Maybe raising two children is more important than working most minimum wage jobs, and deserves to be compenstated as such.

The Poverty Trap - this is one reason why the minimum wage was introduced, maybe the minimum wage should be raised

Social welfare in ireland has a pretty good solution, they ignore the first €20 you earn each day and then reducd your payment by 60% of whatever you earn - so no matter what, if you work you earn more than just being on welfare.

I like that a lot ......

You do realize that number the article quotes includes public housing, right? Which, of course, is vastly more expensive due to the NYC metro area, which includes Connecticut, which I'm sure you took into consideration before making such a thought provoking post. The average welfare benefits, *including* public housing, for the vast majority of US states pays about the same as an $8 an hour job, which happens to be just about minimum wage, which the article clearly says, but you instead go fall for the attention grabbing headline instead of reading the entire article. So there you go.

I guess you didn't read the article 2nd. It explicitly excludes Connecticut as separate from New York. Also rather vague argument that housing costs on welfare somehow shouldn't count while people working a job pay housing costs isn't logial. The whole point of the article is that not working pays as much as a minimum wage job so why would people choose to work. You seem unable to realize how fiscally unsustainable this type of system is. I would argue that welfare benefits need to help people only survive while they look for another job, and those benefits need to fall below the level of work to force a job search and they also need a time limit to maintain a sense of urgency in that job search.

When you raise the minimum wage you increase unemployment for people who do not possess skill justifying that level of hourly pay. Raising the minimum wage also increases the use of labor saving machinery. If that is the kind of world you want, high unemployment and increased investment in labor saving machinery the by all means raise the minimum wage, but realize the social and financial unsustainability of that policy as evidenced by the massive deficits and debt loads of nations and states that pursue it.

Emac - I hadn't realised that the recent financial crisis was caused by paying nurses and factory workers a minimum wage - I had thought it might have been connected to paying bankers millions for selling other bankers duff products. Thanks for putting me straight.

And don't forget, Marx opposed this kind of social welfare system because increased wages and improved working conditions, along with social welfare, would be used to dissuade the working class away from the revolutionary consciousness needed to achieve a socialist economy.

@Emac - idiot

Maniac- I hadn 't realized you couldn't make a clear logical point in reply to mine. What in the world the financial meltdown has to do in any way with the fiscal unsustainbility of paying welfare benefits that exceed a full-time minimum wage job is a mystery. So I obviously didn't put you straight on anything at all.

@Baby, so raising the minimum wage leads to hiring and the abandonment of labor saving machinery? Your post does display the breadth and depth of your point of view perfectly though.

Many welfare benefits are available even if you have a minimum wage job. Food stamps, for instance. I note they're not factored into the full package of the minimum wage worker, but are factored into the unemployed.

'the fiscal unsustainbility of paying welfare benefits' - but you didn't demonstrate unsustainability. Nor that it appears in any nation.

In fact you simply refer to high level of government debt, which has been policy of many western nations (regardless of what they are spending money on) aswell as individual corporations - borrowing money now, or encouraging investment in your system (be it corporation/state) is consider a standard practice for attaining profit.

And further is the process by which many developing nations (eg vietnam) have pulled themselves out of poverty toward development.

Emac, out of curiosity, what labor saving machinery will replace a short order cook at a diner or a child care provider working at a daycare? Its cute that you can read one Cato Institute article and think you have the answer to the minimum wage issue, but the fact that you merely parrot the questions posed shows you have no real integrity nor a grasp on the real world and how minimum wage actually functions in the job market.

And obviously Connecticut is a separate state from New York. I'm glad your knowledge of geography is enough to realize that they are two entirely different states. I'm referring to the NYC metropolitan area, which includes most of western and southern Connecticut in addition to everything in New York south of the Tappen Zee. I'm sure that even you can realize that having the largest metropolitan area and largest city in the United States can influence the level of welfare benefits one could receive because of the higher cost of living in a city.

There is only one way out of the poverty trap without leading to recession, increase the wealth of the lowest paid workers because there marginal propensity to consume is greater than that of the company owners and that is what keeps growth up.
The spending capacity of the richest does not and will never compensate for the cutting back of the poor, if you want continued growth in a capitalist economy give money to the poor

The University of Arizona in the 1970s argued in court that they should be allowed to pay on 75% of the US minimum wage on the grounds that the extra money would allow them to hire more people than if they paid the full amount. They lost.

Students enrolled in college were working over the 20 hours/week by taking multiple jobs in order to survive on minimum wage back in the 1980s and still were below the poverty level.

Even the fast food industry understand that they can't get workers at minimum wage. However by keeping them part timers below 40 hours/week they can avoid paying most other costs including health benefits.

Sacred digits is seems odd you would say "I didn't factor in...." Did you not read the article and realize the discussion revolved around what "the study factored in?" The study compared working a full-time minimum wage job to the welfare eligibility for a mother of two. Did you not understand the scope of the study?

2nd Whitle Line, If you asked a typewriter manufacturer in 1920 what would replace the typewriter he probably had no idea, but the typewriters effectively vanished. Do you claim to know what machine will replace what job? I certainly didn't. I did claim that a rise in wages leads to an increased replacement of human labor with machine labor.

I'm on my way to see Elysium. It should be quite a movie given the background of this thread.

