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Comments about ‘Letter: Raising minimum wage will start inflating prices to match’

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Published: Sunday, April 7 2013 12:00 a.m. MDT

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Roland Kayser
Cottonwood Heights, UT

"Yes, people can barely get by on the current limit, but that is set up to help us learn how to conserve and be content with what is needed."

Did some billionaire pay you to write this? Because they are the beneficiaries of sinking American wages.

Mark B
Eureka, CA

It's not wrong to be concerned about inflation, but what does Eric believe about wages at the TOP end of businesses. Does raising their pay make prices go down?

Hutterite
American Fork, UT

I suspect Eric doesn't live on minimum wage.

Ultra Bob
Cottonwood Heights, UT

The reason conservatives hate and fear inflation is because it decreases the value of their hoard of money in terms of what goods it will buy. Deflation as we have in a recession is good for them because it increases the amount of goods it will buy.

Smart businessmen use the cycles of inflation and recession to make their program of “buy low, sell high” a profitable philosophy. Some of us even believe that businessmen create the cycles of inflation and recession according to their needs.

The problem of workers is that when the businessman raises prices, he seldom if ever considers raising wages of his workers.

Mountanman
Hayden, ID

If you are earning minimum wages it is because YOU failed to obtain marketable job skills! Only you can do something to elevate your earning potential. And by the way, every time minimum wages go up the number of entry level jobs decrease commensurately!

@ Mark B. Wages at the top of businesses are EARNED, not given. If you don't perform, you get removed and your job given to someone who can perform. Your earnings will rise to the level of your competency! That's why brain surgeons,lawyers and CPA's earn more than janitors and hamburger flippers! It is a very fair system because it keeps unqualified people where they belong and qualified people in jobs where they are actually qualified to perform. Imagine the opposite!

10CC
Bountiful, UT

I agree with Eric that intuitively, it makes sense that raising the minimum wage will result in a rise in other costs, and prices... inflation.

However, what seems intuitive apparently is not so straightforward, in this case. Economists have studied this issue in great detail, and have plenty of statistics from places where the minimum wage was increased, such as specific cities or states, and the result is that there is no consensus that a strong inflationary effect follows when the minimum wage is increased.

In the 70s, over 90% of economists thought raising the minimum wage would result in inflation, and today about a third of economists think so, based on the body of rigorous analysis done through time. The work of economists Kruegar and Card in looking at New Jersey and Pennsylvania is thought provoking.

Why? This question is still open, but some theories are that when the minimum wage is raised, there appears to be less turnover among lower paid workers, which results in lower training costs, and higher productivity. This seems to make sense, right?

(The Wikipedia article on this topic is actually quite good.)

UtahBlueDevil
Durham, NC

I hear this argument over and over again.... and yet there is no data to support this proposition. In fact, productivity - the measure of value an employer gets for every dollar they spend - has been see-sawing up in the employers favor year after year. Historically, labor as a component of COGS has not been rising, but has been decreasing.

There is a link between inflation - cost of living - and minimum wage. But the fact is that wages have lagged behind cost of living... I believe in free markets, with out a doubt. But business historically has shown a poor record of balancing its responsibilities to share holders and their employees.

one old man
Ogden, UT

"If you are earning minimum wages it is because YOU failed to obtain marketable job skills! Only you can do something to elevate your earning potential."

Another hatefully false comment from an expert on that kind of thing.

What about the thousands of good Americans who lost jobs who are actually well educated, experienced, and competent who cannot find a job now because they are "overqualified" or old enough that many companies will not hire them?

Some of us are much more fortunate than others around us. Let's not rub their faces in the misfortune caused by corporate greed or the kind of CEOs whose multimillion dollar salaries and bonuses destroyed their companies (think Hostess).

The GOP is becoming increasingly irrelevant exactly because of thinking like that.

ugottabkidn
Sandy, UT

Eric, your premise has no factual or historical basis. Since 1973 the average working class wage has risen 28% in real dollars while the upper 2% has risen 400%. Wall Street is stripping the economy of trillions while you and I are accused of throwing the economy in a tailspin. American jobs were leaving the economy at the rate of 700000 a month in Jan 2009 and the ones that have returned are heavy in minimum wage and part-time. The real job creators are not your CEO's but those that create the demand and if they can't afford to feed their families or pay the gouge they get to heal them then they aren't going to buy widgets to make the economy flourish. It was a well balanced middle class that brought greatness to this country and we are rapidly seeing it's disinegration. You need to get on board with systemic changes or serfdom here we come.

