if anything, the automation would happen VERY suddenly, at least in the company stores. The refurbed McD's near me have all gone to kiosk ordering, though there are people in the drive through, still. Won't be much of a leap for automation...

IIRC, BK has been doing base automation of patty cooking for 30+ years, because of the flame broil which is done via grill conveyor belt... wouldn't take much to make it fully automated.

What I may have missed in articles is how this will mess with franchisees.

They are the small business owners that might have a store or 5... while the company stores might be updated immediately, franchisee's will take this on the chin, and probably go out of business faster.

The franchisee closure issue will probably be the biggest pain point, because they are entrepreneurs rather than corporations.

Those beying for unions and 15 bucks probably don't think about that. This would be a CF initially, and ugly later.

But if you are TRYING to get rid of middle class entrepreneurs, this would be a handy way to do it.

All I have is one data point from literally 30 years ago, but at the same time that 30 years ago, I was being paid as an intern software engineer at $15 per hour, the nearby In N Out, which we visited everyday, was seeking help at $7 per hour PLUS health benefits. Yeah, really, and that was in the early 80s.

I hear and recognize that a 15 dollar minimum wage will almost certainly lead to more automated ordering, I am not saying that argument is wrong.

Merely saying it's not the only argument, nor that it's destined these places will go out of business.

And automation is going to hit many many businesses and if it's possible to automate these jobs, are you willing to legislate these jobs not be automated?

If not, better get used to a society in which work, even a minimum wage job, is not required for existence.

As Amy suggested a few months ago, Basic Income. As Jeremy Rifkin wrote about 20 years ago, "The End of Work" http://en.wikipedia.org/wiki/The_End_of_Work

SwissArmyD said, "there are people in the drive through, still."

Those people in many cases are not physically in the restaurant. They're in call centers. Those call centers don't have to be in the US, and minimum wage doesn't have to apply to them. That $15 wage would still apply to the people who formerly stood onsite with headsets on, but then... they would also not have that job.

The worst part is the circular effect of raising the minimum wage.

The motivation, ostensibly, is to provide a "living wage" to minimum wage workers so they can afford to buy more things.

However, raising the minimum wage will increase the cost of stocking shelves, moving merchandise, clerking stores, flipping burgers, etc. As a result, the price of the item being sold will need to be increased to cover the higher costs.

And the minimum wage worker will find that his brand spanking new minimum wage won't get him any further than his last one got him.

==============================

I said "ostensibly" earlier in describing the purpose of raising the minimum wage as enabling workers to have more purchasing power, but it's not.

Many union contracts, especially for low-wage unions like the SEIU and UFCW, are pegged to the minimum wage. Raise the minimum wage and workers represented by those unions will be due a raise to keep their wages at a certain level above minimum. With a higher wage comes higher union dues.

Guess which unions are encouraging and leading the fast food worker strike?

If these increases trouble you so, then stay home and eat there. If a slightly higher price gives someone who makes less than I do a better deal, I'm all for it.

As Jeremy Rifkin wrote about 20 years ago, "The End of Work" http://en.wikipedia.org/wiki/The_End_of_Work

End of work means end of income. Those who have enough money not to work themselves aren't going to pay someone to sit at home and enjoy life like they do.

I said "ostensibly" earlier in describing the purpose of raising the minimum wage as enabling workers to have more purchasing power, but it's not.

At the same time, it will depress the purchasing power of those not in Union jobs, who have fixed incomes, or are on a salary, rendering them less able to purchase consumer goods, which will drive down demand for all goods except for very basic necessities, possibly sending the entire US economy even deeper into a depression.

I read an article a few years ago, how almost all office workers in Sweden brown bag their lunch. The cost of restaurant food is high enough there, and also taxed heavily, that few people can afford to do anything else.

I think it is possible that a lot of people are going to rediscover how to make their own sandwiches, soups, and salads.

Invest heavily in Bento box manufacturers.

I think it will be more: 4. a large jump in inflation, until $15 buys what $10 does now. But this will take a few years of places closing to reach.

Was trying to explain to one supporter of this that it doesn't matter if the CEO was making 5 million/yr. jumping salaries that much would make them unprofitable.
His conjecture was if they lowered the CEOs salary a little they could do it. But basic math, $5 mill divided into over 30,000 employees, working about 2000 hrs/yr worked out to be about 8 cent raise. But couldn't convince him, companies don't have infinite money.

And to amplify Conan's remarks: how many of us will stand still for a price increase that undermines our buying power? no, instead we'll ask for - and likely get - a raise of our own.

If these increases trouble you so, then stay home and eat there.

Really? you think that will help? Hint: the stockperson at the grocery works for minimum. Their wages just went up, too, bunkie. So now my food prices just went up. And unironically, so did theirs.

Again, I'm going to walk into my boss' office and say "my pay check don't go so far any more, I need a raise just to keep up". At some point, I'll get it. Now we have more money chasing the same amount of goods and services. Guess what? those prices just went up.

If they're lucky, the minimum wagers will be right back were they are now. If they're unlucky, they'll lose purchasing power and be in a worse state. If they're really unlucky, they'll be unemployed.

The proper solution, of course, is to gain more skills so that you don't have to work at a minimum wage job any longer than absolutely necessary.

Many moons ago in my macroecon class at this conservative college, my professor said something that has stuck with me, and jibes with what Isab said. Increased minimum wage leads to inflation. Inflation is what people know to be true, but what they fail to actually see in action, because it is slow. There is a wage for every job, and if that job cannot be filled because the wage is too low, then that job will cease to exist or that wage will increase. Basically what everyone else has said. I don't understand the idiots who think that $15 is gonna solve any problem. It's just creating more.

If these increases trouble you so, then stay home and eat there. If a slightly higher price gives someone who makes less than I do a better deal, I'm all for it. ~ Posted by: ToppHogg at September 5, 2014 12:52 PM

How noble of you.

Keep in mind that you'll still have to pay more for your groceries, school supplies, and other things sold by retail outlets who will have higher costs when the minimum wage goes up or those UFCW and SEIU contract riders tied to the minimum wage kick in.

And so will the people who make less than you do.

==============================

If they're lucky, the minimum wagers will be right back were they are now. If they're unlucky, they'll lose purchasing power and be in a worse state. If they're really unlucky, they'll be unemployed. ~ Posted by: I R A Darth Aggie at September 5, 2014 1:06 PM

In the end all we're going to bankrupt the poor in the name of helping them.

"If a slightly higher price gives someone who makes less than I do a better deal, I'm all for it."

Missed that class, didja?

This post is for those of you who think this is a good idea.

You are almost criminally ignorant. Yes, so is CNN. So is each and every person backing the idea of raising the minimum wage.

How can I say this?

Because each and every person or institution backing the idea of raising the minimum wage has completely missed what a minimum wage does:
The minimum wage sets the value in dollars of "one hour of work". Problem: the unit "one hour of work" CANNOT BE CHANGED.

Government cannot change it. The market cannot change it. An individual cannot change it.

What this means is that each time the minimum wage is raised, the dollar is immediately devalued.

Why do you think a Coke™ is a dollar instead of a dime?

I am very sorry to break the news to you, but the reason you make minimum wage–in case you do–is because you have failed to sell your labor for a higher price. Either you do not have the skills to command higher pay, or you have elected to perform tasks which anyone can do.

Maybe you clamor for government to do something? What they can do is convert the economic system to socialism. You are already compelled to pay for medical service you will never receive, and you generally support government telling businesses what pay and benefits they may offer, in some cases with glee because you think somebody is making money you should have.
Of course, that means government can tell you what you can earn and keep.

Oh, gee, you never saw that coming, did you?

Get ready for the $3 Coke!

Raising the minimum wage is stupid. Smarter action would be lower the price of gas by half. Hey, presto!

Wawa has already automated the kiosk for ordering a sub. Subway could do that easily enough.

And they pretty much have Roboburger ready to go. It can make 360 burgers per hour.

Momentum Machines estimates that every fast food franchise in America spends an average of $135,000 annually on staffing.

If the Roboburger is $250K and the annual cost of employes is $135K wouldn't the rather take out a three year loan and save the rest of the money?

So if they can automate making fries and onion rings they will hire two or three more skilled employees and can the majority of the minimum wage employees.

I'm sure Subway is also working on automating their sub making.

*****I am very sorry to break the news to you, but the reason you make minimum wage–in case you do–is because you have failed to sell your labor for a higher price. Either you do not have the skills to command higher pay, or you have elected to perform tasks which anyone can do.*****

I'm still trying to figure out when people started thinking minimum wage jobs were supposed to be a means of supporting a family.

Oh God, no more machines!

It'll mean the end of personalized service, no more ordering a cheeseburger without the burger...

Mira, mira, allá, viene la tormenta

https://www.youtube.com/watch?v=5C6GZQ7UNaU

It'll mean the end of personalized service, no more ordering a cheeseburger without the burger...

At the Wawa stores Jim P. was citing above, you can order a sandwich any way you like. Decent coffee, too.

Either you do not have the skills to command higher pay, or you have elected to perform tasks which anyone can do.

So people working two jobs just to pay rent and buy food, they should just magically demand higher pay, or somehow educate themselves in their copious spare time, yes?

I'm pretty sure most of the people you look down your nose at didn't "elect" to take those jobs. When the choice is starve or take a crappy minimum wage job, what would you do?

See, I too can rant along without offering a suggestion or solution, just to point out that someone else's ideas suck.

drcos, when you can observe the real world objectively, and perhaps not assign your own meaning to the observations of others, you will have grown up.
I look forward to that day and wish you great success.

Meanwhile: raising the minimum wage will NOT assist ANY person for who you are apparently speaking, for the reasons above.

Make a note of it.

Automation is continuing its forward march with or without inflation, and with or without the minimum wage. Sooner or later we're going to have to cope with the reality that we continue to be more economically productive with an ever-decreasing need for labor, and this is happening especially quickly in service industries. Robots will make your burgers and clean your floors. Self-driving cars will haul your goods from one state to another and drive you to the airport.

I remember reading an article about a Christmas tree farm, down in the Southeast U.S. This was several years ago.

The owner was bitching that he had to hire illegals to cut Christmas trees because no Americans would do it for the ten bucks an hour he could pay, that would allow him to make a profit, and stay in business.

It never seemed to cross his mind that a real Christmas tree was somewhat of a luxury item that no one had to have.

As soon as the price point hit fifty bucks for a tree, several years ago, I was off to the discount store for an artificial one.

I think many of my fellow citizens followed suit, because the Christmas tree lots around town are getting smaller and fewer every year.

My husband and I had a rousing economic debate at the time, when I said, the solution was to automate, with a Christmas tree cutting machine, and if that was not cost effective, and the price point of the trees became too high, the owner was probably not going to remain in business.

(In other words the solution was not to let more illegals into the country to work for what this guy was willing to pay, while the rest of us picked up the tab for all the social services these low income people use)

It was nothing more than cost shifting from the ag industry to the government via the taxpayers.

@Isab: The individual with the struggling business sees only his or her own individual problems. I can see where the guy was coming from. That said, you are right - it is cost shifting.

The agricultural sector is somehow especially egregious - farmers feel entitled to subsidies, and politicians in turn apparently feel obligated to provide them. Tobacco subsidies at the same time one is trying to reduce smoking?

Personal anecdote: I had an uncle who owned a farm, but was a terrible farmer. He made ends meet by delivering mail. Along came a government program to reduce production, as a form of indirect price support. He never made so much money farming as when he signed up for that program - paid not to farm. How stupid can the government get?

Radwaste Says:

"What this means is that each time the minimum wage is raised, the dollar is immediately devalued."

I'm going to need more support for this claim than the zero support you have provided.

There is no reason to believe that the dollar itself will "lose value" simply as a consequence of raising the minimum wage to match already extant inflationary pressures.

Increasing the minimum wage isn't the same thing as the government printing more money out of thin air and diluting the value of the dollar.

That you seem to in some sense be equating these two disparate things suggests that you have an underlying assumption that the increased wages going to the workers shouldn't come at the expense of corporate profits.

Raising the minimum wage should be a zero sum game... the money already exists within the system... hence there should be no dilution of value.

Now, there are arguments to be made that concentrating wealth in the hands of very few who just let it pile up and never spend it acts as a deflationary pressure because they are essentially taking money out of the system... however, that isn't a very compelling argument for keeping wages low for the minimum wage workers.

If anything it suggests there is a problem with letting money pool like that and remain stagnant.

Your argument basically boils down to the following mathematical reality...

If in principle 1 person had all the money and wealth of our entire nation save for ~$100 per person... the price of goods and services would reflect the fact that the overwhelming majority of people only had $100 to spend. That one individual had billions upon billions of dollars wouldn't factor into the price of bread, or milk, or water, or electricity, etc...

