From the CBO, we have it outlined like this… If we raise minimum wage to 10.10, we lose 500,000 jobs. If we raise it to $9.00 we lose 100,000 jobs…
Is it better to work and receive more money, or is it better to have more people working for less, but at least they are working….
Great question. There were 3.3 million people making minimum wage in 2013…. The wage will jump from $7.25 to $10.10 or jump from $7.25 to $9.00. The first is an increase of $2.85; the second is an increase of $1.75… The impact of that increase on 3.3 million people are as follows.
3.3 million X $2.85 = $9.405 million/hour increased purchasing power
3.3 million x $1.75 = $5.775 million/hour increased purchasing power
3.3 million X $0 (no change) = $0.00 No change; same as it every was.
But wait. Job losses are bound to occur. If we take the CBO’s estimate, we get the first minus 500,000; the second minus 100,000.
(3.3 million -500,000) X $2.85 = $ 7.98 million/hour economic benefit
(3.3 million -100,000) X $1.75 = $ 5.60 million/hour economic benefit
(3.3 million- 0) X $ 0 (no change) = $0.00 no change from the past
There you go… We get more economic push by going with the $10.10 number despite the possible loss of jobs. .We got an answer. Gee. What was so hard about that?
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Appendix:
Someone else brought up the idea that those people put out of work, have a negative influence upon the equation… To be honest prior to their mentioning it, at first, I really hadn’t thought about it. It never occurred to me, because mathematically they would be zeros. Interesting, huh? How the brain works? My focus was on how much positivity a minimum wage increase would generate… And because of my positivity I have trouble accepting that there is a negative influence for letting those people go. But just in case there is, let me put it down here as well since someone brought up the fact that those leaving the work force would be decreasing the total pool of potential earnings by their future estimated earnings with which had they been previously working. Which in this case, would be the minimum wage rate… applied at both the levels of 500,000 and 100,000….
((3.3 million -500,000) X $2.85) – (500,000 X $7.25) = $ 4.355 million/hour economic benefit
((3.3 million -100,000) X $1.75) – (100,000 X $7.25) = $ 4.875 million/hour economic benefit
(3.3 million- 0) X $ 0 (no change) = $0.00 no change from the past….
That changes the impact. There are several problems with this last model. One, is that its total, is a theoretical rate representing everyone working per hour. Those being laid off can’t really be a negative against this because everyone who is still working, IS making that much… This is the net increase amount which will be reported, earned, and taxed. Secondly, if you are out of work you are making zero dollars, and not an actual negative amount which challenges whether the principle is sound to deduct a cost away from the benefit when making this particular comparison. One could do so, if one was expostulating a potential benefit which would have to be benchmarked against full employment, and not against the incremental amounts. For example if we had access to the number of hours worked at minimum wage in this country over a set time period, we could actually make that comparison by plugging in these two rates..
As it stands we can already compare these totals to the status quo, and there is a definite positive bump in economic activity… Plus, if those temporarily laid-off people get other jobs, ones that actually pay more than minimum wage, then they are off the chart, and that negative is not there at all. The underlying assumption for there to be an existing negative, is that these people losing their jobs, immediately and forever stop contributing to the economy…
Therefore probably the best comparison to achieve that would be painted like this…
3.3 million X $2.85 = $9.405 million/hour increased purchasing power – (.5 million X 7.250 = $9.405 – $3.625 = $5.78)
3.3 million x $1.75 = $5.775 million/hour increased purchasing power – (.1 million X 7.250 = $5.775 – $0.725 = $5.05 )
3.3 million X $0 (no change) = $0.00 No change; same as it every was.
That probably is the best description since it contrasts against the potential possibility of earnings.
But as policy this shows Delaware’s Tom Carper to be very wrong when he was quoted as saying that the lower amount of increase would be best for this country…
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kavips 
2 comments
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February 25, 2014 at 6:28 pm
Katherine Kingsford
I agree that the minimum wage should be risen. My husband is finishing school, and he works at a minimum wage retail job. He works overtime most weeks, while also taking 15 credit hours. But, since I recently lost my job, if my unemployment runs out before I find a new job, his income alone will not be able to pay our bills – mind you, we live in a modest apartment. Someone who works as hard as my husband should be able to provide an apartment for his family on one income, while putting food on the table, paying for health insurance, and all the other bills. It’s just not right, in my opinion.
February 25, 2014 at 7:47 pm
kavips
What life has come down to in 2014, is a battle between people versus profits. Right now, profits definitely have the upper hand; From 1930 to 2000, the lives of people trumped.
Put crisply, now it is considered collateral damage if people die as long as we keep profits high. I can remember when it was ok for profits to be small, if it meant people had a chance live longer, to own a home, own a car, pay their bills, and afford to raise children….
Each is a different model, Each works best, depending on who you are and your place at the economic table.
On a human note, I wish you luck. One trick that is old and if you don’t mind I’ll pass it on to you, since it never shows up in any self-help manual simply because I’ve sat on until now… But early in the interview, in the middle of stating your qualification, stop and ask them what kind of person they are looking for…They become flattered and they will tell you. If they say energetic, you act energetic, if they say resourceful you demonstrate your resourcefulness. If they say quiet, you play that role too. Ironically they will tip their hands and tell you exactly what they are looking for, primarily because you are an audience and they are human and love to talk too. I tended to always get an offer after I once tried this, and that was how. I made the interviewer do most of the talking and at the end, they really didn’t know much about me, but still they really liked me so much after that, they made me an offer…. I simply pass this on, because knowledge peculates upwards, but try not to let too many know, otherwise its effectiveness will become diminished…
Although it does now help you with getting a job, here is one more thing. Accept that you are being tested, and rise to the occasion. Looking backwards, I see life as a series of stair-steps. The plateaus were where I worked, and the rises were times between jobs. What I learned while looking for work, I used on the job. Mostly all of life is about people…. Looking for work, you certainly get exposure to that…. If possible keep your focus on what you are learning and not worry too much about the rejection. And share what you learn with your husband. It will make him smarter too.
Don’t worry. Trust. Keep in mind that you don’t need many chances; you just need one. And even If you don’t get a job until the very last day of your unemployment, you had time to focus on pregnancy #1. … trust me, when older, you will look back, see things with different eyes, and see how lucky everything worked out….
Don’t know your beliefs, but despite what they are, praying helps. and getting as many people to pray for you, helps even more…. Sending my prayers out your way now…
🙂