Raising the minimum wage: Good for the economy and employment

[catherine]

This just doesn't seem right.

[LDAHL]

This just doesn't seem right.

What would seem "right"?

[iris lilies]

Catherine, this chart is about wealth, not income. It uses assets as the measure.

I know with absolute certainty that a rise in minimum wage means that recipients would spend it all. There would be no more investing than there is now. In fact, you could give each household in the lower 25% $10,000 and in two years you would not see evidence of that gift in this chart because the households would have spent all of that money on consumeristic crap that does not increase wealth.

Anyone else reading Hillbilly Elegy by J.D. Vance? I will start a thread on it soon. Interesting insights into poverty.

[catherine]

Good point, IL. I've attached another chart for you.

LDAHL, in a free market economy, what difference should it make if wealth grows exponentially among a small minority of people and remains flat for everyone else? To me it's a signal of something wrong with the economy, and it makes the voice of the people very vulnerable.



The share of income going to higher-income households rose, while the share going to lower-income households fell.

The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
Most of that growth went to the top 1 percent of the population.
All other groups saw their shares decline by 2 to 3 percentage points.

[creaker]

Catherine, this chart is about wealth, not income. It uses assets as the measure.

I know with absolute certainty that a rise in minimum wage means that recipients would spend it all. There would be no more investing than there is now. In fact, you could give each household in the lower 25% $10,000 and in two years you would not see evidence of that gift in this chart because the households would have spent all of that money on consumeristic crap that does not increase wealth.

Anyone else reading Hillbilly Elegy by J.D. Vance? I will start a thread on it soon. Interesting insights into poverty.

Iris, that consumeristic crap does increase wealth - for the people making, selling it. Sometimes I wonder if the push for increased minimum wage is pushed more by the folks that stand to profit from it, rather than for any benefit to people whose wages would be raised.

Looking at the chart, minimum wage earners (actually the whole bottom 50%) are not where the potential investment dollars are anyway.

[LDAHL]

LDAHL, in a free market economy, what difference should it make if wealth grows exponentially among a small minority of people and remains flat for everyone else? To me it's a signal of something wrong with the economy, and it makes the voice of the people very vulnerable.

OK then. What would you consider to be a necessary limit on income growth?

[iris lilies]

I looked at the complete report at cbo.gov. It seems to have been released in August 2016, just recently. Odd, because Ive seen some of these charts before.

Anyway, if I am reading chart #2 correctly, one had to have only $1 million in assets in 2013 to get into the top ten percentile.

That is not a hard number to achieve. I am surrounded by people in that asset group--siblings, parents, friends. I guarantee you they got there through saving their not large salaries and investing in some form with not a lot of expertise but just common sense. They did not " invest" in consumer crap. They did not blow weekly paychecks on Air Jordans, pedicures, shiny wheels. They had the number of children they could raise with little outside help. They tend to stay married and live life drama free. They bought modest houses and paid off the mortgage. They paid cash for most everything.

They are The Millionaire Next Door personified.

I am so f-ing tired of having this lifestyle villified. Its not "right?" That is compete crap.

I will admit that I know older generations, people 50+ and up. I dont see the path to $1 million being that easy for next generations. And it may be that the next generation doesn't even want to grow assets, they will spend it on experiences. That is not wrong, but neither do internet warriors get to kvetch about poorer people when their choices purposely pu them on the bottom of charts like this.

[iris lilies]

Iris, that consumeristic crap does increase wealth - for the people making, selling it. Sometimes I wonder if the push for increased minimum wage is pushed more by the folks that stand to profit from it, rather than for any benefit to people whose wages would be raised.

Looking at the chart, minimum wage earners (actually the whole bottom 50%) are not where the potential investment dollars are anyway.

exactly. Yes! Bingo, we have a winner.

could this chart be reflecting values of the populace to some extent? Do they get to spend money on the things they value? I say, sure, whyever not?

[bae]

I'm still handling my mother-in-law's estate details. She passed away last year, ~90 years old.

She was a college professor her entire career, and divorced her husband, another college professor about 40 years ago.

She did not come from money, I visited her childhood home just a few months ago, a house smaller than my garage in a poor sheep-farming village.

Her estate, accumulated from simply saving and investing in very very boring things, was in the $3-6 million range. Some of the stocks she owned had been sitting in her account since the '40s....

[catherine]

OK then. What would you consider to be a necessary limit on income growth?

Why do you assume I would advocate for a limit on income growth?

I do think the best options for making rates in income growth consistent across class/income levels would be:

• Raise the minimum wage
• Higher taxes on the super-rich
• Close some tax loopholes
• Make all higher education 100% tax deductible. I truly don't understand why mortgages are deductible but tuition is not. Doesn't make sense to me.