That in and of itself isn't a good argument for maintaining such a system simply because having the money distributed a little differently would end up increasing the price of a loaf of bread for the one person who has all of the wealth.

Right now the system is broken... perhaps raising the minimum wage isn't a good solution... but leaving things as they are isn't a good idea either.

Right now,the solution is probably to cut welfare so people actually go do even those kinds of work which they did not want to do. Too many people just sitting at home not working because the work available is not the kind of work they want even if it pays well. Nobody gets to develop skill without making mistakes and if people want their whole life to be one of all their wants being fulfilled without any sacrifices from their side, they are completely mistaken....And even at an $8 minimum wage, people are still making decent money if they utilize subsidies and benefits properly and not starving to death. They can easily substitute a new car for a used one, have cheaper internet packages, drink less beer and cook their own food instead of eating out thereby saving enough and more money....and have as many kids as they can provide for instead of thinking that its the government or taxpayers job to provide for their kids.

Geez, Red, is the world coming to an end? I think this is the first one of your posts I've ever fully agreed with!

o.O

when you can observe the real world objectively, and perhaps not assign your own meaning to the observations of others..
So your comment about skills and 'elected tasks' was meant in a good way?

Meanwhile: raising the minimum wage will NOT assist ANY person for who you are apparently speaking...
I never said it would. Who is misreading observations now.

But you win, by telling me to grow up.

Redrajesh Says:

"Right now,the solution is probably to cut welfare so people actually go do even those kinds of work which they did not want to do."

Exactly how does this resolve the issue of large quantities of wealth remaining essentially stagnant and pooling in the hands of very few individuals?

I get the distinct sense that many people don't understand that economies are driven by the movement of money... when money doesn't move and sits in one place it is a problem.

Raising the minimum wage is one way to get money moving because the people who receive the money are not in a financial position to save it... they tend to spend it on goods and services.

That isn't to say this is the best way to move money within the economy, but no one is presenting viable alternatives in this conversation... simply complaining how giving more people more money to spend will make goods and services more expensive for those who simply want to be able to save more.

Cutting welfare also doesn't resolve this critical issue to our overall health of our economy.

It seems to me that people here are acting rather penny wise and pound foolish.

Also:

"And even at an $8 minimum wage, people are still making decent money if they utilize subsidies and benefits properly and not starving to death."

You're math doesn't add up here.

$8 an hour multiplied by a 40 hour work week, multiplied by 52 weeks a year yields an annual salary of:

$16640 before taxes.

That doesn't factor in possible vacation time... so let's just assume this hypothetical individual never takes a vacation and never gets sick.

After taxes we are looking at ~$15000.

Let's assume they have monthly rent and utilities of ~$700.

This means they have $6600 to cover all other expenses including food, clothing, and transportation for the entire year.

If they spend an average of $10 per day to eat they have ~$3000 left over for the entire year and we haven't even put clothing on their back yet.

And yet you presume this person can make due with a used car over a new one... such a person can't afford a car at all. Gas and insurance alone would wipe them out before they could even afford a new pair of underwear.

Where exactly do you get off saying such an individual is "still making decent money"???

That person barely makes enough to feed themselves... and that is if they take zero vacation time and never get sick and have zero medical expenses.

Ah... but you did stipulate that they make decent money "if they utilize subsidies and benefits properly"... but you started off saying you wanted to "cut welfare".

So which is it... are we going to have welfare available to help these people out... or are they going to wander around in dirty clothing they can't afford to replace, never taking a break, hoping to never get sick, and never managing to save a dime for the future?

Why don't you take a crack at working out the budget for someone who has a total of $15000 to work with for the entire year and explain to me how they make "decent money"... because the numbers just don't pan out.

Also... I only factored in federal taxes, I didn't even include things like state income tax. I also gave them a full 40 hours which they are in no way guaranteed.

I have painted the most optimistic financial picture I could for someone who earns $8 an hour who is trying to support themselves.

People who honestly believe that such individuals make "decent money" are either delusional or talking out of their ass because they haven't actually run the numbers.

Raising the minimum wage should be a zero sum game... the money already exists within the system... hence there should be no dilution of value. ~ Posted by: Artemis (Orion) at September 6, 2014 12:10 PM

Artemis/Orion, you're conflating money and wealth - a common mistake made by those who don't really understand economics.

Investing money is not like putting it in a Scrooge McDuck money-vault and keeping it out of circulation. If I spend $100 on a stock (or any investment instrument) and it's now worth $150, I haven't taken $50 from some place else in the economy or denied someone else the ability to spend $50.

In fact, I've put $100 into the economy. And when I sell that investment instrument, I'll have $150 to reinvest or to put into the economy in the form of spending (after income and capital gains taxes).

=========================

Now, there are arguments to be made that concentrating wealth in the hands of very few who just let it pile up and never spend it acts as a deflationary pressure because they are essentially taking money out of the system... however, that isn't a very compelling argument for keeping wages low for the minimum wage workers. ~ Posted by: Artemis (Orion) at September 6, 2014 12:10 PM

Unlike your Scrooge McDuck fantasies that the rich are keeping piles of money in their vaults or under their mattresses, the rich actually invest their money in the stock market, venture capital endeavors, currency trading, businesses purchases, etc. That way it creates more wealth for them.

And when that money is invested, it makes more work for others, either in money management, construction, and businesses (start-up or otherwise), corporate capital improvement projects, and in providing goods and services for the folks for whom the investments directly create jobs.

On the money they make from these investments, the rich pay taxes - local, state, and federal - which fund government projects, infrastructure maintenance and improvements, increased police and fire protection, and support programs for the poor - all of which add jobs to the economy.

The rich also tend, moreso than the general population, to donate large sums to civic endeavors (like parks, museums, public television, cultural organizations, etc.) and to charities. Again, money funding these things tends to add jobs to the economy.

http://www.city-journal.org/2014/24_3_nyc-private-wealth.html

Raising the minimum wage will only result in the costs of goods and services going up in response to the higher cost of labor. Remember, workman's comp, Social Security, and other expenses paid by the employer are on a percent of wages basis. So, a higher salary results in higher employer costs beyond just the salary increase.

In your fantasy, companies will lower costs because fewer people will be able to afford their products - at no expense to the wider economy. In reality, they'll only be able to lower the costs by reducing labor costs - and they'll do that by automating processes, off-shoring functions, and laying off workers.

=========================

According to CNBC, Maryland's tax on the rich chased out 31,000 residents and cost the state $1.7 billion (with a b) in lost tax revenues

Exactly how does this resolve the issue of large quantities of wealth remaining essentially stagnant and pooling in the hands of very few individuals?

It's only an "issue" if you don't understand the real issues.

"Radwaste: "What this means is that each time the minimum wage is raised, the dollar is immediately devalued."

I'm going to need more support for this claim than the zero support you have provided."

Aaaaand you don't understand the real issues. Else you'd be able to tell Radwaste why that's incorrect.

(From a technical perspective. From a real-world, it's arguably a defacto devaluation.)

Similarly to how I've opined that we've obsoleted (for now) the term "poverty" (can't get enough food), the term "wealth" is similarly getting obsolete.

So Bill Gates has a computer account that has hundreds of zeros behind it and mine has 2 zeros.

Is that "wealth"? I'm living in a house, with air conditioning, satellite TV. I've got 2 running cars, one almost-running one. One canoe with a 5HP outboard. One 19 foot boat that needs rebuilding with a 125HP motor.

Current on vaccinations, as is my family.

What "wealth" am I missing out on?

Other than a backup electric generator. That's actually something I'm missing. DAMN THAT BILL GATES AND KOCH BROTHERS. THEY'RE STEALING MY WEALTH!

Conan Says:

"you're conflating money and wealth - a common mistake made by those who don't really understand economics.

Investing money is not like putting it in a Scrooge McDuck money-vault and keeping it out of circulation. If I spend $100 on a stock (or any investment instrument) and it's now worth $150, I haven't taken $50 from some place else in the economy or denied someone else the ability to spend $50.

In fact, I've put $100 into the economy. And when I sell that investment instrument, I'll have $150 to reinvest or to put into the economy in the form of spending (after income and capital gains taxes)."

For someone trying to claim advanced knowledge of where all of this stagnant money ends up you really are quite ignorant.

The stagnant money I am talking about doesn't end up in our economy but rather sitting abroad doing absolutely nothing for us at home.

It is in fact kept out of circulation so far as the United States economy is concerned.

My argument revolves around all those pitching a fit about our local economy and how welfare and minimum wage increases at home will somehow hit us hard... all the while ignoring the fact that the wealth within our economy is slowly but surely being shifted outside of the country to remain a completely inactive part of our home economy.

Furthemore, not all of that wealth is invested in stocks or other instruments... some of it just sits.

You really don't get it... but go ahead and complain about things like minimum wage and welfare as if that's the "real" problem locally... it is a symptom, not the disease.

Unix-Jedi Says:

"Aaaaand you don't understand the real issues. Else you'd be able to tell Radwaste why that's incorrect."

Oh... I get it.

Radwaste makes an unsupported claim... I ask him to support it... and because I don't debunk it, that means I am wrong.

Alright, let's continue playing this game.

I claim that there is a teapot floating in orbit around the sun between Neptune and Pluto.

If you can't prove that it isn't there then we must all accept that it is.

Apparently in your world it isn't my job to prove my own claims but your job to disprove them.

That isn't how logical arguments work.

The person making the positive claim must provide support for it otherwise no one is obligated to believe it.

Artemis, I'll say it again:

The unit, "one hour of work" cannot be changed.
The money issuer now comes along and says it takes MORE DOLLARS to pay for an hour of work.
The unit, "one hour of work" cannot be changed.
If you worked TWO hours to pay for a plumber to work at your house for ONE hour, the ratio is NOT changed by a change in the minimum wage, BECAUSE the dollar is only a marker as a medium of exchange.

What everyone with a business and real world experience is trying to tell you is simple: prices immediately go up, because the government has devalued the dollar, by REQUIRING more dollars for THE SAME WORK.

I'll repeat this as long as it is necessary, because it's correct. Get used to it.

If you tire of thinking about this, ask yourself why it doesn't cost 10¢ for a Coke™ any more. It used to - and no, tech advances make things cheaper to make, not more expensive.

Radwaste,

Your statement is only true in the limit of several assumptions you are smuggling in but not sharing with the group which is precisely why I am pushing you to "show your work". Since you seem unwilling to show your work, I'll do it for you.

This notion of the unit of work masks the real issue here that apparently you refuse to talk about.

If I own a company that brings in 10 million dollars in profit before I factor in things like paying my employees.

If my payroll initially is 2 million dollars... I keep 8 million for myself.

If the government were to suddenly come in and demand that I double how much I pay my employees I can do this without affecting the consumer at all.

My payroll becomes 4 million dollars and I keep 6 million for myself.

Yes I ended up taking a pay cut in this scenario, but it is mathematically possible for all my my prices to remain exactly the same while paying my employees more.

The only time prices need to go up is if I add an additional constraint that my own yearly salary remains constant or goes up.

If I require that I make that same 8 million dollars... a requirement that I am imposing... it is not imposed by the government, only then do prices increase.

No one is devaluing the dollar in this case except for those who adamantly refuse to let their employees catch up to them in any financial sense.

If their salaries double... then by god their salary must double too... but that isn't a constraint imposed by the government.

Let's take McDonalds as an example here.

According to the numbers I have read they have an annual revenue of ~28 billion dollars and an annual profit of ~6 billion dollars (that is the figure after payroll).

They could if they wanted to simply pay their employees more... have a smaller annual profit... and keep the price of their food exactly the same.

And before you and Conan and Unix get all high and mighty about how I don't understand business and you all are experts... please refer to the following article from the business insider that essentially makes the exact same argument I have been making:

http://www.businessinsider.com/mcdonalds-could-double-wages-for-employees-and-make-less-money-2013-7

Maybe you three need to take your collective heads out of your asses and realize that you are smuggling in a great deal of assumptions about how the business world needs to work when in fact it doesn't have to work that way.

Business people know this... economists know this... I know this... maybe it is time for you three to learn something instead of just talking out of your asses and acting like anyone who disagrees with you is ignorant.

Maybe they disagree with you precisely because they know something you do not.

Artemis:

The person making the positive claim must provide support for it otherwise no one is obligated to believe it.

Interesting that you're going to go with definitions, considering you're denying a basic one.

Since you seem unwilling to show your work, I'll do it for you.

It would help if you knew what you were talking about.

If the government were to suddenly come in and demand that I double how much I pay my employees I can do this without affecting the consumer at all.

You've obviously never owned a company. Nor been in management.

My payroll becomes 4 million dollars and I keep 6 million for myself.

