We Americans don't understand the purpose of a 'wage'

What is a wage?
A wage is a mean of separating the working class from the jobless.
The cost of a life is a value of 0 and the cost of a unit of work is the value of 1 divided in cents/dollars. To provide incentive to work as a means of gains, you increase number of dollars needed to purchase good and services.

How does minimum wage work?
The greater a minimum wage grows, the more the separation you have from jobless and the workforce. It creates a greater number of units needed to buy basic goods and service each time it rises.

Why have the top 1% gained more wealth since 1973?
As the minimum wage is only a number separating the working class from the jobless, it works the opposite way when money is paid to the corporate world. As the dollar has no set value, it is actually just 1 unit of work. As the minimum wage grows, you fraction the unit of work’s value which cycles back to the 1% in higher multiples the more you divide it. Thus you actually decrease the value of the working class rather than increase the value.

The current minimum wage
$7.25 is the lowest value of 1 unit of production. It places a single person out of the poverty range and equals 3-times the value of being jobless. In 40-hours a week of work you will make 15,080 per year.

$14.50 is the wage that gives a person twice the spending power and as it is equal to 2 units of production. Many manual labor, store manager and mid level skill jobs pay at the level equaling 30,160 per year at 40 hours per week. It meets middle class in small towns as well as the cities of Orlando (FL), New Orleans (LA), Tampa (FL), Miami (FL) and Memphis (TN) placing the employees 6-times ahead of jobless persons in purchasing ability.

$21.75 is the wage that provides a firm standing in the American middle class that only falls short in Washington (DC), San Francisco (CA) and San Jose (CA). Local management, skilled labor, skilled tech, government occupations and administrators usually exceed this value which is 9 times the value of being jobless. A 40-hour week equals 45,240 per year.

Bernie Minimum Wage
$15.00-is the lowest value of 1 unit of production. It places a single person out of the poverty range and equals 6-times the value of being jobless. In 40-hours a week of work you will make 31,020 per year.

$30.00-is the wage that will need to be given for a person twice the spending power of 1 unit of production. As it is equal to 2 units of production placing the employees 10-times ahead of jobless persons in purchasing ability and equals $62,400. It will be the lowest wage needed to enter the middle class.

$45.00-is the wage that will be needed to establish a firm standing in the American middle class at 3 units of production. This value is 14 times the value of being jobless and you will need a 40-hour week equals $93,600 per year. It exceeds the middle class range is range in 5 current US cities.

1973 Minimum Wage (The year the Middle Class had it most power)
$1.60-is the lowest value of 1 unit of production. It places a single person out of the poverty range and equals 1-times the value of being jobless. In 40-hours a week of work you would make $3,328 per year.

$3.20-Was the wage that gave a person twice the spending power and as it is equal to 2 units of production. Equaling $6,656 per year at 40 hours per week, a person had 2 times the purchase power of the unemployed and would have a great middle class lifestyle.

$4.80-is the wage that will be needed to establish a firm standing in the American middle class at 3 units of production. This value is 3 times the value of being jobless and you will need a 40-hour week equals $9,984 per year. A person had a high middle class standing.

Current Government Poverty (Wage Level)
Single person $11,700 a year or $5.62 per
3 Person Family $20,140 a year or $9.68 an hour
4 Person Family $24,300 a year or $11.68 an hour

$15 an hour Government Poverty Range
Single person $23,400 a year or $11.24 an hour)
3 Person Family $31,824 a year or $15.30 an hour)
4 Person Family $36,067 a year or $17.34 an hour)

1973 Poverty Range
Single person $2,300 a year or $1.10 an hour)
3 Person Family $3,440 a year or $1.65 an hour)
4 Person Family $4,500 a year or $2.16 an hour)


http://www.realitybase.org/journal/2009/3/10/the-american-dream-died-in-february-1973.html

http://articles.baltimoresun.com/19...income-inequality-family-income-median-income

http://www.pewresearch.org/fact-tan...rs-real-wages-have-barely-budged-for-decades/

http://www.middleclasspoliticaleconomist.com/2012/03/basics-real-wages-remain-below-their.html

https://en.wikipedia.org/wiki/Average_Indexed_Monthly_Earnings

http://www2.census.gov/prod2/popscan/p60-096.pdf

https://www.census.gov/hhes/www/poverty/data/threshld/thresh73.html

http://www.dol.gov/featured/minimum-wage/chart1

 

minimum wage is meaningless if you dont combat illegal immigration.

 

Where are you going with this? People need jobs in order to support their families. The elites need workers not just to perform a specific labor, but also to be the market for the goods and services they sell. One cannot exist without the other.

