Nashville Skyline. Maggie’s Farm’s Dylanologist is making the big move from Yankee-land, across the Mason-Dixon line to Nashville to pursue his career. We wish him the best, and ask that the Volunteer State treat him well. Even though he is a Yank, h…

You’re confusing me a little with your posts. First you say that you understand economics, and then you say there should be an increase in the minimum wage.

Why should the government dictate the minimum wage? If there is not a labor supply for a job, an employer will have to raise wages to attract workers. If there is a surplus of labor, why should the employer still have to deal with an artifical floor? A minimum wage increase will have one of two effects. It could cause inflation because of the artifically higher labor costs, or it will decrease the number of jobs available to low skill and no skill workers (As you pointed out about the drive-through operated remotely from India). If the latter happens, people with no income will have MUCH lower buying power than people who are making the current minimum wage. If the former happens, there is no net change in buying power for the minimum wage people.

What is happening in Congress is that the Republicans have made a poison pill for BOTH sides. The Republicans have to choke down an increase in the minimum wage while the Democrats have to accept a decrease in the death tax penalty. I wonder if that is the future of “bipartisanship” to craft legislation that has elements that both sides of the aisle like and despise at the same time.

Apparently the Republican party is trying to raise minimum wage to $7.25. They decided attaching the raise with a permanent cut to estate taxes. Minimum wage increase will phased over three years. This opposed the plan that was proposed by the Democrats a month ago. They wanted to phase the increase in two years. This might mean that drive thru windows at fast food joints will operated from all the way from India.

But seriously, the minimum wage buying power is the weakest in 50 years. There should be an increase in minimum wages, but isn’t an increase of over two dollars a bit extreme?

http://home.peoplepc.com/psp/newsstory.asp?cat=news&referrer=welcome&id=20060728/44c98bc0_3ca6_1552620060728-11820610

Don’t worry I understand economics. My father did some graduate work at University of Chicago through Illinois Institute of Technology. I just found the irony in the fact this is occurring in the birthplace of the Chicago School of Economics.

Anyway, we all know the one of the greatest costs that a company incurs due to distribution. If the wage increase drastically hurts Wal-Mart’s profit margin for the region, there won’t be anymore expansion. Other big chains will see this as a failure and avoid Chicago like the plague.

If no one will take the jobs at the wages that Wal-Mart offers, that is Wal-Mart’s problem. They have a choice at that point: raise wages or see suffering sales. If other companies have higher paying jobs that require the same level competence, Wal-Mart will have to compete. This happens.

Looking at how this law is structured is also very troublesome. It only applies to big retailers. If you prevent the big retailers from moving in by making the climate unfavorable, people have to go to smaller stores that are not chained to the idiotic law. These smaller stores could easily have poorer benefits than the big box retailer, and they will not be able to match the efficiencies of scale that the big boxes utilize. The latter just increases the costs to consumers. These are the same consumers are the people affected by the council’s law, and they lack buying power. So the council is hurting the very people they pretend to protect.

Carol

I actually I understand the reasoning behind alderman’s decision. I also understand the irony that this is occurring in “Chicago”.

If the market forces were allowed to take place in the airline industry, there would probably be only 4 to 6 airlines in the United States.

Drewsmom,

One problem is that the cost of living is much higher in Chicago than say in Alabama or even Fairfield, Illinois. While the reasoning behind forcing “big box” is understandable considering that $10.00 an hour doesn’t pay the bills quite as well as in St. Louis, it is also true that businesses will go to places where labor is cheaper. I mean look at the various auto companies setting up plants in the South.

6pence

PS- and I’m a life-long Illini.