Since you're the expert here, what's the profit for 2015 and 2016 for (the parent companies for) Subway, McDonalds, and Jerry's Deli on 49th?

Artemis,
You prove that you don't understand what Rad is saying in the first line of your response...profit is what you have AFTER you pay all of your costs. Since you clearly don't own a business, you appear to know very little about "profit margins". This would be the amount you earn above your costs. For a company that does really, really well the profit margin can be as low as 4 percent. Most companies really don't earn much above that, with the exception of Apple, who I think at one time was at 20 percent. That means, that additional costs come out of a very small margin.

You assume that they take that money home and roll around naked in it. They don't. Most companies take that money and re-invest it in their operations. So, companies will raise their prices to preserve that margin. Companies are NOT charities and owe their investors a reliable rate of return. BTW, most of those investors are not millionaires, but regular people who own Vanguard and similar funds. Many of us out here are relying on those instruments to fund our retirement.

I coach middle school debate and one of the things I teach the kids is that you can argue anything in THEORY, but the facts of life are relentlessly conservative no matter how much you may WISH life was different. Where is my proof of this regarding minimum wage? Let me direct you to the expert himself, Milton Friedman. (FWIW, I will ask you in advance to refrain from any long winded diatribes as to how you are smarter than Friedman bc you are not...so just don't.)

https://m.youtube.com/watch?v=ca8Z__o52sk

Unix-Jedi Says:

"You've obviously never owned a company. Nor been in management."

Again you fail to address the actual issues and instead resort to dismissal based upon items that cannot be verified.

This is why I am taking a new tactic with the less logical members of this blog.

Forget about me for a second.

The argument I have been putting forth... the argument I have been advocating... the argument you keep insisting that I have no business experience, no management experience, no basis for my opinion... it is the SAME argument being put forth by the CEO and co-founder of Business Insider.

So apparently I share the exact same position as someone you can verify is a CEO, someone you can verify has business experience, someone you can verify has management experience... so what is your basis for dismissing my position now?

I think it is time to realize that your knowledge of this subject is so flimsy that you can't even recognize that the argument I have been putting forth is also held by people with the credentials you claim it is "obvious" I do not have.

Apparently your ability to make such a determination is quite suspect because what I have demonstrated beyond a shadow of a doubt is that someone with all those credentials that you can look up and verify for yourself has the same opinion I do.

Can we now get back to a discussion of the issues?

Some of the people on this blog never cease to amaze me.

When someone disagrees with you the immediate response is to dismiss them on some trumped up charges of ignorance.

Never once do you actually address the points they bring up.

I think it is pretty clear that you are projecting your own ignorance onto others.

Sheep Mom Says:

"Since you clearly don't own a business, you appear to know very little about "profit margins"."

Again with this same moronic debate tactic.

What do you have to say to the co-founder and CEO of Business Insider who makes the exact same argument I am making.

DO they also clearly not own a business and know nothing about "profit margins"?

"I coach middle school debate"

The only thing that is clear is that you also possess the debating skills of a 12 year old.

Address the substance of the argument and quit with the "clearly you know nothing" bull shit.

The only thing that is beginning obvious is that none of you actually have the chops to adequately respond to the argument I am putting forth... which happens to be shared by at least some verifiable business experts.

Forget you are having a conversation with me, how would you argue against the line of reasoning put forth in that Business Insider article.

One thing you couldn't cay to the CEO of that company is that they "clearly don't own a business".

I looked up Henry Blogdet and he graduated from Yale with a degree in HISTORY. Yeah, he was an analyst on the NYSE for awhile, until he got banned from the Exchange for fraud. During those "salad" days he earned $12 million a year. How much of that do you think he gave to the poor? Since he is so free to tell other people how much profit is enough, I would hope he gave at least half of that away, but I bet not. Doh!

Here is his bio:
http://en.m.wikipedia.org/wiki/Henry_Blodget

Sheep Mom,

So are you going to address the argument then, or just give a biography?

The guy owns a business, which was the buy in you gave before.

You are now shifting the goal posts which I suspect you will do ad infinitum, never once addressing the content of the argument.

Now it is about whether or not Henry Blogdet donated to the poor when he earned $12 million a year.

You do not sound like you make a very good debate coach.

Not once have you actually responded to a point I have made, nor a point the article I referenced made... it is just one excuse after another for why it can all be ignored.

And before you and Conan and Unix get all high and mighty about how I don't understand business and you all are experts... please refer to the following article from the business insider that essentially makes the exact same argument I have been making: ~ Posted by: Artemis at September 6, 2014 4:17 PM

Aaaand a swing and a miss by Artemis/Orion!

The study used in the Huffington Post article cited by the article you linked has already been debunked. It was a flawed study at best. At worst, it was a deliberate fraud.

http://www.cjr.org/the_audit/a_big_mac_miss_by_the_huffingt.php?page=all

The study uses wages at company-owned restaurants only, yet counts the revenue and profits from the franchise operations. 80% of McDonald's restaurants are franchises.

Of the 1.9 million people who work at McDonald's restaurants, only 440,000 work in McDonald's owned restaurants. That's a whole lotta uncounted wages.

The "study" also included executive compensation in the figure it cited as wages for hourly workers, thereby inaccurately lowering the actual price increase necessary to double restaurant worker wages.

Artemis: Actually Sheep Mom made a good point in the first paragraph of her first post. I've missed your response to that.

I'll also point out just for the sake of irony that Milton Friedman never owned a business either.

That guy was a college professor.

What is obvious to me is that your criteria for whether or not an opinion is valid has more to do with how closely it aligns with your own thoughts and opinions.

If it is clear someone disagrees with you your first tactic is to search out excuses to dismiss their opinion without further contemplation.

This is why you dismiss my opinion on the basis that "I clearly don't own a business"... yet you proceed to accept the position of someone who we can verify never owned a business and you reject the position of someone we can verify does own a business.

You aren't interested in facts or discussion, you have an opinion and will not discuss or defend it with anyone who disagrees with you.

Apparently I've got to find some verifiable business owner who we can verify has a certain quantity of charitable donations only for you to get dismiss them for some other trumped up reason you concoct on the fly.

You are not having this discussion in good faith.

Ouch! I am feeling the burn! Actually, I feel sorry people like you who stumble through life tilting at windmills and forever frustrated that nobody else can see what is so obvious to YOU. If only OTHER people would give up their earnings we could all be rich!! Let me ask you this, after you pay all of your bills what percentage of money do YOU give to charity? If corporations should be in the charity business why shouldn't you? Surely, you don't need every dollar you bring home. What percentage are you willing to give up?

BTW, I should also point out that your answer to me was completely non-responsive. Any thoughts on what Uncle Milton has to say? I think I will stick with an award winning economist over some guy who publishes a webzine and can no longer trade on the Exchange.

Again you fail to address the actual issues and instead resort to dismissal based upon items that cannot be verified.

Oh, it's verified. Because you don't have "actual issues". As has been explained to you in detail. You're self-verifying like that.

You have a simplistic "understanding" without any knowledge of what you're actually talking about. If you own a company you'd know that you're flat wrong. If you have to do management, and set a budget, you'd know better.

Since you obviously don't know better, it's obviously verified.

Nor did you answer the questions I put to you.

What will be the profits of Subway, McDonalds, and Joe's Deli in 2015 and 2016?

Your simplistic understanding, such as it is, is backwards-looking. "Well, because this happened, this could have happened". That's not how this works. It's not how any of it works.

(Further complicating your issues is that most franchised restaurants are owned by local people, aren't making a large amount of overhead, and the parent company might be doing very well, but that's not transmittable to the people doing the hiring.

And _even if_ you were right, what of Joe's Deli, who *isn't* making millions?

Address the substance of the argument

First you have to learn what substance is, and making an argument doesn't mean it's right. It's been addressed.

"Artemis: Actually Sheep Mom made a good point in the first paragraph of her first post. I've missed your response to that."

I didn't bother responding to it because it was a bad point. Here is what she said:

"You prove that you don't understand what Rad is saying in the first line of your response...profit is what you have AFTER you pay all of your costs."

Ironically the person saying I don't understand what profit is... is actually the person who doesn't realize that in accounting there are MANY different definitions for profit.

This is why I was explicit when I said the following:

"If I own a company that brings in 10 million dollars in profit before I factor in things like paying my employees."

I wanted to clearly define my terms.

In particular, the type of profit I am talking about is known as Gross Profit. It is defined here:

http://en.wikipedia.org/wiki/Gross_profit

In particular the "gross profit or sales profit or gross margin is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments."

This is distinguished from things like "operating profit" and other terms defined in accounting.

I was hoping not to get into a stupid debate on all the different types of profit that accountants use when assessing a business.

Hence I just defined my terms and proceeded.

Again, Sheep Mom and others have demonstrated how little they know about this subject by assuming without cause that I was somehow mistaken.

OMG, you don't know who Milton Friedman is? Jesus. Even my middle schoolers know him. What does that say about you? When you, or Henry I am Not A Crook, get a PhD in economics I will be happy to give more weight to what you say. Right now, you are just another whiner who thinks that the world would be so much better if we could confiscate other people's wealth. Don't fool yourself. Your ideas aren't noble they are based on greed and envy.

We do own a business and it's not so simple. For every $1 we pay our employees it actually costs us $1.43 due to taxes, WC, etc., and it would be more if we offered insurance. If we doubled the wages of our employees (and we pay more than minimum wage) without raising the costs on goods substantially we wouldn't be able to stay in business. We are a small business. We don't have big profits to just sock away or enrich ourselves with. I just browsed our books and assuming nothing at all changes in terms of sales and hours worked per employee the rest of the year, our lowest paid employee will gross $30,000, most are between $45,00-$55,000, one employee will get $70,000, and we as owners gross $140,000. There's no way we could double the employees' income without completely eliminating ours and then some. We would have no remaining profits and nothing to put into savings for ordering inventory, store maintenance, any improvements, etc. A lot of (probably most) businesses have similar financial pictures, including the franchisees of major chains.

Sheep Mom Says:

"BTW, I should also point out that your answer to me was completely non-responsive. Any thoughts on what Uncle Milton has to say? I think I will stick with an award winning economist over some guy who publishes a webzine and can no longer trade on the Exchange."

I'll be happy to address Milton AFTER you address my points.

You don't get to dismiss everything, toss up a youtube video and then suggest that I owe YOU a detailed response.

Please recall that you also accused me of not knowing what profit was when in fact you have no idea that in accounting there are different forms of profit that take into account different factors.

Sheep Mom,

Of course I know who Milton Friedman is.

I am simply pointing out your obvious hypocrisy as you dismiss my opinion on a trumped up accusation that I've "never owned a business" as you then ignore a man who we can all verify owns a business... and then post video footage of someone we all know never owned a business.

If you can't see the stupidity in that series of actions I can't help you.

This is why you dismiss my opinion on the basis that "I clearly don't own a business"... yet you proceed to accept the position of someone who we can verify never owned a business and you reject the position of someone we can verify does own a business.

You do realize when you swing, miss again and again, and the catcher throws the ball to 3rd base, you're out, and it's not a home run, right?

Err, no. I'm not even dismissing it, and in the process, pointing out that had you ever been in those positions, you should understand.

I've owned a business, so per your intersectionalism, I'm have the experience and you need to check your presumptions.

I don't care what Friedman owned or not, I care what he said, what he described, and how it worked. You started off with some basic math. You made some erroneous presumptions, and you've been insulting everybody else in here, and projecting more than a drive-in.

Apparently I've got to find some verifiable business owner

You rang?

and then post video footage of someone we all know never owned a business.

Prove that.

The person making the positive claim must provide support for it otherwise no one is obligated to believe it. - Artemis

BunnyGirl,

I just want to point out that this whole discussion regarding minimum wage and specific numbers is in some sense besides the point.

Radwaste contends that is is impossible for a business owner to pay their employees more without it causing the price of goods to go up.

I am contending that this argument is not strictly true.

I agree that much of this discussion is being overly simplified, but that is because people here quickly get bored when you try and bring real facts and numbers to the table.

That being said, let's just make this very simply.

Is it or is it nor possible for you to pay your employees more (even if is is only 1 cent per hour) without having to have an impact upon the cost to your customers?

My contention is that it is possible but that you would take a financial hit associated with that pay increase... that is also the contention of the CEO of business insider.

The others here seems to be arguing that this is impossible (even though the mathematics is pretty self-evident and unassailable).

Unix-Jedi Says:

"Prove that."

You want me to prove Milton Friedman was not a business owner???

He was a professor at the University of Chicago for over 30 years.

He was a very well respected economist and statistician... but he wasn't a business owner.

Exactly what business do you think he owned?

The others here seems to be arguing that this is impossible

Nobody has.

