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Peter Schiff - Minimum Wage, Maximum Stupidity

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July 10, 2009 – Comments (15)

In a free market, demand is always a function of price: the higher the price, the lower the demand. What may surprise most politicians is that these rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the one set to take effect later this month, are always seen as an act of governmental benevolence. Nothing could be further from the truth.

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15 Comments – Post Your Own

#1) On July 10, 2009 at 12:41 PM, portefeuille (99.56) wrote:

Minimum Wage, Maximum Stupidity

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#2) On July 10, 2009 at 12:41 PM, 4everlost (29.50) wrote:

here's the link

http://www.europac.net/externalframeset.asp?from=home&id=16714&type=schiff

 

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#3) On July 10, 2009 at 12:43 PM, kdakota630 (29.81) wrote:

Oops!  Thanks guys.  I was doing too many things at the same time and apparently messed that up.

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#4) On July 10, 2009 at 12:47 PM, portefeuille (99.56) wrote:

... and apparently messed that up.

it is a system failure.

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#5) On July 10, 2009 at 12:51 PM, kdakota630 (29.81) wrote:

Thanks again, portefeuille.  I was SURE I did that right AND tested it, but I was multi-tasking so I figured it must've been my mistake.

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#6) On July 10, 2009 at 12:56 PM, ChannelDunlap (< 20) wrote:

As one who has relatively recently attempted to survive on minimum wage, I fully support this increase.  $5.85?  $5.85?!  Come on now.  Maybe it's bad timing, but it's been needed for a long, long time.

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#7) On July 10, 2009 at 1:20 PM, russiangambit (29.49) wrote:

> As one who has relatively recently attempted to survive on minimum wage, I fully support this increase.  $5.85?  $5.85?!  Come on now.  Maybe it's bad timing, but it's been needed for a long, long time.

The truth is $7.25/hr   is very good higher middle class salary anywherethe developing world. Of course, their cost of living is much lower than in the US.  But there is so much waste in the US, if we just planned our cities with a little bit more foresight, so much waste could've been saved.

Anyway, my initial point was , have they not heard about outsorcing yet? 99% of ppeople in India, China, Brazil, Russia, Phillpines, Indonesia, Vietnam and the list goes on would  jump at a chance to make $7.25 per hour.

May be the culprit is not only the minimal wage and the lack of jobs but also our wasteful way of living.

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#8) On July 10, 2009 at 1:22 PM, Hoglum (93.84) wrote:

When I was living on a low wage, I never expected to have my own house, raise a family, etc.  The way to get by was to share rent & utilities with roommates, ride the bus rather than own a car, choose groceries carefully, and budget appropriately.  People seem to have a strange expectation that since they work at all, they deserve some minimum lifestyle.  I'm glad Mr. Schiff has said this.  We need to get back to earn now, reap later.

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#9) On July 10, 2009 at 1:31 PM, kdakota630 (29.81) wrote:

I was actually a big fan of higher minimum wages when I was younger (and making just a bit above minimum wage) until I heard Walter Williams talking about the subject which TOTALLY turned me around on the idea.

Plus now that I own my own small business here in Canada where minimum wage is currently $9.50/hour, I can assure you that the vast majority of people who come to me looking for work simply aren't worth that much money because they won't be productive enough to offset the cost of employing them.

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#10) On July 10, 2009 at 3:32 PM, ChannelDunlap (< 20) wrote:

Maybe it is just my proximity to it that makes me disagree.  It wasn't too long ago I was making $5.85 on a 36 hour "full-time", benefitless schedule.  And I survived just how Hoglum said.  I had 2 roomates in a 1 bedroom apartment, shared a car, stole my groceries (no joke), and barely made it by.  Then I made a visit to the ER, and the whole house of cards came tumbling down.

So maybe it is just that I've actually been there within the past 5 years that gives me such an outlook.  But it's hard for me to look at the past few decades, with the death of the stay-at-home-parent, with many people now working 2 jobs, and say we should be paying people less.

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#11) On July 10, 2009 at 4:58 PM, russiangambit (29.49) wrote:

> I had 2 roomates in a 1 bedroom apartment, shared a car, stole my groceries (no joke), and barely made it by.

The thing is this is how most people leave outside the US, with exception of the groceries part, of course. They grow their own.

You didn't qualify for food stamps on the minimal wage?

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#12) On July 10, 2009 at 9:39 PM, devoish (99.07) wrote:

kdakota.

Plus now that I own my own small business here in Canada where minimum wage is currently $9.50/hour, I can assure you that the vast majority of people who come to me looking for work simply aren't worth that much money because they won't be productive enough to offset the cost of employing them.

Then you better get your business acumen in gear and fast. Your competitors are employing from the same "vast majority of people" at $9.50/hour. You have two choices. Either go with the executive principle of "motivate with bonus pay" to get the "best quality people" or figure out why you cannot take market share from your competitors with the same "vast majority of people" at the same minimum wage. This is not a competitive disadvantage so something else is failing YOU.

Good luck.

 

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#13) On July 10, 2009 at 9:43 PM, Dividends4ever (< 20) wrote:

I just read a recent article that said engineering classrooms have no students (overseas classes are full) while way to many teenagers/ college students in the US think are concentrating only on hip-hop classes and singing lessons in the hopes of being the next reality stars.

Sounds like the US has a good future.

 

www.compdivplan.com 

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#14) On July 11, 2009 at 10:42 AM, kdakota630 (29.81) wrote:

devoish

Without going into too much detail, from what I'm hearing, I am the only local competitor who is currently thriving.

Until recently I was surprised that my newest competitor with his (what I consider) poor location could be so fully staffed.  This week I found out the reason:  they work on mostly commission.  I'm also guessing that they won't be there much longer considering how little they're making based on what I learned their sales are roughly.

At the moment I'm working the extra hours keeping my overhead to a minimum to keep putting myself into a better financial position, especially with the economy being the way that it is.  If minimum wage were lower (or non-existant), I would consider hiring another person and taking the time to train them to see if they were worth keeping and paying more.  At $9.75/hour, I'm not actively looking for another person because anyone who I hired would have to be able to do the job almost right from the start.  I couldn't afford to pay them that wage to find out that they can't do the job and then have to start the process all over again.

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#15) On July 13, 2009 at 1:53 PM, ReadEmAnWeep (81.12) wrote:

"I just read a recent article that said engineering classrooms have no students (overseas classes are full) while way to many teenagers/ college students in the US think are concentrating only on hip-hop classes and singing lessons in the hopes of being the next reality stars."

 

I'm n engr student, and all my classes are packed full, but thats because the numbers of classes has shrunk. I agree that the US really, really need to put more emphasis on math/science education. Public school (you know k-12) is a huge, huge joke.

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