originally Posted by icenine

The same old tired arguments against a living wage in the 21st Century.

Do you have an idea of a system that will benefit the people from a controlled wage? I would love to hear it. And BTW, I am a s0@al!st at heart and a registered democrat.

icenine · #5 10-22-2016, 10:33 AM

My wife makes $10 an hour at a Native American casino in SoCal.
Don't tell me that low wages are a good thing.

JCricket · #6 10-22-2016, 10:34 AM

Quote:

Originally Posted by donquixote99

I would like to see evidence of this 'tight relationship' between minimum wage and rent. Is it just a hypothesis, or has it been demonstrated?

It is my hypothesis. Thanks for pointing this out. I feel this way due to many years of living at minimum wage. I'll see if I can find any data on it. It may be just a crazy idea of mine.

JCricket · #7 10-22-2016, 10:38 AM

Quote:

Originally Posted by icenine

My wife makes $10 an hour at a Native American casino in SoCal.
Don't tell me that low wages are a good thing.

I NEVER said that. I never said they were good! NEVER! Please take the time to read and understand my points, and if not clear ask for clarification.

I posted my concerns about how they affect the poor. And to clarify further, a minimum wage is ALWAYS the low wage in a society. So unless there is a way to balance that against costs, it does not benefit them as much as we would like it too.

Boreas · #8 10-22-2016, 10:39 AM

The politer, less dismissive reply to your post is that each time the minimum wage is raised the dire predictions you've listed are made and they never come to pass. What does happen is that the increased spending ability of the people making minimum wage stimulates the economy. People at the bottom spend every cent they earn. Increase their wages and they'll spend that too.

The constitutional amendment part is another matter. We get them all the time out here on California. Since voters rarely do enough due diligence to truly understand the implications, often far reaching, of the initiatives they're asked to vote on, the chances of enshrining serious errors in judgment into the state constitution are very high. So, as a matter of principle, I'm against the practice of amending constitutions by a simple majority vote of the "rabble".

donquixote99 · #9 10-22-2016, 10:45 AM

Quote:

Originally Posted by JCricket

It is my hypothesis. Thanks for pointing this out. I feel this way due to many years of living at minimum wage. I'll see if I can find any data on it. It may be just a crazy idea of mine.

Not a crazy idea. I'd expect a positive relationship. I'm just wondering how tight it is. As stated, if income goes up $10.00 on the margin, rent will go up $9.50 or more. Perhaps it would more likely go up $1.50, or $.25.

CarlV · #10 10-22-2016, 10:46 AM

Gavin Newsome did this and also a universal health coverage about 10 years ago in city level programs. I am pretty sure that you haven't heard anything about $$$ impact much because there hasn't been much of any. Oakland has done this more recently and a couple of poorly run restaurants failed but even more have started up and are doing fine as are SF restaurants. Nothing to fear unless you are a Koch.

Carl