My contention is that it is possible but that you would take a financial hit

[Which you would then (have to) pass along to the customer.]

(And misses all the other massive problems, but if you want to simplify, by all means, lets.)

The person making the positive claim must provide support for it otherwise no one is obligated to believe it. - Artemis

but he wasn't a business owner.

And you repeat the claim.

Exactly what business do you think he owned?

You admit you don't know, and want me to answer for you?

Let's revisit Artemis's claim here... The person making the positive claim must provide support for it otherwise no one is obligated to believe it..

Unix-Jedi,

Let me briefly explain to you why you are full of shit.

When I put forth my argument, you apparently care VERY deeply whether or not I have business ownership or management experience as referenced here:

"You've obviously never owned a company. Nor been in management."

You could care less what I have to say, what the facts I present are, or the formulation of my argument happens to be.

You simply dismiss it out of hand on some trumped up and unverifiable charge.

On the other hand... when it comes to Milton Friedman, someone we know spend his entire career in academia, someone we know wasn't a business owner or manager... then you say this:

"I don't care what Friedman owned or not, I care what he said, what he described, and how it worked."

All of a sudden you don't care if he owned anything... you care what he said, you care about the formulation of his arguments.

In other words, if you like what someone has to say their background is completely unimportant.

On the other hand, if you don't like what someone has to say, you are more than happy to make up details about their background that you can't actually verify in order to dismiss whatever their argument happens to be.

"We [raised the minimum wage] in 2009, that was the last time, and I think there was half a million jobs lost that were attributed to that raise." ~ Terry Lundgren, CEO of Macy's

http://www.businessinsider.com/macys-ceo-speaks-on-minimum-wage-2014-4

Artemis:

That uncomfortable feeling is called a "petard". I don't think it is that new to you.

Of course, you've yet to answer any questions, but I've seen movie theaters with less projection.

Unix-Jedi Says:

"Let's revisit Artemis's claim here... The person making the positive claim must provide support for it otherwise no one is obligated to believe it.."

You sir are an idiot.

Do you even know what a POSITIVE claim is???

Saying that someone never owned a business is what is known as a NEGATIVE claim.

It is like the claim "santa doesn't exist".

Negative claims cannot be proven.

They can only be disproven by counterexample.

WOW... you really are stupid.

Here, please read this and brush up on who has the burden of proof in a debate:

http://en.wikipedia.org/wiki/Philosophic_burden_of_proof

If you can show that Milton Friedman was in fact a business owner I will admit to being wrong.

As it stands there is no evidence he ever owned a business of any sort. His parents on the other hand did own a business when he was a child.

The thing about increasing minimum wage is that any employee in a union will also have their pay increased.

And increasing the pay will also effect the whole food chain as well. If you double the pay of the fast food worker then the butcher in the plant that produces the hamburger meat will want an increase. If he is making $12 an hour now do you think he'll be satisfied just to move to $15? He's going to want $18. Same with the packers in the vegetable producers. Then the truckers making 44¢ per mile are going to want an increase as well.

So giving more on the front end effects the whole chain, not just the minimum wage worker at the fast food joint.

Even the illegals picking in the field will want more money for the simple fact that they still have to pay more to go to Taco Hell.

And then the smaller businesses (single owners and small partnerships) in the chain can't afford to take a loss of profits for their income. They may only have a $1-200K in profits. So doubling the employee costs would leave them with no profit at all.

Just to be absolutely clear about my position in this discussion.

I am neither advocating for or against changes to the minimum wage.

I am only arguing that radwastes proposition that raising the minimum wage inherently devalues the dollar is a claim that has no merit.

That claim is only true if we presume that the increased wages not come at the expense of corporate profits.

This doesn't have to be true.

You could care less what I have to say, what the facts I present are, or the formulation of my argument happens to be.

You simply dismiss it out of hand on some trumped up and unverifiable charge.

On the other hand... when it comes to Milton Friedman, someone we know spend his entire career in academia, someone we know wasn't a business owner or manager... then you say this:

"I don't care what Friedman owned or not, I care what he said, what he described, and how it worked."

All of a sudden you don't care if he owned anything... you care what he said, you care about the formulation of his arguments.

So Artemis/Orion, who has, in the past, vehemently refused to tell us anything about himself or why we should accept his expertise on the myriad subjects on which he asserts an "learned" opinion, expects us to take his arguments on economics and business as seriously as we take Milton Friedman's?

Conan:
expects us to take his arguments on economics and business as seriously as we take Milton Friedman's?

Well, Friedman (purportedly) didn't know anything.....

Conan Says:

"So Artemis/Orion, who has, in the past, vehemently refused to tell us anything about himself or why we should accept his expertise on the myriad subjects on which he asserts an "learned" opinion, expects us to take his arguments on economics and business as seriously as we take Milton Friedman's?"

Exactly what have you told me about yourself Conan?... I don't know where you live, what you do for a living, or why your opinion should trump that of the CEO of business insider.

Which is why I have suggested you forget about me and deal with the arguments put forth by CEO and co-founder of Business Insider.

If you have such a hard on regarding verifiable business credentials then you can't simply dismiss that article which makes the exact same argument I've made.

I happen to like Milton Friedman... but I don't actually think he would disagree with my argument nor the argument put forth by the article from business insider.

The mathematics is sound and disproves Radwastes contention that raising the minimum wage inherently devalues the dollar.

It actually doesn't.

It only devalues the dollar if you add additional constraints that are not in and of themselves required by a hike to the minimum wage.

Not one of you has put forth an argument disputing that.

Also... just to be abundantly clear, I actually believe that debates should be about the facts only, I don't care who you are or anything about you. It is you and others like you who any time someone disagrees with you and presents facts to back up what they are saying suddenly you shift gears and it becomes all about their background.

Incidentally, if you honestly believe that only those with business ownership experience can have a valid opinion on this subject... why even defend Radwastes position?

He doesn't own a business, he works in a field associated with his chosen name.

If expertise is the buy in then why even defend his position, we can just dismiss it on the basis that he works with radioactive materials... he doesn't exactly have a background in economic theory.

But that isn't what this is about.

You don't actually care about personal backgrounds.

That only comes up when you disagree with someone, then it becomes a congressional vetting session over the internet.

If you were so concerned with background expertise being required to enter into a conversation you couldn't involve yourself in this conversation and our previous discussion regarding teaching unless you were a business owner and also a public school teacher.

Something tells me you are a hypocrite.

I actually believe that debates should be about the facts only

That last hoist wasn't high enough for you?

Artemis,

In theory, yes we could pay the employees a little bit more, but not much before we'd have to start raising prices and/or cutting our profits and personal income. Since we don't pay hourly (base salary plus commissions and occasionally also bonuses) the calculations would be a bit different. We have nine regular employees and count our outside support (accounting) as another operating expense. So, if we converted to hourly pay for this calculation we could raise their pay $.50 to $1.00 before we'd have to raise our prices to compensate or start cutting into out own income, but this raise cuts into our profits and makes us less able to make improvements or other things that need to be done with it. If we had more workers and weren't so small but with a similar profit margin we'd be less able to give any sort of pay increase before raising prices because it would have to be spread around further and a 10 cent raise isn't really going to do much of anything for anyone.

I think the amount of the raise people are asking is very relevant to the discussion. Very small raises could be absorbed without much, or maybe no, change to prices or needing to cut staff, but the larger the increase the much more likely it is to have an effect on all areas of the business.

On a related note, we are acquainted with the owners of three local McDonald's restaurants. Their workers are paid $9.50 to $13 an hour (minimum wage is $9.25 here). They are very vocal about complaining they can't afford to give everyone a raise to $15 an hour and up. Between three restaurants they state they make "around $300,000" a year. It's not their only income, but that's beside the point. If everyone gets that substantial of a raise they no longer have an income from the restaurant nor do they have profits to make any sort of changes or improvements nor pay their fees to corporate. Every time McDonald's changes their menus or anything else like that, the owners are responsible for paying to change things in their restaurants, pay for upgraded equipment, etc. If they have no profits because their workers cost more they'll go under when they can't make the upgrades.

As it is, menu prices go up every January from $.50 to $1.50 for a value meal when the state minimum wage goes up. It's now just under $9 for a #7 here.

BunnyGirl Says:

"In theory, yes we could pay the employees a little bit more, but not much before we'd have to start raising prices and/or cutting our profits and personal income."

Thank you for independently verifying exactly what I have been saying.

"I think the amount of the raise people are asking is very relevant to the discussion. Very small raises could be absorbed without much, or maybe no, change to prices or needing to cut staff, but the larger the increase the much more likely it is to have an effect on all areas of the business."

You are absolutely correct. The details do matter and are critically important to consider.

The problem I find I run into when trying to have these discussions is many people have VERY strong philosophical positions when it comes to this issue.

Some people actually believe that any raise to the minimum wage at all, no matter how marginal it might be requires certain economic consequences.

The only way to break down those preconceptions is to take the subject into theoretical territory.

Obviously whatever is true in theory doesn't necessarily apply in practice because as you pointed out, 1 dollar increase in wages does not directly correspond to a 1 dollar cost to the business.

Unfortunately blogs don't make it easy to have rigorous and technical discussions on this topic.

I'm glad that at the very least you can independently validate that the assumptions people are making are not valid.

The economic consequences of any proposed change to the minimum wage will depend critically upon the nature of those changes.

Some changes might be beneficial while others might be detrimental.

To be quite honest, I'm actually not a fan of minimum wage hikes, but not for the reasons you and others might suspect.

Raising the minimum wage only addresses the symptoms of the problem and not the problem itself.

The root of the problem is that wages for the lowest rung employees have become decouples from overall corporate profits and performance.

When a company does well all of the employees should feel the economic impact of that since they all contributed to that good performance.

Similarly, when a company does poorly, all of the employees should feel the economic impact of that as well.

The entire model we currently work with is problematic and results in poorly thought out incentives.

Exactly what have you told me about yourself Conan?... I don't know where you live, what you do for a living, or why your opinion should trump that of the CEO of business insider.

Doesn't matter what I've told you about myself. I'm not asking you to take my argument over Milton Friedman's on faith. You are.

You keep referring to Henry Blodget's opinion piece (by the way, he's not the co-founder of Business Insider) because he agrees with you. And that's the only "expert" you've cited. Give us other experts who say the same thing.

As I've pointed out, the CEO of Macy's disagrees with you. I even provided a link to the article.

Here's an expert from MarketWatchwho says Blodget is wrong. And she provides facts to back up her position.

http://www.marketwatch.com/story/why-henry-blodget-is-dead-wrong-2012-08-24

Unix-Jedi Says:

"That last hoist wasn't high enough for you?"

Unix... you are so dense you can't even distinguish the fundamental difference between these two claims:

1 - There were aliens on Mars 1 billion years ago.

2 - There were not aliens on Mars 1 billion years ago.

Item 1 is what is known as a positive claim. If I wanted to prove that claim I would have to present evidence of that those aliens existed. Perhaps photographic evidence of artificial structures on the surface of the planet which date to the appropriate era.

Item 2 is what is known as a negative claim. Such a claim cannot be "proven" in the same sense that positive claims can be. You can't exactly hand over a photograph of the aliens not being there. One could always claim that you simply took the photo in the wrong spot, or that the evidence degraded over 1 billion years... etc...

When a negative claim is put forth the best we can do is assert that no evidence available suggests that it is the case.

Interestingly, you are unable prove that I don't own a business. Hence if we must presume that Milton Friedman was a business owner sans evidence, then we might as well presume I am a business owner on the same grounds.

I certainly haven't denied owning a business.

But you are just playing games because you don't like having the burden of proof.

In fact most people here just like to spout their mouth off without presenting a shred of evidence and then demand that anyone who disagrees with them provide detailed backing for whatever they are saying.

Let's remember this all started with me asking Radwaste to back up his original claim... something that still hasn't happened and you and others remain keenly focused upon me proving something.

I'm simply saying that what radwaste said was completely unsupported, and it remains so.

Here's another, from Forbes:

http://www.forbes.com/sites/timworstall/2013/05/02/this-is-both-sad-and-bad-from-henry-blodget/

Conan Says:

"Doesn't matter what I've told you about myself. I'm not asking you to take my argument over Milton Friedman's on faith. You are."

What are you smoking Conan.

First let's establish one thing. Exactly what has Milton Friedman said that contradicts my specific argument?

Were does Milton Friedman state that increasing the minimum wage is guaranteed to devalue the dollar?

You are simply hiding behind Milton Friedman's ghost... he hasn't actually stated my claim is incorrect.

You presume he would based upon your understanding of other things he has said.

However, that is just you giving the credibility of Milton Friedman to your own thoughts.

Please cite where he has claimed that minimum wage hikes by definition devalue the dollar.