Mountanman
Hayden, ID

@ One old Man,. Here we go again, you and I. Who hasn't lost a job in their lives? And when it happens, as it has happened to me many times, what do you do about it? Do you improve your skills, your qualifications and find a better job or do you whine for the government to take care of you and cry for higher minimum wages? Democrats certainly seem to prefer the later options while conservatives the prior. Minimum wage jobs are for those who are just entering the work force who are gaining and improving on their jobs skills not for people who are supporting a family and paying taxes.
And by the way, Unions destroyed Hostess, not CEOs. Unions made Hostess unable to compete in the real world but you wouldn't know that unless you had actually ran a business and actually had to compete. Guess Obama didn't bail out that union like he did others, did he? Some 70% of the "stimulus package" that was supposed to create millions of "shovel ready" jobs went to unions and well, we see the results!

Jacob_Z
Brigham City, UT

It's disheartening how many people think that the rich can never have too much, while the poor can never have too little; that for those at the top end of the pay scale, no salary is too exorbitant, while for those at the bottom end even a minimum wage is too high, to say nothing of a living wage; that if those at the top rake in every perk and bonus they can get, that's as it should be, but if normal workers negotiate a deal with decent pay and benefits, they're ruining the economy.

We're told that if somebody receives minimum wage, it's their own fault. Do the people telling us that ever stop to consider that many of those getting minimum wage are doing the best they can? I suppose their answer would be "Tough luck," and besides, without the poor, where would the rich be? "Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many" - Adam Smith, "The Wealth of Nations," Book V, Chapter I, Part II.

UtahBlueDevil
Durham, NC

"Minimum wage jobs are for those who are just entering the work force who are gaining and improving on their jobs skills not for people who are supporting a family and paying taxes."

Tell that to those who work the fields and provide the food we eat, or those who clean our hotels and offices, or those who work for the likes of Walmart.

From the US department of Labor;

"Among those paid by the hour, 1.7 million earned exactly the prevailing Federal minimum wage of $7.25 per hour. About 2.2 million had wages below the minimum.2 Together, these 3.8 million workers with wages at or below the Federal minimum made up 5.2 percent of all hourly-paid workers."

Of those earning minimum wage - only 11 percent didn't have a high school education.

Texas brags about its unemployment rate, yet they lead the nation in people making under the minimum wage - 10% of its work force.

This isn't about high schoolers getting their first jobs.

"Some 70% of the "stimulus package" that was supposed to create millions of "shovel ready" jobs went to unions and well, we see the results!"

Drivin i-15 lately?

Eric Samuelsen
Provo, UT

Raising the minimum wage causes inflation. Funny; it never has before.

killpack
Sandy, UT

You all can debate all you want how much raising the minimum wage affects consumers. But there is absolutely no doubt in my mind that raising the minimum wage is disastrous for the least skilled workers in the economy. It isn't a show of compassion for the poorest individuals; it is harmful to them. To deny that is to be ignorant of basic microeconomic principals.

Mountanman
Hayden, ID

THE best way in the world to perpetuate poverty is lock people into minimum wages!

merich39
Salt Lake City, UT

Those who make minimum wage are supported by a host of social services, from Medicare to food stamps to utility assistance. So we're already paying for the increased cost. The problem is that it's all taxpayers who pay for these social services instead of the consumers who actually buy the low-cost goods that the current minimum wage subsidizes. It's like farm subsidies. We can't take away farm subsidies because the price of a gallon of milk with double or triple. Well, guess what? We're paying that increased cost for a gallon of milk already. We're just paying it on our tax return instead of at the cash register. The same thing holds true with WalMart. We buy cheap goods at WalMart and then make up the difference with our payroll tax deductions that pay the Medicare and food stamps for the WalMart employees.

UtahBlueDevil
Durham, NC

"THE best way in the world to perpetuate poverty is lock people into minimum wages!" - this Mountainman I completely agree with you. There must be a path forward....

Roland Kayser
Cottonwood Heights, UT

To Mountanman: "That's why brain surgeons,lawyers and CPA's earn more than janitors and hamburger flippers!"--You are not talking about the rich, you are talking about the upper-middle class. I do not know a single person who doesn't think that these highly educated people should earn much more than unskilled laborers.

I do, however, have a major problem with a hedge fund manager who earns more in an hour than a janitor makes in a lifetime. And no, that's not a misprint or an error. I have a problem when the six heirs of Sam Walton have more wealth than the combined net worth of the 140,000,000 Americans who make up the bottom 40% of the population. That also is not a misprint or an error.

Mike in Cedar City
Cedar City, Utah

If we have to pay more, so what, people need a living wage and they should not be expoited by well to do business owners as they often are.

RedShirt
USS Enterprise, UT

ok liberals, now that you have had your moment to complain, lets look at other things you have said about wages.

Many of you complain that the US can't compete with countries that pay workers $2/hr. Now, you want to make US labor more expensive. What do you think the result will be? Does a $9/hr minimum wage make the US more or less competitive with a country that pays their workers $2/hr? What do you want? Do you want more jobs in the US, or do you want to drive jobs overseas and to illegal immigrants? You can't have it both ways.

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