Why Settle For $9/hr Minimum Wage? Elizabeth Warren Pushes For $22 (VIDEO)

Author: March 26, 2013 10:13 am

Warren_Minimum_Wage
At this point, it is clear: Elizabeth Warren is not holding any punches in her fight to defend the middle class of America. Her rise to the U.S. Senate has turned many people’s heads and dramatically changed the dynamic on Capitol Hill. But on March 14, in the Senate committee meeting titled “Keeping up with a Changing Economy: Indexing the Minimum Wage,” she really raised the stakes: [See video]

Checking her numbers, Senator Warren and Mr. Dube are quite correct: if adjusted for productivity, minimum wage should be $22/hr. And even more interesting, Mr. Dube’s comments included this gem:

Had it kept up with the growth in income going to the top 1 percent, it would have been even higher, at $24 per hour; and the wage would have exceeded $33 per hour at its peak in 2007. [From video]


Given the fact that the minimum wage should be at $22 or even $33 an hour, focusing the debate on raising it to $9 an hour seems almost insulting. Even conservative think tanks agree that the minimum wage needs to be far higher than the modest $9.00 per hour of the President’s proposal.

Imagine the shock to the system $22.00 an hour would be to an employee. An immediate effect would be a reduction in two-income, lower income households. A single wage could afford the same lifestyle currently enjoyed by two people working three minimum wage jobs, even accounting for the inflationary reaction. This would relieve unemployment pressure across the board. In addition, it would create an improvement in the government budget, reducing pressure on programs such as Medicaid and Food Stamps, while also bringing in far higher tax revenue. It is a win-win scenario.

And it is about time someone talked about it.


Nate_Downes

Nathaniel Downes is the son of a former state representative of New Hampshire, now living in Seattle Washington.

Feel free to follow Nathaniel Downes on Facebook.

facebook comments:

6 Comments

  • All this whining is missing the point, 30 odd years ago, minimum wage WAS the equivalent of 22 dollars an hour right now.

    And the economy was doing JUST FINE.

  • youre missing my main point, which is that prices have done the opposite of what they should do when production increases and goods become less scarce, under these circumstances in an economy prices should decrease, not increase. This has a huge effect on wages; generally speaking, your wage, even if not in nominal terms, increases in real terms because the individual can buy more than he previously could.

    So the real question we need to ask ourselves, if we have a thorough understanding of the basic economic theory of supply and demand, is why while production has increased and goods have become less scarse, prices have increased drastically over the last 50 years and not decreased, and why wages have (although increasing nominally) have actually decreased in real terms.

    Both of these two things together are the exact opposite of what we should be seeing in a free and voluntary marketplace. But that just begs the question, is our marketplace for goods and labor free and voluntary? and its not, so what is going in government policy that is pushing the economy in such a backwards motion from the direction it would otherwise be going.

    I think studying the effects of inflationary increases in the money supply and he effect that has on both prices and wages is a good place to start.

    why is supply and demand not working?

    The laws of supply and demand applies to labor and wages the same as any other good or service.

    Everything you said is basically nothing more than predictions, almost all of which are wrong, there’s literally no acurate way to predict economic human action.

  • She asked ‘why has production increased but wages have not?’ that would only be a legitimate question if the money supply hadn’t increased so much. As products become less scarce they should also become less expensive, but only if he money hasn’t also become less scares, it’s pure inflation. 50 years ago, the minimum wage was 4 silver quarters per hour. Today, those same quarters are worth $20.72. We don’t have a minimum wage problem, we have a money problem.

    The major problem she ignores is why prices have not fallen but risen. Generally speaking, if productivity rises, prices should come down as products become less scarce, therefor wages would actually have risen in terms of buying power…this is supply and demand and without inflation to mess up the system, this is how prices and wages rise and fall in a few voluntary economy.

    She completely misses this basic fact of economics.

    • Nathaniel Downes

      No, she gets it very well. You’ve ignored the price is not set by labor, but by material. Labor is such a tiny piece of the products cost, such a dramatic increase would cause inflation of about 2-3%, far less than the total amount of consumption increase. We would be talking about a GDP in the $30-35 trillion range, all because we’re willing to pay an extra $0.23 for a Big Mac. It is a trade I find acceptable.

      • youre missing my main point, which is that prices have done the opposite of what they should do when production increases and goods become less scarce, under these circumstances in an economy prices should decrease, not increase. This has a huge effect on wages; generally speaking, your wage, even if not in nominal terms, increases in real terms because the individual can buy more than he previously could.

        So the real question we need to ask ourselves, if we have a thorough understanding of the basic economic theory of supply and demand, is why while production has increased and goods have become less scarse, prices have increased drastically over the last 50 years and not decreased, and why wages have (although increasing nominally) have actually decreased in real terms.

        Both of these two things together are the exact opposite of what we should be seeing in a free and voluntary marketplace. But that just begs the question, is our marketplace for goods and labor free and voluntary? and its not, so what is going in government policy that is pushing the economy in such a backwards motion from the direction it would otherwise be going.

        I think studying the effects of inflationary increases in the money supply and he effect that has on both prices and wages is a good place to start.

        why is supply and demand not working?

        The laws of supply and demand applies to labor and wages the same as any other good or service.

        Everything you said is basically nothing more than predictions, almost all of which are wrong, there’s literally no acurate way to predict economic human action.

        • Nathaniel Downes

          I have multiple nations to cite for examples to back me up.

          The problem is labor is not a commodity, it is a human being. Once something which is not rational enters into a rational system, like the laws of supply and demand, the rules break down.

Leave a Reply

You must be logged in to post a comment.

x
Click "Like" to get the latest updates