Please cite where [Milton Friedman] has claimed that minimum wage hikes by definition devalue the dollar. ~ Artemis / Orion

I wasn't the one that specifically said raising the minimum wage devalues the dollar. It does, but the credit for pointing that out goes to another.

====================

http://www.forbes.com/2009/10/16/minimum-wage-labor-economics-opinions-contributors-art-carden.html

Excerpt:

"The minimum wage drives a wedge between the marginal value of an hour of labor and its marginal cost."

=========================

"The consequences of minimum wage laws have been almost wholly bad, to increase unemployment and to increase poverty. In my opinion there is absolutely no positive objective achieved by minimum wages." ~ Milton Friedman

What are you smoking Conan. ~ Artemis / Orion

Reality, Artemis / Orion. You should try it ... if you can handle it, that is.

BTW, your comment was a question and should have been ended with a question mark.

====================

http://www.downsizinggovernment.org/labor/negative-effects-minimum-wage-laws

Excerpt:

In 2006 David Neumark and William Wascher published a comprehensive review of more than 100 minimum wage studies published since the 1990s. They found a wider range of estimates of the effects of the minimum wage on employment than the 1982 review by Brown, Gilroy, and Kohen. The 2006 review found that "although the wide range of estimates is striking, the oft-stated assertion that the new minimum wage research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. Indeed . . . the preponderance of the evidence points to disemployment effects."

Nearly two-thirds of the studies reviewed by Neumark and Wascher found a relatively consistent indication of negative employment effects of minimum wages, while only eight gave a relatively consistent indication of positive employment effects. Moreover, 85 percent of the most credible studies point to negative employment effects, and the studies that focused on the least-skilled groups most likely to be adversely affected by minimum wages, the evidence for disemployment effects were especially strong.

In contrast, there are very few, if any, studies that provide convincing evidence of positive employment effects of minimum wages. These few studies often use a monopsony model to explain these positive effects. But as noted, most economists think such positive effects are special cases and not generally applicable because few low-wage employers are big enough to face an upward-sloping labor supply curve as the monopsony model assumes.

AND

In 2004 a comprehensive review more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent and overall prices by up to 0.4 percent. A 2007 study from the Federal Reserve Bank of Chicago found that restaurant prices unambiguously increase in response to minimum wage increases. And a 2011 study of quick-service restaurants found that two-thirds of the minimum wage cost increases were offset by higher menu prices, and that higher prices rather than cuts in employment and hours was the most important channel of adjustment for this type of firm.

Conan,

Wow... that is kind of pathetic. So instead of us actually discussing the issues and bringing up relevant facts associated with the specifics of what we are talking about you would prefer that you and I just scour the internet searching for people who agree with us and then posting one link after another?

Do you honestly believe I will be unable to locate people who share my position?

Let me know when you actually want to have a conversation... because while you may not be aware of this, there are experts on both sides of this debate.

I'd rather have a discussion with you and see what you might be able to say to alter my perspective.

Apparently you aren't able to do that.

That being said, I know the type of person you are and you'll simply claim that I can't find others who agree with me. So here is one more link. It isn't however a link that necessarily supports my position or your position. It is a link that shows that experts land on different sides of the fence on this issue:

http://thehill.com/policy/finance/283577-experts-debate-the-benefits-of-a-minimum-wage-hike

Now if experts land on different sides of this discussion, it is kind of obnoxious of you and others to dismiss anyone because they disagree with you on the basis that they are ignorant or uninformed.

We can each quote and link to dozens upon dozens of articles supporting our side... but that isn't a discussion.

I think the problem is you realize that you don't actually know enough to call what I am saying into question so you are hoping there is some nugget out there that someone else has said.

The reality is you have failed to even understand my argument.

Let's try an exercise. Can you please describe for me what my argument is so I can decide if it is even worth talking to you about this subject?

My presumption is that you haven't the foggiest clue what my argument is and instead you assume that I am in favor of minimum wage hikes and everything you write is simply a knee jerk response.

Conan Says:

"I wasn't the one that specifically said raising the minimum wage devalues the dollar. It does, but the credit for pointing that out goes to another."

And that right there is the heart of the debate.

None of you have actually proved that it does this inherently.

It actually doesn't.

It only devalues the dollar if other factors come into play.

Those factors are extrinsic to changes to the minimum wage... they are NOT intrinsic to them.

And to reiterate, minimum wage changes are a bad idea, but only because they temporarily treat the symptoms of the problem and do not actually cure the disease.

The disease is that employee wages have become decoupled from corporate profits.

If the two are coupled the actual disease is cured.

A person who is earing 16640 a year is not going to provide for a wife and 2 kids. He is going to provide for himself and 1 of 2 kids. The other person(the wife) is going to earn another 16640 and provide for herself and one kid. Do the math. Suddenly, the available money increases manifold. And $10 for food for a day is on the higher side. I had total food expenses of about $180 in NJ for a whole month when I was cooking everyday. That is as much as one would expect to spend in a month on food. And the rent of $700 shared between 2 ppl means $350 a month on rent for the guy alone. That leaves a lot of money in hand. Utilities average about $45 a month for the whole house which is again going to be split by 2 ppl especially in apartments where heating is covered by the apartment complex in the rent. The net balance is 7850. Add fuel and clothing and car insurance and you can very well save a couple of thousand from the above amount quite easily. And that is as much as ppl can expect from a minimum wage job when they start out. If they work well, they might just move to the next level before they start out to have a family.

Redrajesh,

Where did a wife and kids suddenly appear from?

You have doubled this individuals household income without cause.

However, lets go with if for a moment... let's just invoke the existence of a wife and 2 children.

"Do the math."

I have done the math... I suggest you do the same.

How much is day care for 2 children? Because if both parents are working those children need to go somewhere.

http://www.babycenter.com/0_how-much-youll-spend-on-childcare_1199776.bc

According to this website the average cost of child care per child per year is $11,666.

So after child care they are left with $9948.

Let's now factor in rent of $700 a month and we have $1548 left (and we haven't even paid taxes on this money so there is probably less than this available)

Exactly how is that supposed to cover diapers, baby cloths, and food for 4 people for a year... and again we haven't even factored in transportation.

To be abundantly clear... this leaves 4 dollars per day to feed all 4 of these people.

For people who earn this little it makes more economic sense to have one parent stay home with the kids... but now you have the same problem I described before only instead of 16640 to support 1 person which it could barely do that... it now needs to support 4.

I love how in your budget plan the babies are miraculously self sufficient and don't need child care.

My guess is you haven't the slightest clue how to budget money.

I'll tell you what my position is ... and has been all along.

Raising the minimum wage results in higher costs for businesses which leads to higher prices for consumers and puts the minimum wage earners in the same (or a worse) position than they were in before. It results in inflation and has a deleterious effect on the economy and overall economic stability.

For that argument, I've provided supporting material aplenty from analysts, economists, and CEOs.

You've insisted a miminum wage hike won't raise prices because Henry Blodget said that it's a zero-sum game and rich people and corporations are hoarding money (either parked overseas or in their Scrooge McDuck money vaults).

You've repeated Bloget's assertion that a small raise in wages could be taken out of gross profit, ignoring the effect on net profit and the opportunity costs.

In fact, you've supplied one (and only one) piece of supporting material, an opinion piece from Henry Blodget, a disgraced stock analyst turned Internet opinion piece writer and news aggregator.

Despite the Johnny One-Note nature of your argument, you insist that others are wrong and demand they jump through an ever-increasing number of hoops as your argument to disprove your crumbling argument.

And once again, I've indulged your childish tantrum beyond what's amusing. I'm finished with this one. See ya.

once again, I've indulged your childish tantrum beyond what's amusing.

Conan! What is best in life!

Conan Says:

"You've insisted a miminum wage hike won't raise prices because Henry Blodget said that it's a zero-sum game and rich people and corporations are hoarding money (either parked overseas or in their Scrooge McDuck money vaults)."

As I suspected, you have misunderstood my argument.

I have not insisted that a minimum wage hike WON'T raise prices.

I have insisted that a minimum wage hike in and of itself does not REQUIRE that prices be raised.

My contention is that it is economically POSSIBLE to raise the minimum wage without an associated increase in the price of goods and services.

The reason this is possible is that in principle the increased wages could in principle come at the expense of business profits.

Nothing about this contention is in error. I don't believe for one moment Milton Friedman would disagree with any of this.

What he might say is something along the line of:

"Well, there is no incentive for businesses to behave that way."

And I would agree with him.

Your fundamental problem is you never actually find out what someone is arguing before you jump in full tilt and declare them to be wrong or ignorant.

Sorry to tell you, but you would have been better served understanding my position BEFORE trying to prove that it is wrong.

Also:

"In fact, you've supplied one (and only one) piece of supporting material, an opinion piece from Henry Blodget, a disgraced stock analyst turned Internet opinion piece writer and news aggregator.

Despite the Johnny One-Note nature of your argument, you insist that others are wrong and demand they jump through an ever-increasing number of hoops as your argument to disprove your crumbling argument."

Just to prove the validity of my previous claim that due to the nature of this discussion there is no scarcity of experts on either side of this debate, I found this for you since you seem to like forbes so much:

http://www.forbes.com/sites/timworstall/2013/08/02/the-real-change-in-the-cost-of-a-big-mac-if-mcdonalds-workers-were-paid-15-an-hour-nothing/

"Thus the price is not determined by the cost of production of an item. Which means that, if we raise McDonald’s production costs by increasing the wages of the workers, the price isn’t going to change. For it’s not production costs that determine prices: it’s competition that does. Another way to put this is that McDonald’s is already charging us the absolute maximum that it can for its current level of sales. Thus it cannot raise its prices if its production costs go up."

I could find many more similar articles (just like you could if you were actually looking for information contrary to your own opinion).

However, as I said before, you would simply declare I didn't provide one because I couldn't provide one.

I can... I simply see no point when I would rather discuss the issue.

Conan,

Since I am about to take your argument apart from first principles I don't expect you will have anything to say, however I do feel it is important to debunk the following claim:

"Raising the minimum wage results in higher costs for businesses which leads to higher prices for consumers and puts the minimum wage earners in the same (or a worse) position than they were in before. It results in inflation and has a deleterious effect on the economy and overall economic stability."

We can actually test this hypothesis in a rudimentary manner.

We can look at the historical consumer price index data available here:

http://www.inflationdata.com/inflation/consumer_price_index/historicalcpi.aspx?reloaded=true

And compare recent time periods where the minimum wage remained unchanged versus when it was increased.

From the time period from 1997-2007 the federal minimum wage was $5.15.

From 2007 to 2013 it went through several increases to the current rate of $7.25.

Now all we need to do is compare the average rate of inflation based upon the CPI during these time periods.

In 1997 the CPI was 160.5
In 2007 the CPI was 207.3
In 2013 the CPI was 233.0

This yields an average inflation rate of ~2.5% during the time period when the minimum wage was unchanged and an average inflation rate of ~2.0% during the time period when the minimum wage was recently hiked.

In other words... there was LESS inflation during the time period when the minimum wage was increased as compared to the time period when it was unchanged.

Go figure... it seems like during recent times at least increases to the minimum wage are correlated with reduced inflation.

This would seem to suggest that the first doesn't necessarily cause the latter.

"My guess is you haven't the slightest clue how to budget money."

yeah right, no wonder I did my first job at 75 dollars a month, my next job at 300 dollars a month and I am still alive and have bought my own house and paid off 80% of the mortgage after being in the workforce for 13 years.

And if you don't even bother about a wife and kid, 16640 a year is pretty good money for a single guy, though by the time I got married, I jumped the scales and got a job paying me more than $30000 a year.

Just when I think I"m out, this idiot drags me back in.

My contention is that it is economically POSSIBLE to raise the minimum wage without an associated increase in the price of goods and services. ~ Posted by: Artemis [Orion] at September 6, 2014 8:48 PM

Sure, okay, in a fantasy world in which companies that employ large numbs of minimum wage workers have unrealistically high net profit margins, it's possible to raise the minimum wage without an associated increase in the price of goods and services.

But the real world doesn't work that way. Industries with thin net profit margins and large work forces cannot absorb even a small a wage increase without raising prices.

The average net profit margin in the retail grocery industry is less than 1%. That means the average grocery company, after paying all costs, keeps less than a penny for every dollar spent in its stores.

And any increase in the minimum wage will trigger UFCW-mandated increases in the average wages for unionized grocery employees to keep their wages a certain percentage above minimum wage.

That means that any increase in the minimum wage will increase costs to the point the grocery company has to raise prices to cover the additional costs. And that means everyone's grocery bill is going up.

