What do you think about raising the minimum wage?
I think it's about time it was raised.
Why does it always seem that when we raise the minimum wage, people making minimum wage are no longer making enough after a few years and need another raise in the minimum wage?
Beyond inflation, there is _urbanization_. FDR originally intended the minimum wage would be adjusted for local living costs. Getting the same living standards that $7.25/hour provides in 2019 in the very lowest cost of living areas of the us would take over $22/hour in Manhattan.http://www.aei.org/publication/a...I think the EITC or a basic income is a more appropriate income support mechanism in depressed communities. I would be happy to raise the national minimum wage right away to $22.25/hour in Manhattan, and continue raising it automatically as long a property values and employment are not decreasing.I don’t think that is a good idea for the most depressed communities in the US. Ithink this hasn’t been done in part because republicans depend on donations from NYC and faux lefitists like wasting time on periodic minimum wage increases so they don’t have to addresss real issues.
What caused the 2008-2009 recession? Who caused this? Why?
Mortgages became too easy to get for irresponsible people. These people were approved for mortgages without any proof of their income, and were given adjustable-rate mortgages (you should look up what this means if you don't know) and told that they could refinance into a fixed rate later after their property value went up some more. The problem is, the real estate market always goes up and down (like the stock market does), so when enough people decided that houses had become too over-valued, the demand for houses fell. Due to supply-and-demand, that meant there were a lot more houses available than buyers, so prices of homes had to fall. Since the home values fell, people couldn't refinance their adjustable rate mortgages, so when their rates adjusted, they couldn't afford their new increased payments. They started getting foreclosed on, which meant even *more* houses for sale available. Well, that turned into a vicious cycle that fed on itself for a while. And since there were too many houses available, that meant that construction of new houses stopped, so construction workers were out of work. And as more people lost work and homes, things kept getting worse. Investors had been buying up mortgage bundles (that's they way they sell mortgages as investments in the stock market) while housing prices were going up, but once those mortgage bundles lost value after houses lost value, companies that insured those bundles had to start paying investors for those bad investments. Well, since a lot of bundles went bad, those insurance companies went bankrupt. That also hurt the stock market. I'm sure there is more to it than that, but that's the best abbreviation I can give you. Hope that helps. Add: Oh, I forgot to mention - the reason so many irresponsible people were getting mortgages was that the govt starting forcing lenders to give loans to "high risk" people. That basically means poor/irresponsible people who can't afford a mortgage because they don't have the income or willpower to do so. It started with the Community Reinvestment Act under Carter, and then Clinton and GW Bush added to it. It's not entirely one party's fault, both had their hand in it.
Using verbiage that your typical 5 year old would understand, what is the logic behind minimum wage?
The logic behind minimum wage laws is that government regulation can change the pricing system of labor without affecting supply and demand. Labor is of course subject to the normal economic laws of supply and demand. In reality, over time it is generally the case that artificially increasing the minimum price a worker can be paid reduces the supply of low paying jobs. It is therefore unfortunate that the main proponents for minimum wage increases are minimum wage workers as their protests may well lead to one or more of the following: - they may lose their job if the cost of their labor is no longer worth it (they are generally unskilled). - their employer may reduce their hours to keep costs down. - some of their co-workers may lose their jobs. They keep theirs but the cost of living also rises. - the company they work for may lose profitability and shut down. The fact is that as employers aim to maximise profitability, they are often unable &/or unwilling to increase labor costs when there is no tangible increase in productivity or output. For example, if you are a McDonalds store owner and the minimum wage in your state rises to $17.00/hr, you have to make a choice. Do you: a) Increase all your existing employees wages and operate at a loss, eventually closing down. b) You and your competitors increase all the wages and increase the prices of your cheap fast food. The general cost of living rises in your area. Your minimum-wage workers are most affected. c) You fire some workers and try to force your remaining workers to increase productivity, possibly working much longer hours yourself. d) You replace most of your staff with a robot burger assembly line which costs a fraction of the labor costs to do the same job more productively. Your customers may boycott at first, but your lower costs will out-price your competitors. People get priced out of the labor market all the time. Just remember the next time there is a push for an increase in a government-imposed minimum wage that this is effectively pricing the poorest, most unskilled and most uneducated out of the labor market. This drawing helps visualise it:Price controls run counter to free market economics. It's easy to push for an increase in minimum wage at first as most people only think of the immediate effect of the lowest paid workers getting paid more. In economics, you have to look at not just a special interest and not just the intended result but the actual result for everybody.