What the pure free-marketeers assume is that workers are only tools - like a hammer you discard when it is broken. What they fail to realize is that labor is more than just another cost of production (a cost that must always be minimized). Labor also is the market itself. Without buyers, sellers won't sell a damn thing. Every job sent overseas or job taken by an immigrant or replaced by immigration reduces the available market for producers across the board.

It is the tragedy of the commons. One individual employer gains a competitive advantage by reducing labor costs, and ends up with a greater market share. So far, so good. Other employers do the same thing in order to survive. A few lost jobs turns inot a torrent as everybody jumps on the bandwagon. Competitive pressure increases, consumers have less to spend, and businesses close.

What's good for one person can be bad when everybody does it.

If nothing else, this is why we need a minimum wage. It protects both workers and employers, but only when it is implemented on a national scale. The exact value of the minimum wage would have to calculated for the best mix of wage protection and incentives. The most important thing is to set it just high enough to prevent a bidding war downwards in wages.

 

Actually, the elites don't need the workers as they aren't in danger of losing their wealth to wages. They need to workers for the purpose of defense, infrastructure, food production and to build products.
Most workers only serve to keep the other workers happy and are easily replaced if needed with machines or cheaper imported labor.
The elites know that 80% of the working class have limited analytic ability.

The basic fact about minimum wage hikes is to reset the wage barrier and make it tougher to rise up the ladder. It only harms workers as it limits the value of a dollar making life tougher and more people poor.
A $15 wage actually makes nearly every worker poor effectively developing a slave level class that has far less power as the jobless become completely powerless in a world that is already struggling with resources.

A dollar is no more than a piece of paper. That minimum wage of 1.6 pieces of paper in 1973 had more value than having 7.25 pieces now because you always have a lot of people who make 0 papers per day. They will always devalue the pieces of paper because they have to live as well and since they share in the good we receive the more you raise the minimum paper the broker you become.
The people that make a wage will always be tied to the jobless so making 15 pieces of paper will actually lower the value of your income if every worker is required to be given the same amount of paper.

 

In fact, they are.

Where does wealth come from? The wealth of this nation is its physical infrastructure, the value of its goods and services, and its intellectual capital. None of these has any value in the abstract. They only have value in the sense that someone is willing to buy them. The elite cannot construct an economy out of selling to each other - the market would be minutely small. They cannot create goods by robots and have them just sit in a warehouse. Somebody has to buy them. A lot of people have to buy them, for them to stay rich...a lot of people with jobs, to be quite specific.

Thus, the elites need workers as much as workers need them.

Of course, people behave in foolish ways. They act against their own interests. When the elites start acting like they don't need workers, then it is necessary and appropriate to start banging a few heads together.

 

That's a lot of info, and I can appreciate the effort, but I'm not following your argument. What is a wage? It's the price paid for labor, and that needs no explanation. What you wrote is a bit confusing. Please explain 'cost of life = 0?' Why do you write 'separate the working class from the jobless' rather than 'if you're earning a wage, you have a job,' which I think we can agree is common knowledge. Not sure what you're getting at. What point are you trying to make with all these numbers?

 

Please explain?

 

I did not follow the logic of that one either.

 

He's suggesting that illegals can take those jobs, which would render the minimum wage greatly diminished in some sectors.

 

Seattle is seeing a loss of jobs as its minimum wage rises. Imagine this multiplied (Seattle isn't at $15 / hour yet) and applied to an entire state in which it's already rated the hardest to do business.

The problem, which only I seem to be pointing out (and I hate saying things like that, as if I'm important, but in this case it's true) is that most welfare payments are based upon what your income is, so if they raise the minimum wage and you get less welfare to go with it, you aren't actually any better off but there will be fewer jobs to be had.

Maybe that's the point though. Maybe the proponents of this understand that and they want there to be fewer jobs so that there will be unrest.

 

as inflation happen, wages go up and your house mortgage is actually less, cause you earn more, but the mortgage stays the same

 

That's quite wordy for "raising the minimum wage causes inflation." Doubling it to $15 immediately would definitely have an inflationary effect, but that's never going to happen. However, small gradual increases in the minimum wage have not been proven to effect inflation in any meaningful way. I have no issue with a national minimum wage, but I would also be open to leaving it to states, counties and cities. If someone in Congress were to debate the issue from that angle, I would favor leaving the wage where it is and letting each locality sort out its economy.

 

He's not saying it would be diminished, he's (probably) saying that illegals will work for less than minimum wage under the table or in other contexts. Which means that people will avoid legal hiring. This already happens in lots of places and it's not something the left can really do anything about since if they crack down on people hiring illegal immigrants, it's bad for immigrants, and they are pro-immigrant. But if you have to shell out $15 and can afford to do it, might as well hire someone who speaks good English. It's going to be pretty messy.