As a result, if you're a minimum wage worker, you're on your way to being in exactly the same position (or worse) that you were in before the minimum wage increase gave you "more money." That is, if the company doesn't decide to minimize the necessitated price increase by laying off people to reduce labor costs.

While McDonald's franchises don't necessarily operate on the razor-thin net profit margins on which grocery companies operate, their margins (depending upon the franchisee) can be pretty thin, especially in the early years when the original financing deals must be paid off. Meaning, again, that an increase in the minimum wage would, by necessity, result in a significant increase in costs and require prices be raised to cover the additional costs.

==============================

Conan! What is best in life! ~ Posted by: Unix-Jedi at September 6, 2014 8:40 PM

Robert E. Howard's Cimmerian hero never had to contend with the quicksand that is Artemis / Orion's insistence that his fantasy is reality.

Here we go again.

We can look at the historical consumer price index data.... ~ Posted by: Artemis [Orion] at September 6, 2014 9:43 PM

The CPI tracks spending habits and is, therefore, an inaccurate measure of real inflation.

http://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/

Take an Econ 101 course and get back to us.

Conan,

Cut the shit and actually say something useful.

You have made a testable claim.

It is time to test it and see if it holds water.

Your claim is that increases to the minimum wage directly drive inflation.

We have 2 time frames to work with here.

Time Frame 1 = 1997-2007
Time Frame 2 = 2007-2013

If you don't like CPI as a measure (and of course you wouldn't because it shows you are in error)... what data set or metric shall we use to test your claim.

It is time for you to put up or shut up.

What data set shows your prediction to be an accurate representation of reality?

Oh... also, before you blather on and on about how I need to go back to econ 101... historical inflationary data is typically tracked using CPI by experts:

http://www.inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx

And I quote:

"The Inflation rate is calculated from the Consumer Price Index"

That is how the calculation is usually performed.

You are just pitching a fit because it shows that you are unequivocally wrong.

Conan Says:

"Sure, okay, in a fantasy world in which companies that employ large numbs of minimum wage workers have unrealistically high net profit margins, it's possible to raise the minimum wage without an associated increase in the price of goods and services.

But the real world doesn't work that way. Industries with thin net profit margins and large work forces cannot absorb even a small a wage increase without raising prices.

The average net profit margin in the retail grocery industry is less than 1%. That means the average grocery company, after paying all costs, keeps less than a penny for every dollar spent in its stores."

Great... so you AGREE with me.

Maybe if you didn't have such a hard on for trying to prove me wrong instead of actually comprehending what I am saying we wouldn't always end up in this stupid pissing contest.

As I said before, nothing about my claim is factually in error.

Also, I love how you cherry pick the grocery story industry which is known to have razor thin margins.

Wasn't this discussion primarily about the fast food industry?

The data I have seen suggests that the profit margin for McDonalds is ~20%.

That is a pretty far cry from the 1% value you are tossing around.

So I guess we are in agreement again... a company like McDonalds could in principle afford to pay its employees more without affecting consumers at all.

Redrajesh Says,

"And if you don't even bother about a wife and kid, 16640 a year is pretty good money for a single guy"

I've already run the numbers for you so I am going to ask for you to provide an explicit budget.

I'm even going to be generous with you and state that that $16640 will net you $15000 after all federal and state taxes (generally someone would actually have less than this).

Go ahead and demonstrate how a single person with no other resources (i.e., family financial support) can build a future on this.

You are vastly overestimating how far that kind of money actually goes.

Just to put things into perspective, I put away more money than that in my 401K each year.

How can you define $15000 as "pretty good money" when there are people like me who save more than that in a retirement account that I won't touch for decades.

$15000 is not "pretty good money"... it is enough to keep you off the streets and enough to keep you nourished so long as you don't take vacations and don't get sick.

Conan,

I have decided once again to do your work for you because you appear incapable of actually providing support for your own claim.

While CPI is the most common metric for calculating inflation... you apparently do not like it because it shows you are wrong.

You haven't actually provided an alternative metric, so I will use the GDP deflator metric, which can also be used to calculate inflation.

The historical data is provided here:

http://www.multpl.com/gdp-deflator/table

This data shows that from 1997-2007 the average annual inflation rate was ~2.25%.

It also shows that from 2007-2013 the average annual inflation rate was ~1.55%.

In other words... you are STILL wrong.

In fact this alternative metric suggests you are MORE wrong than the CPI metric suggested.

Your claim is speculative hogwash with no data backing it up... it is simply your uninformed opinion.

All of the data presented demonstrates your claim to be false at least as far as the last two decades are concerned.

I'll wait for you to weasel your way to find some criticism of the GDP deflator all the while never once mentioning a viable metric you approve of for calculating historical inflation rates.

You seem much more concerned with proving me wrong about something than actually searching for the truth.

Also, I love how you cherry pick the grocery story industry which is known to have razor thin margins. ~ Posted by: Artemis [Orion] at September 7, 2014 10:41 AM

Okay, let's use the restaurant industry. Industry-wide, its average profit margin is 2.4%.

====================

Wasn't this discussion primarily about the fast food industry? ~ Posted by: Artemis [Orion] at September 7, 2014 10:41 AM

It started that way, but evolved (as good discussions do) to the net effect on workers and consumers of raising the minimum wage.

The point made was that raising the minimum wage increases costs, which are passed to the consumer in higher prices (inflation), and leave minimum wage workers in the same (or worse) condition a than they were.

Can't think of any industry to better illustrate that than the retail grocery industry that you say I cherry-picked. Everybody buys food and the work can't be off shored or easily automated - so the price increases must be borne by the consumer (in the form of higher prices) and/or the worker (in the form of layoffs).

====================

You are just pitching a fit because it shows that you are unequivocally wrong. ~ Posted by: Artemis [Orion] at September 7, 2014 10:35 AM

No, I'm trying to explain to you the reality that the CPI does not effectively measure the actual price borne by the consumer for the market basket of goods it claims to use as its basis.

Each time the CPI is calculated, changes are made to the market basket based on availability of goods and significant price changes in them - i.e., if butter prices rise significantly and butter was part of the previous CPI calculation, the BLS analyst substitutes margarine (the BLS simply assumes the consumer will do the same).

Many industries, and the even government, use the CPI as a proxy for inflation. I've done it myself in several analyses that I've done over the years. However, I always caveated the analyses with a footnote reminding recipients that the CPI is not a complete measure of actual inflation.

And, as the article I linked points out, the government that creates the CPI also has a strong motive to keep it low since many of its entitlement payments are indexed to the CPI.

There are several official alternative CPI measures, including the CPI-W, the CPI-E, the C-CPI-U, etc. which have different weightings and vary wildly in their outcomes.

The difficulty with finding and using a non-BLS measure of inflation is that the government promulgates the CPI and enforces its use over a wide variety of programs and agencies. Non-government agents follow suit to ensure compliance with government regulations and to be in sync with government-published numbers.

John Williams, of ShadowStats.com, has proposed an alternative CPI using the BLS methodology from 1990. Critics have maintained that his methodology overstates the rate of inflation (while critics of the BLS maintain the post-1990 BLS methodology understates inflation).

So you see, simply using the CPI as a measure of inflation is much more complicated than you seem to think. You'd learn that in Economics 101.

====================

So I guess we are in agreement again... a company like McDonalds could in principle afford to pay its employees more without affecting consumers at all. ~ Posted by: Artemis [Orion] at September 7, 2014 10:41 AM

Not in agreement at all.

Your position is willfully simplified. It ignores the reactions of the market and the effect on stock prices of depressing profits. It ignores the fact that a drop in stock price can adversely affect the company's interest rate on borrowed funding or ability to fund new projects via equity funding. Stock price is often used as an indicator by the lender of the value and stability of a company; as well as being used as collateral.

If a company depresses profits to pay minimum-wage workers more, the investors may shy away. When investors shy away, the stock price goes down. When the stock price goes down, lenders see the company as a higher risk and raise interest rates. In order to service higher debt costs, prices must be raised or profits further depressed. And then more investors shy away ... and so on.

====================

The data I have seen suggests that the profit margin for McDonalds is ~20%. ~ Posted by: Artemis [Orion] at September 7, 2014 10:41 AM

For McDonald's corporation, sure. But the individual franchisees may not be making 20%. They are most likely making much thinner margins.

An increase in the minimum wage could have a significant impact on their bottom line.

Answers.com says the average net profit for a franchise is 10%, but it doesn't give the standard deviation so I can't tell if there are franchises living on 1% or not. The growing popularity of McDonald's dollar menu suggests that the net profit for the franchise would be going down.

According to the New York Times, franchisees are already struggling with labor costs due to the growing popularity of the company's dollar menu. Imagine if the government piles a higher minimum wage on top of that.

====================

It's Sunday afternoon here. There's football on and things to do outside.

You're nothing but a time suck that I don't need.

See ya.

Conan,
You are correct about so many things here, but especially your last statement...you have more valuable things to do than argue with someone who will not listen or learn.

And Artemis,
Good luck with the unicorn petting zoo that I am sure will be part of your new Utopia! Send me an invitation when you get it off the ground and running. Remember, don't just stick to the white unicorns... the pink and blue ones are pretty too!

it is enough to keep you off the streets and enough to keep you nourished so long as you don't take vacations and don't get sick.

And that is what a minimum wage is supposed to do. It is not supposed to pay for vacations to Europe or Brazil or pay for a mercedes benz or pay for a palatial house or anything else. And I am saying $15k because this is USA which has such hopeless public transport. If it were Europe, I would be even less generous because of their universal medical care and their public transport.

And you want calculations, here they are:

$15k a year is 1250 a month
700 rent split between 2 ppl = 350
50 utilities split bet 2 ppl = 25
200 for food = 200
car insurance(liability only)= 50
fuel(travel of about
10 miles/day
and mileage 30mpg and fuel $4/gal
and 22 working days) = 30
Internet/telecommunication = 30

Total = 685
Car payments(if any mortgage for a used car costing $3000. Payments for 1 year
) = 300

Total2 = 985

He still has 265 left over for one month. That is
3180 for the year
Clothing for whole year = 200
Medical for the whole year = 500
Car maintenance for the whole year = 500

He still has 3180 - 1200 = 1980 left over at the end of one year after which his monthly car payments end, so he gets another 3600 in hand after that.
And if he did well, he probably gets $9.5 in hourly wages after the first year.

You think $1250 is not enough to live on? What do you expect, a guy on minimum wage to stay alone in a $1500/month rental apartment, have a brand new cadillac escalade and eat out everyday in gourmet restaurants? I've pretty much lived at near minimum wage after completing school for the first couple of years after which I experienced a quantum jump in the pay I got and made my life luxurious. But I was not starving for those couple of years when I was at near minimum wage. I never took a vacation for those two years, I never watched a movie(I never watch movies even now, that is a different matter altogether) and avoided a whole lot of other expenses which are not necessary for comfortable living. Like I said, the minimum wage is not something for you to live a luxurious life, it is something to provide you food, decent clothing on your back and reasonable enough accomodation to keep you off the streets and enough transport for you to get to and from work and just make sure that you don't have to lick someones boots to survive.

Artemis, if you would like a real world example, here's one for you. Currently I am in school, and working two jobs to support myself and pay for said schooling. Years ago, at the beginning of my working career, I managed, through hard work, to raise my wage from the $5.35/hr Minimum wage I started at, to $5.85/hr at my first job, then at the second one I got up to $6.25/hr. However, at the same time, costs of goods went up dramatically because shortly after I got the raise to $5.85/hr, the minimum went up to $5.85/hr. I was lucky enough to find a job that let me get above that minimum, even though the gap wasn't as large as the previous one I had at the old job. Then, at another job, I ended up earning $7.50/hr initially, while the minimum wage went up to its current rate of $7.25. My purchasing power decreased again. My pay per hour was basically staying stagnant and decreasing in its value due to the increases in minimum wage. Like I said, right now I am in the process of acquiring the skills I need to earn much greater than the minimum wage, however, if the minimum wage were raised to $15/hr starting in 2015, the most likely result would be I would lose one or both jobs (and I already have my hours cut under 30 at one because of the loveliness of Obamacare), or have my hours severely curtailed, down from the 29.5 at one right now, and 25-35 at the other. I would probably also lose my health insurance, which isn't great, but far better priced than even the bronze or catastrophic plans Obamacare offers, and I would definitely lose my 6% 401(K) match at the one job and the pension plan funds I've put in at the other. It is people like me, who currently earn $3-5 above the minimum wage, who would be the absolute most hurt by this hike, and if they have any sense, should be completely against it.

All of this noise has resulted from Artemis's being unable to realize that the dollar is used to purchase labor, and (he?) has never attended an algebra class.

Wow.

X dollars = hour of labor set by market? Dollar and labor have equivalency based on market value.

X dollars = hour of labor set by government? Dollar and hour have equivalency set by government.