So we shouldn't ask for a raise in the minimum wage because of theoretical machines that do not yet exist, such as the typewriter in 1920, which was replaced by the computer seventy years later. Got it. Well put.

Is it possible that the introduction of labour saving devices is a good thing?

- Let me see, increased productivity, check.
- More free time? possibly check, but with associated increased leisure spending, sure.
- Spurring innovation of labour saving device makers. check.

Am i missing something?

meh it's just $200T in unfunded liabilities who really cares anyway

Emac, as I'm sure you know, the real welfare that's costing this country is that which goes to the already well-off: Social Security, tax loopholes, corporate welfare, agricultural subsidies defense industry deals, and so on. I would gladly continue to pay SNAP, even twice as much, if we could stop giving billions every year to people who are already rich and powerful.

Orathaic, the introduction of labor-saving devices had a horrible impact on rural American in the interwar and postwar period, largely though not entirely due to the way that the government agricultural bureaucracy was structured. But, the problem wasn't the machinery; it was the way it was used or more specifically introduced. However, the machinery did create the possibility for mass displacement and unrest.

In general: For the United States, I think the best realistic solution is universal health care and a universal minimum income (perhaps based on county-level poverty requirements), coupled with the elimination of all welfare for both rich and poor and virtually all tax breaks. That would be better than our current system of the government putting thumbs on various scales, the worst sort of corporatism perhaps best exemplified by the loathsome Affordable Care Act.

Of course, the actual best system would be an actual free market, with healthy communities handling their needs locally and voluntary regional or national support in times of emergencies or for conditions of need bigger than local capacity. I would most prefer that, but I would also like to ride a pony to my job at the ice cream taste testing factory.

Ill answer for Sbvyl:

"We should just kill them."

@Ckrobert, I know you admitted that your 'best system' was unrealistic, but based on research like this: http://www.bbc.co.uk/news/science-environment-23623157

I think it is more than unrealistic, but impossible.

I suspect that the kind of local and voluntary community charity is undermined by the kind of free market stuff you're talking about. (though that article isn't enough to leap to this conclusion, i think it points in the direction of this leap)

There is a step where we replace personal relationships and trust with money (do you ask a friend for money when you offer to cook them dinner?) Money changes the nature of social interactions - what is a commodity in the 'actual free market', well i guess it is everything. Sex, friendship, food, shelter, land, ideas - prostitution replaces other sexual interactions; social/psychological support replaces friendship... the list goes on and on - but why? Because money changes how we think about our interactions. It alters basic human behaviour.

I think that an actual free market is possible, i just don't think it is ideal.

ck, the biggest reason that machinery caused a huge problem for rural America is because large parts of the country were reliant on a massive amount of unpaid labour unwillingly given. If the mechanisation had been more gradual, as it would have been with more expensive labour, then there would have been far fewer issues.

Orathaic, my concerns about its realism are entirely political, not practical. At least in health care, I think we could have a blended system. Catastrophic health care plans run by large national corporations (though, in a true free market, I believe we'd have far fewer of those, so I might be mistaken about this) would be relatively inexpensive, supplemented by mutual aid societies, professional organizations, and the like.

I also want to emphasize the difference between a free market society, a society which genuinely values free and fair competition of goods and services and ideas, with a merely capitalist or materialist one. A free market economy does not mean one in which all personal status is measured by wealth. The American Indians had a free market (but not capitalism) economy, and personal wealth for them was almost meaningless compared to the Western world today. It's all about values, including the values which shape the power and influence of the government. You might almost say I am advocating an anti-capitalist free market system.

Admittedly the years of government intervention in the economy have greatly warped public perception of things like poverty and charity, perhaps beyond recovery, but I am confident that a different system, free from the weighty hand of federal influence and less inclined to support the consumption ethos of international business, could succeed, at least in the United States. For one thing, America is so, so rich. I don't think people appreciate how rich America is because the wealth is so imbalanced, the government is such an expensive weight, and the culture is so materialistic (this last might sound counter-intuitive but I hope you understand -- we value the wrong kind of material wealth). But America is almost, or least could be, almost a post-scarcity society. Eliminate the varied government programs which promote the imbalance of wealth and promote a more local-oriented social outlook, and most communities could easily provide all of their members with food, clothing, health care, comfortable housing, and entertainment with less work than we currently engage in today.

Of course, we don't do that and most people don't think about that. Instead we live under a different kind of system, promoted by big business and backed up by the coercive power of the government's military and police powers. But we don't have to live the way we do.

Mendax, I agree but not entirely. If I might ask, which unpaid labor are you talking about? I am referring to the period between, say, the 1920s and the 1980s. The federal government, through programs like the Extension Service and other agricultural bureaucracy, promoted a particular kind of mechanization, one that favored the already-powerful (for example, providing information and government credit only to certain kinds of farmers). It also encouraged time and effort to go into promoting large-scale agricultural efficiency, either ignoring or actively hindering things which could have kept medium sized farmers going.

@ck - i think that the materialism in US culture is a consequence of freedom of speech (for corporations) and advertising, in a 'free market'.

It may infact be possible to massively regulate corporate speech while keeping personal speech free, but i don't know that this is easy or practical.

And now of course i'm not sure what you're saying...