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I'm not disagreeing with possible inflation but if we look at this in terms of whether people are helped and not in terms of numbers, it should be clear that no one will be helped by it since people trying to live off the minimum wage also need government assistance and that assistance is based off of your income.

 

That's what I meant, but thanks for clarifying. Sleeping pills have kicked in.....

 

People making much more than minimum wage qualify for assistance. That said, yes, for some people it would be a wash or even harmful, but the winners would be taxpayers. The whole system needs an overhaul, but ideally I want to see the private sector support itself. Anything that reduces welfare spending, without hurting people, would be the proper approach in my opinion.

 

I suspect that $15 / hour still puts you below the federal tax level, plus fewer jobs, so if we are presuming the same total income for the worker, I don't see how this would benefit the taxpayers either. I guess less is paid out as welfare but the lost jobs would put more people onto welfare to a greater degree of dependency.

 

The OP brought up good points, but failed to bring it home. Let me bring it home for you: The Minimum Wage depreciates REAL earning power, since the $1/unit isn't necessarily fulfilled by the work done. Let's take for example the absolute lunacy of $15. Do you think a MCdonalds burger flipper is worth $31K yearly? No, didn't think so.
The result of this, is that for such individual chains to be viable in the future, it'll have to increase the various prices, taking away REAL purchasing power.

(And then, as others stated, the workers on the higher-income scale would become upset that someone with LESS skills is making as much as they are, naturally demanding a raise.) Which will continue the effect even more. The Minimum Wage doesn't protect workers, it disenfranchises the weaker class by distorting the market value of their worth.

But people do need money to live, right? Obviously. So how do we go about fixing this problem? The Living Wage. It's finally time to implement this long needed idea, first proposed by Richard Nixon but he couldn't get it through. I intend however to implement such a program.

-First, by implementing the Living Wage, the Minimum Wage is no longer needed. Sure, we get rid of the artificial floor, but the ceiling has just been lifted as the value of the worker is fully appreciated and matched according to the value they produce. How do we make the Living Wage a reality? By tying the Living Wage to the GDP. The Median GDP of every American Worker.

The $15.00 number or 31K, is ironically that such Living Wage. The difference is that the Living Wage will be funded by a Trust Fund of US taxpayers, assured by the government. A collective "bank" if you will, exclusively for US Citizens managed by their government. This will sustain the Living Wage and therefore eliminate the previous concern of inflation.

-The Living Wage will be tied to a guarantee of 2 years of employment. The clock starts when you get your first check from the government. That two year grace period, combined with the world-leading training that the government will provide to people all across the world, will literally assure by both demand and quality that there's no such thing as unemployment.

-Combined by our initiatives to unclog the economy and turn the present unbearable 80% Workers/20% Entrepreneurs into a more manageable 60/40 ratio. Uplifting millions of workers into the next category and thus earning millions but also advancing careers for many others and opening up new jobs for the next generation.

Through these types of REAL earning initiatives, I would have done more in the war on poverty than the Liberals have done in 60 years.

 

please explain? Ok a plumber loses his licensed plumbing business because his jobs are are undercut by unlicensed illegal aliens that undercut his price because they dont have to pay insurance, llc fees as well as other licensing fees and federal taxes for their employees. The very things pushed by leftists to ensure contractors do work to code in your home. If you guys want illegals doing the work that isnt up to code then why does society bind the legal plumber to the same rules? Why not eliminate the rules fees insurance and taxes so that the plumber can compete with them and his employees can get that higher wage you want? Which is it do you want work being done to code which costs a lot more or do you want illegals doing your plumbing?
Plumbers cant work for free and I dont see a lot of them driving ferraris.

 

Zorroaster, #3, re: "What the pure free-marketeers assume
is that workers are only tools - like a hammer you discard
when it is broken. What they fail to realize is that labor
is more than just another cost of production (a cost that
must always be minimized). Labor also is the market itself.
Without buyers, sellers won't sell a damn thing. Every job
sent overseas or job taken by an immigrant or replaced by
immigration reduces the available market for producers
across the board."

Yes! You've just pin-pointed the difference between demand
side economics and supply side economics. Goods and services
only have market value when there are people who 1) desire
to buy them, and 2) have the money to do so. And a dollar
that's received from welfare, borrowed without collateral,
or even stolen contributes just as much to the creation of
the market as one that's earned by selling labor.

 

Actually, the key point is that a wage is an individual share of your countries production.

The minimum wage is price of an individual share of your countries wealth.

When wealth cost $1.60 a share, it allowed people to gain a higher piece of the wealth as it wasn't to excessive to buy each share.