If you cannot make the distinction, you're wasting everyone's time.

https://fbcdn-sphotos-a-a.akamaihd.net/hphotos-ak-xfa1/v/t1.0-9/10419572_825402370853227_8937423581094327110_n.jpg?oh=445e201b047a270fdc7c17a4d46de528&oe=54A4253E&__gda__=1420044808_b05eb8838fc5544576b0acc9736b0f20

Conan,

Just a few points that I hope will make it clear why it isn't your time being wasted, but rather my own.

Discussing anything with you must be what it is like to hold a conversation with someone suffering from severe schizophrenia.

Your discourse is completely incoherent, you actually make opposing claims within the span of a single post.

For example, you start off saying this:

“It started that way, but evolved (as good discussions do) to the net effect on workers and consumers of raising the minimum wage.”

As a defense for why you suddenly cherry picked an example that was never under discussion while all but ignoring the actually specifics that existed within the conversation.

But according to you, that is just what happens within “good discussions”… hence we must conclude since that is what took place you consider this to have been a “good discussion”.

Yet you end your rant with this:

“You're nothing but a time suck that I don't need.”

Which would suggest that this was in fact a bad discussion.

You have a very nasty habit of constantly trying to have it both ways.

Now for the meat of the discussion:

“Many industries, and the even government, use the CPI as a proxy for inflation. I've done it myself in several analyses that I've done over the years. However, I always caveated the analyses with a footnote reminding recipients that the CPI is not a complete measure of actual inflation.”

Right… it is the STANDARD metric for measuring inflation.

That is why I used it… that is why most experts use it.

Yet you took it upon yourself to criticize me for lacking economic sophistication on the grounds that I used the method that everyone uses.

Yes it is a short hand… yes it has flaws… but it is worlds better than the alternative you have presented with data that we can all analyze independently (i.e., no alternative at all).

“There are several official alternative CPI measures, including the CPI-W, the CPI-E, the C-CPI-U, etc. which have different weightings and vary wildly in their outcomes.”

Great… and which one of these backs up your claim???

I have done the calculation using two distinct metrics for measuring inflation over the relevant time periods.

In both cases your claim fails to hold up.

In both cases the data suggests that you are wrong.

You haven’t presented one shred of independently verifiable data that backs up what you are saying.

If you had such data you would have shared it by now because you have such a hard on for being “right” when it comes to any discussion with me.

I am simply following the data and the data suggests as usual that you’re reasoning is seriously flawed.

If you present data that supports your case you might convince me otherwise, until then I must invariably conclude that you are talking out of your ass.

Please present the data that backs up your claim that increases to the minimum wage enhance the rate of inflation.

Redrajesh,

You seem to be having difficulty addressing the challenge:

"Go ahead and demonstrate how a single person with no other resources (i.e., family financial support) can build a future on this."

That is what we are talking about. A single person supporting themselves on minimum wage.

Yet every time you put together a budget you suddenly invoke the existence of a second person... someone else to cut the expenses in half and double the earnings.

You do it instantly as you did here:

"And you want calculations, here they are:

$15k a year is 1250 a month
700 rent split between 2 ppl = 350
50 utilities split bet 2 ppl = 25"

I will take this as evidence that you very well know that a single person on minimum wage really can't support themselves.

Your model for living on minimum wage requires people being paired off to make it.

In other words... they cannot be financially independent.

That you would call a wage that requires financial dependency upon another person "good money" is quite bizarre.

From my perspective, if you are not earning enough to cover all of your own bills on your own, then you are not earning "good money".

Also... while we are having an Econ-101 lesson let's get a few things straight.

The cost of goods is not determined by the wages of the lowest paid workers.

The cost of goods from an Econ-101 perspective (I know... simplified, but I don't get the impression I am actually talking with experts here) is determined strictly by the supply of that good and the demand for that good.

Factors such a prices elasticity of course come into play, but a hamburger is not exactly an inelastic commodity.

Those who argue that raising the minimum wage would drive up the cost of those goods are in essence arguing that when the lowest wage earners earn more either the supply of hamburger meat will drop... or the demand for hamburgers will increase.

There is no reason to believe either of these things would be true.

If anything, paying them more might drive demand for fast food downward because they can now afford higher quality alternatives, which would have a deflationary pressure on the cost of those goods.

To put it succinctly... your argument is dramatically oversimplified as well.

The argument that increasing the minimum wage will necessarily result in enhanced inflation is overly simplified as well.

That is precisely why I objected to it... it lacks nuance, it lacks sophistication.

I used simple examples to show why that equally simple notion was hopelessly flawed.

What is sad is that many here only see simplicity in the counterarguments but utterly fail to see the problems with their own overly simplistic notion of how our economy functions.

Those who argue that raising the minimum wage would drive up the cost of those goods are in essence arguing that when the lowest wage earners earn more either the supply of hamburger meat will drop... or the demand for hamburgers will increase.

That is an assine oversimplification.

Lets say I have 10 employees at a 40hr/50wk earning $5 per hour, an at the end of the ear if nothing goes wrong I net $10,000 in profits.

Now lets say I have to pay them $8

5*40*50 = 10,000

8*40*50 = 16,000

That takes my yearly profits from $10,000 to $4,000. A 60% reduction in my margins.

And that not even accounting for the increased cost in payroll taxes, 401k matching.

Am I supposed to just eat that cost so you can feel better about yourself?

What happens when there is a grease fire and I no longer have the reserves to pay for new equipment or repairs while waiting for my insurance to pay out?

So what other choice do I have but to raise prices in order to try and maintain enough of my profit margin to keep my doors open?

Yet you took it upon yourself to criticize me for lacking economic sophistication on the grounds that I used the method that everyone uses. ~ Artemis [Orion]

Yes, you used the most common method, but without showing that you understood the implications.

And when someone pointed out the weaknesses of the CPI's methodology (especially for a discussion like this one) you got defensive and pitched a temper tantrum, insulting everyone who disagreed with you.

You should have defended your choice with a sophisticated argument in favor of using the CPI. You should have acknowledge the market basket methodology weaknesses and defended your use of the CPI despite them. You didn't. You simply starting shouting about it being the STANDARD and calling everyone who pointed out its weakness an idiot.

I've had to defend my use of the CPI as a measure of inflation in analyses in the past and have successfully done so. You could have, too, but chose not to ... or lacked the ability to.

That demonstrated lack of understanding, and not your initial use of the CPI, is why I accused you of lacking economic sophistication.

==============================

While the CPI is the most widely used measure of inflation, it is not the only one.

For example, the Federal Reserve Board and the Congressional Budget Office use the PCE deflator, which has its own set of issues.

As for the GDP deflator, you so proudly used earlier? It reports an inflation rate even more artificially low than the already problematic CPI and is used primarily by those with a vested interest in having a low inflation rate.

==============================

And no, the minimum wage is not the only driver of inflation. But it is one driver.

There are so many drivers that ascribing the overall inflation rate to one cause, or casually dismissing one cause, is foolish.

Higher minimum wages do contribute to increases in inflation.

From WiseGeek:

So we know that inflation can have a detrimental effect on the real spending power, but does a raised minimum wage cause inflation? Yes and no. From an economic standpoint, inflation can be caused by any number of new or increased costs of production, including an increase in workers' wages. If a company must increase the amount it pays its workers by several dollars, there is obviously a new expense that must either be absorbed by the company as the cost of using human labor or passed on to customers in the form of higher prices.

Economists call this phenomenon cost-push inflation. An increase in the federal minimum wage did create an increase in production costs, which subsequently resulted in an inflated price for consumers. But critics of the cost-push inflation argument suggest that companies can always adjust their workforce to compensate for a mandated increase. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

Take note of "companies can always adjust their workforce to compensate for a mandated increase." That "adjust" means fewer hours, increased automation, layoffs, decreased hiring, decreased benefits, etc. None of which is good for workers at the bottom of the economic ladder and none of which results in more money in their pockets.

All of those adjustments are consequences of raising the minimum wage that have been pointed out in this discussion by people other than you.

==============================

The cost of goods is not determined by the wages of the lowest paid workers. ~ Artemis [Orion]

The COGS (Cost of Goods Sold) can include labor costs - usually only those specific to the manufacturing process. In a retail industry, it usually refers to the cost of the inventory.

Labor costs are drivers of the final price - especially in labor-intensive industries with large numbers of low-paid employees ... like retail grocery and restaurants.

In addition, union contracts often have a minimum wage rider - meaning any increase in the minimum wage triggers a corresponding increase in union wage rates (that means higher labor costs for unionized companies).

==============================

While we're at it, let's look at some drivers of inflation:

There are different drivers of overall inflation:

• Demand Pull Inflation: Demand increases faster then supply so prices rise as people are willing to pay more for scarce goods.
  
• Cost Push Inflation: Increases in the price of process inputs increase the prices of finished goods.
  
• Wage Push Inflation: Increases in wage rates increase the prices of finished goods.
  
• Imported Inflation: Depreciation in exchange rates make imports more expensive.
  
• Core Inflation: Inflation caused by non-volatile factors.
  

Wage Push Inflation? That means that inflation is driven, at least in part, by higher labor costs. Hmmm. That sounds like something said earlier in this thread and mocked by Artemis [Orion].

==============================

Back to the CPI:

According to the Heritage Foundation, the CPI suffers from several serious biases:

• It inadequately accounts for changing consumption patterns (such as Americans purchasing more smartphones as prices fall),
  
• It does not account for savings when consumers shift to less expensive retail outlets (such as Wal-Mart or online stores),
  
• It takes several years to incorporate new products (such as the iPhone) after they are introduced—precisely the time they tend to fall rapidly in price, and
  
• It inadequately adjusts for quality improvements in goods and services.
  

Holy bias, Batman. That means the CPI is not a perfect measure of inflation.

==============================

In the end, Artemis/Orion, you've failed to disprove my initial assessment: increasing the minimum wage rate increases labor costs, which drives businesses to alternative means of production where available (automation, off-shoring, etc.) thus lowering the number of employed people and, in the end, raising prices for consumers and putting the minimum wage folks in the same (or worse) situation than they were in before the increase.

In low margin, labor-intensive industries unable to automate or off-shore, raising the minimum wage increases costs which, by necessity, are passed to the consumer in the form of higher prices (inflation).

With higher prices, consumers then economize - they find substitutes for items they used to purchase or adjust their consumption patterns - i.e., shop Target instead of Macy's, iron shirts instead of sending them out, buy smaller packages, buy store brands instead of name brands, buy margarine instead of butter, or do without.

The CPI assumes such economizing in its methodology, which depresses the actual rate of inflation.

However, despite the depressed inflation rate reported by the CPI, that economizing doesn't mean the consumer isn't feeling an inflationary pinch.

That is an assine oversimplification. ~ Posted by: lujlp at September 8, 2014 10:48 PM

That's par for the course for Artemis [Orion].

Wow, Conan. Nice job.

Lujlp Says:

"Am I supposed to just eat that cost so you can feel better about yourself?

What happens when there is a grease fire and I no longer have the reserves to pay for new equipment or repairs while waiting for my insurance to pay out?

So what other choice do I have but to raise prices in order to try and maintain enough of my profit margin to keep my doors open?"

And this right here explains why it is actually you and the others here don't actually comprehend economics.

A company does not choose to keep it's prices artificially low.

A company will keep the prices of it's goods at a set level so as to maximize profits.

It is this price that is determined by the competing factors of supply and demand.

If I raise the cost of labor but leave the supply and demand factors of the market alone... adjusting prices will NOT provide me with additional revenue to make up for the increased cost of labor.

If that were true it would imply that I was not maximizing my profits in the first place.

It would imply that I could have charged more but decided not to make as much money as I could in the market.

The reason your argument is so piss poor is that you really don't get it.

The problem with raising the minimum wage isn't so much that it drives inflation... it is that if the cost of doing business increases substantially enough those companies can be put at risk for going out of business entirely.

The companies can't just decide to create more revenue out of thin air.

Think of it this way... if the cost of labor for a fast food joint was raised to the point where the owners felt that they would need to charge $100 for an order of french fries... the consequences wouldn't be everyone just biting the bullet and purchasing the $100 fries.

Fast food is an elastic good... if such a thing were to happen the company simply wouldn't be able to survive.

You're presumption is that a company can simply choose to make more money to cover the costs of labor by raising prices. Anyone with even the slightest understanding of business knows that this assumption is false.

Conan Says:

"You should have defended your choice with a sophisticated argument in favor of using the CPI. You should have acknowledge the market basket methodology weaknesses and defended your use of the CPI despite them. You didn't. You simply starting shouting about it being the STANDARD and calling everyone who pointed out its weakness an idiot.