At a price of $7.25 per share, you to accumulate far more income to buy a share.

At $15 a share, most Americans will effectively be priced out of gaining individual shares.

Being that we are in a global economy, you also have other labor factors and the jobless that depreciate the value of each share.



https://en.m.wikipedia.org/wiki/Wage_share

 

It's quite meaningful to farmers that have to pay minimum wage, instead of paying immigrant farm workers $2.00 an hour to pick their crops, they must now pay $7.50 an hour to Americans that only work half as good. So U.S. farmers must charge ten times more for their crops than the central and south American countries, because those farmers only have to pay 50 cents an hour to their workers. So as a result, most of the food you buy is from other countries, and our farmers go bankrupt. That's the way the cons fix America.

 

Realistically, the situation is much more dynamic. The economy is not a static pie that is simply divided up. We have an economy with a lot of unused idle capacity. In fact, industrial overcapacity is a long-term secular trend of all advanced economies; this overcapacity has been growing for many decades, even with many factories having been shut down.

This means that the size of the economy is not fixed, but can change rapidly in response to demand. The size of the economy, and by extension, the number of jobs, has been limited by the lack of consumer demand, which itself results from the number of jobs.

Thus, if a sudden uptick in demand stimulates more production, then any simplistic calculation of "wage share" would not reflect reality. Anything that increases demand will very rapidly increase the size of the calculated wage share. And this includes a minimum wage, incidentally.

Now I'm not going to sit here and tell you that a minimum wage is the general panacea for problems in the economy. But the actual relation between increases in minimum wage and employment growth at the state level has been studied extensively by economists. In general, there is no effect that you hypothesize: i.e., increases in the minimum wage do not lead to decreases in employment.

Having said that, I am open to any mechanisms that 1) increases the overall size of the economy, and 2) increase employment rates. This may include minimum wage adjustments, but I do not insist on this.

My motto is by any and all means necessary, when it comes to full employment.

 

I totally agree. The vast majority of jobs are created by small businesses and they often are not able to pay higher wages at the gov's whim, so they layoff some and force others to increase their output. In the long term, these jobs will eventually come back, but employers will have raised their prices to consumers in order to cover the additional wage costs. The outcome is everyone is back to where we were before minimum wages were raised, for the majority. Wages go up, cost of living goes up -- back to where we started. Some will always be left behind though.

Steve

 

I don't know how it works in America but in Australia fruit and vegetable workers are usually paid by how much they pick, piece work. Fruit picking is seasonal work and mostly undertaken by students or even foreign backpackers. Pickers are paid in cash. It's very rare to have a 'professional' Australian fruit picker although quite possible.

One reason farmers are struggling is because they may sell cherries to a supermarket representative for $1.50 a kilo, those very cherries end up on the supermarket shelves for $10.00 a kilo. Also, we can buy fruit (namely oranges for example) grown in America cheaper than the home-grown ones. It just doesn't make sense.

 

My impression is that you have absolutely no idea what you are talking about, and pulled this BS out of thin air.

A wage is simply a price paid for a service, based upon time compensation. No more- no less.

We are all in business for ourselves, although those considered employees have far more protections and benefits guaranteed than those considered employers.

The employee has one customer, who is buying the employee's services or skills. It's not the time the employer wants to buy- because time can be spent doing nothing, and that has no value at all. The employer wants the skill and resulting productivity of well spent time; he takes the risk that the employee will actually produce useful work rather than just kill time, but he would be obligated to pay regardless. Just like any buyer of any product- the employer is trying to buy the product that will help him achieve his goals, will be dependable and reliable, and be a good value. The greater he perceives that value to be, they higher the price he is willing to pay for it.

Thus a wage is the price of a marketed commodity- a person's productivity. If you produce nothing, you are worth nothing. If your presence makes the company money- you will be in demand, and have opportunity to move up in rank and compensation. If you think you are more valuable and your employer doesn't see it, you are free to sell your product to anyone in the marketplace who is willing to pay your price.

The employer's position is different. He has no minimum wage. If anything is left after all bills and overhead are paid, he gets a paycheck too. If not, he works free or loses money.
The employer has no unemployment insurance. He has no healthcare participation. He pays both halves of his own social security. He is an unpaid tax collector for the governments, subject to fine and penalties but never for compensation. The volume of regulation he must comply with varies, but it's always a mess as well as another risk. He is legally liable for what his employees do wrong, but they are not. Everything considered, he has a deal where there is no protection or guarantees and his success is dependent totally on himself.

If you are sure this is all BS and your employer makes all the money while you do all the work.... Please, open your own business now. Get rich quick, while you still know everything. We need more people that know so much about getting rich.