I've had to defend my use of the CPI as a measure of inflation in analyses in the past and have successfully done so. You could have, too, but chose not to ... or lacked the ability to."

And this right here is why you are full of shit.

I used a completely acceptable method for analyzing inflation.

One you admit to having used yourself and defended using.

That being said you know very well that it was valid for this analysis, yet instead of accepting the implications that you were in fact wrong... you levy a fabricated criticism.

You admit that I could have defended the use of the CPI... you admit that if you were in my shoes you would have said some magic phrase that would have made it's usage acceptable.

In other words... you knew that I was correct and decided to criticize the method anyway.

You sir have no integrity.

An honest person would have admitted that in light of the data that their assumption seems to have been flawed.

Instead you decide to play games and then tell me that I am the one wasting your time.

Artemis:

700 rent split between 2 ppl = 350
50 utilities split bet 2 ppl = 25

Haven't you heard of roommates? Can't you live with roommates for a couple of years? I lived with them for 3 years

And you want a cheap apartment? there are apartments even in NJ which are just $400...just that the areas are high crime rate areas.

Even cheaper, stay in someones basement at a low rent(probably share the basement with someone as well just like I did once)

Conan,

Also, by the way... the core reason why CPI is perfectly adequate for this analysis is that even if there are legitimate criticisms for using this metric as an absolute measure of inflation, for the purposes of this discussion all we are interested in are relative measures of inflation.

For this purpose CPI is perfectly suitable.

It simply does not matter if CPI determines the rate of inflation to be 1.5% when in reality it is 1.8%.

All that matters is if the relative rates are legitimate (i.e., if a higher CPI rate is correlated with a higher true inflation rate). In this arena CPI has no issues.

What we are interested in measuring is whether or not the rate of inflation during a time frame when the minimum wage was frozen is higher or lower than during a time frame when the minimum wage was being raised.

This exercise is analogous to trying to determine which of two sealed containers weighs more.

Ultimately we do not care what the actual weight is, we only care about the relative weight.

As a result if we used a poorly calibrated scale we could still determine which container was heavier.

Offering criticism that the absolute weights will not be completely accurate misses the point entirely.

And yet you seem to be claiming that you knew that your criticism missed the point... you apparently missed the point on purpose as some sort of a test to see if I could explain to you why you were wrong.

As I have said many times before, you aren't interested in facts or truth... you are only interested in one upping me in an argument.

I am sorry that you keep failing.

Redrajesh,

Here is the crux of the problem. First you said this:

"16640 a year is pretty good money for a single guy"

Now you are saying this:

"Haven't you heard of roommates? Can't you live with roommates for a couple of years?"

A person whose earnings are so low that they MUST have additional financial support from another person is not earning good money.

What exactly would you define as bad money if good money is being financially dependent upon another person?

Redrajesh,

Now that I think about it, maybe it is just a matter of perspective.

I know for me, if I was earning so little that I absolutely needed a roommate just to make ends meet I would consider myself to be poor.

And yet you are defining a salary of ~16000 as "good money".

So let's take our perspectives out of the picture.

You keep mentioning New Jersey so let's take that as a test case and look up what the poverty line is. Here is a relevant article:

http://www.nj.com/politics/index.ssf/2013/09/poverty_in_nj_reaches_52-year_high_new_report_shows.html

"The report — the seventh issued by Legal Services — defines being poor in New Jersey as a family of three making less than $37,060."

Please note that before you were talking about a family of 4 that earned ~$32,000 and defined that as "good money".

Just to show you how ridiculous your perception happens to be on this issue... you have defined pretty serious poverty as "good money".

I think you are a little out of touch.

Conan Says:

"The CPI assumes such economizing in its methodology, which depresses the actual rate of inflation."

I really don't think you have a good understanding of what we are interested in measuring.

You keep harping on and on about how CPI is not a perfect measure of the ABSOLUTE rate of inflation.

All the while you conveniently ignore that all we are interested in is the RELATIVE rate of inflation.

That CPI has a characteristic behavior to depress the "actual rate" of inflation doesn't matter when we are measuring the relative inflation rates.

Your argument is analogous to someone saying that they can't tell if one object is heavier than another unless their scale has been calibrated by NIST.

Someone who makes such an argument is a moron.

Fast food is an elastic good... if such a thing were to happen the company simply wouldn't be able to survive.

That's right.

Wait, maybe you do understand...

You're presumption is that a company can simply choose to make more money to cover the costs of labor by raising prices. Anyone with even the slightest understanding of business knows that this assumption is false.

... Nevermind.

...for the purposes of this discussion all we are interested in are relative measures of inflation. ~ Artemis [Orion]

So, a temporary dip in one aspect of the CPI drops the overall inflation rate and you're okay with the fact that other prices are permanently rising. You think, because the overall inflation at a point in time was low, everything's peachy?

Keep in mind that 2009, a year you cite as one of [relatively] low inflation despite a minimum wage increase, was at the bottom of the housing bubble collapse. OER was declining vs. prior years then. And housing costs are not strongly affected by hikes in the minimum wage. And housing is a relatively heavily weighted component of the CPI.

Housing, since early 2009, has been a negative sector for the CPI. Yet every other sector including food, energy, medical care, and education has been solidly above zero.

Housing, being the largest component of the CPI (roughly 42%), is off-setting the other growing sectors. Hence my criticism of your use of the overall CPI to judge the effect of a minimum wage hike on inflation.

Housing is the largest (and most heavily weighted) item in the CPI market basket. And when those expenses rebound to their former levels and prices on other goods stay higher, you'll still sit there and smugly [but erroneously] maintain that minimum wage hikes don't contribute to inflation. Because 2009!

==============================

Here are the components of the CPI (as you can see, a hike in the minimum wage will not have the same effect on each of them):

• FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals and snacks)
  
• HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture);
  
• APPAREL (men's shirts and sweaters, women's dresses, jewelry)
  
• TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
  
• MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
  
• RECREATION (televisions, cable television, pets and pet products, sports equipment, admissions)
  
• EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories)
  
• OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses)
  

==============================

One you admit to having used yourself and defended using. ~ Artemis [Orion]

Yes, I've used it; in different companies and different industries.

In one instance, I was asked if I thought the CPI was a good measure to use, citing many of the weaknesses I have cited here. I said it was adequate in this case because the substitution bias was relevant to our industry as people would change products or sizes with higher prices on fungible items and I wanted to capture that effect in that analysis.

In another, I used an alternative method and was asked why. I explained that the substitution bias in the CPI gave a lower rate of inflation than customers for our brand would experience. Switching to a cheaper competitor or foregoing a purchase was built into the CPI and we needed to understand the inflation rate facing our brand (i.e., I needed to account for the substitution bias).

==============================

You admit that I could have defended the use of the CPI... you admit that if you were in my shoes you would have said some magic phrase that would have made it's usage acceptable. ~ Artemis [Orion]

No. I know now that you couldn't have defended your use of the CPI as a measure of inflation in this discussion, because you don't understand the concept you're trying to use.

Understanding a concept includes understanding its weaknesses and flaws. All you can do is stamp your feet and insist it's the STANDARD.

==============================

One other aspect of your argument that minimum wage hikes don't cause inflation that you're ignoring is how many jobs were lost in an effort to keep prices as low as possible?

According to the Macy's CEO, "We did this in 2009, that was the last time, and I think there was half a million jobs lost that were attributed to that raise."

Jobs are lost, hours are cut back, and new hiring is slowed.

Lower employment and diminished purchasing power is not factored into the CPI, but is a result of hikes in the minimum wage.

==============================

Sheesh!

◔_◔

Housing, since early 2009, has been a negative sector for the CPI.

Actually, I should have said, "house was a negative sector for the CPI in the years before and following 2009." I believe it has been rising recently.

Conan,

Let's cut through all the bullshit and posturing already and make this very simple.

Can you prove the following claim with data to back it up or not?

"Raising the minimum wage... results in inflation..."

I have truncated your claim to make things as cut and dry as possible here.

The remainder of your claim is a wishy-washy opinion piece whose only foundation is your own conjecture.

If you can't prove this very straightforward claim with data to back it up you should just admit you are in error.

I've already demonstrated using two separate metrics for measuring inflation that you are wrong.

It is time for you to demonstrate that you have real economic data to support what you are saying otherwise anyone listing to you should conclude that you are pulling this out of your ass.

Conan Says:

"I know now that you couldn't have defended your use of the CPI as a measure of inflation in this discussion, because you don't understand the concept you're trying to use."

Except that I have defended it on the grounds that you don't actually seem to comprehend what we are trying to measure.

The entire basis of your criticism is that you claim CPI is not a perfect measure of the ABSOLUTE inflation rate.

What I have already explained to you is that this doesn't matter in this case because all we are interested in is the RELATIVE inflation rate.

For our purposes both the CPI and gdp-deflator are perfectly suitable.

All you have is excuses and hot air... it is time for you to show the data.

Can you prove the following claim with data to back it up or not? ~ Artemis [Orion]

You're being especially dense. I already have demonstrated it - several times. I've shown you that wage increases are a component of all measures of inflation ... but only one component.

The purchasing power of the US Dollar has steadily declined over time. That's due to inflation. Is that inflation due entirely to wage growth? No. But steady wage growth is a component of it - and I'd wager a significant driver of it over time, driving manufacturing costs up (remember those union indexed contracts) which drive prices up and so on.

http://research.stlouisfed.org/fred2/series/CUUR0000SA0R

You want a perfect data correlation. Such things rarely exist - except in the unicorn fantasyland you've created in your mind.

Look at how many people have "proven" McDonald's can afford to raise prices 17% and not charge more for the Big Mac. Using false data, they "proved" it.

Using the overall CPI at a point in time (a point with depressed housing costs), you think you've proven that minimum wage increases don't contribute to inflation.

You offered the CPI as "good enough." There's a reason the phrase "good enough for government work" exists. I've shown you the issues with using the CPI as the definitive measure of inflation (absolute, relative, or otherwise). It doesn't show the food price inflation pinch people feel when they can't get the things they used to get for the same money.

Households with lower purchasing power due to the decline in the ability of the US Dollar to purchase the same items feel inflationary pressure - even if they do things like switch from butter to margarine to cut costs and keep their grocery bill the same (which keeps the CPI lower than the pressure they're feeling).

And if you factor in unemployment and underemployment due to layoffs and decreased hiring as wage rates increase (something the CPI does not do), you'd get an even grimmer picture.

Conan,

Here was my challenge to you:

"Can you prove the following claim with data to back it up or not?"

Please notice the explicit requirement of "DATA".

Here was your response:

"You're being especially dense. I already have demonstrated it - several times. I've shown you that wage increases are a component of all measures of inflation ... but only one component."

Please notice that you haven't provided any data... not even once.

The reason data is required to demonstrate your point is that inflation occurs whether or not the minimum wage is increased.

Hence to support your claim you need to compare the relative rate of inflation during times when the minimum wage remained constant against times then it was increased.

I have already demonstrated using actual data that the claim you have made is not supported by the evidence we have available.

In fact the opposite is shown to be true.

During times of no minimum wage change the inflation rate was HIGHER than during times when the minimum wage was raised.

The very fundamental problem you cannot get around is that your opinion isn't supported by the data... it isn't supported by the facts.

That should tell you something... it should tell you that you're perspective is horribly wrong or incomplete in some very important way.

Conan,

Once again I have decided to do the simple mathematics for you since you seem to be utterly incapable of running the numbers.

Let's use the chart you linked to (I must point out here that the link uses the CPI as the basis for its calculation, which you spent 1000's of words telling me was not useful for this analysis. As I said before, your criticism was a load of crap since you seem to be defaulting to the CPI when you need data.):

http://research.stlouisfed.org/fred2/series/CUUR0000SA0R

If you spent even 5 minutes looking at this data critically you would notice the following features:

1 - The purchasing power of the US dollar in 1997 was 62.8

2 - The purchasing power of the US dollar in 2007 was 48.7

3 - The purchasing power of the US dollar in 2014 was 42.3

I selected the first available data point for each year to be consistent.

When we run the numbers we find the following:

From 1997 to 2007 there was an average annual decrease of purchasing power of ~2.5%

From 2007 to 2014 there was an average annual decrease in purchasing power of ~2%.

"You want a perfect data correlation. Such things rarely exist - except in the unicorn fantasyland you've created in your mind."

No... I am not looking for perfect data correlation.

However, the data is anti-correlated with your proposition.

If anything the data suggests that the opposite of what you are saying is true.

Every shred of evidence we have available suggests you are wrong, and yet you defiantly insist that you are correct.

You've got every excuse in the book, now claiming that I am looking for a "perfect" correlation.

What a load of bull shit.

I don't need things to be perfectly correlated... but any correlation at all would be kind of nice.