Calls to hike minimum-wage sparks new job market fears
Time to scrap mandate altogether?
- Duration 8:37
- Date Feb 16, 2013
Time to scrap mandate altogether?
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The minimum to the -- ex President Obama repeating calls today.
Hike in the federal minimum wage to nine dollars an hour.
But some folks here say don't raise it get rid of it and that will really help jobs right.
Hi everyone I'm Brenda Buttner -- his Bulls and Bears let's get -- -- it.
Yeah I've apple then there's this week -- -- -- John Layfield.
Jonas Max Ferris along with Larry Glazer.
And Caroline help -- welcome -- everybody -- Gary beat forget hiking the minimum wage he's faced wrapping it altogether is how to create better paying jobs.
Have absolutely -- look it's all summed up with one simple example states with the highest minimum wage shouldn't.
In many cases higher than the current minimum wage that the the Fed.
Federal government outlines have higher unemployment than those states would lower minimum wage look.
It is simple economics something which this a current administration does understand.
When you raise the cost of labor you have a surplus of labor that's true in commodity stocks whatever.
When you have a surplus of labor what do you have Brenda you -- higher unemployment and simple as that this administration doesn't under.
-- so what do you think that that Carolina this help or hurt unemployment if we just got rid of the minimum wage.
I think that would be a terrible idea and I would disagree with Gary -- actually those studies have spurious for you and that's just curious relationship they have other variables.
Causing those differences because two decades of rigorous -- -- -- indicate.
That when you raise the when you do it any planned away -- mild way and you raised the minimum wage that it actually has positive effects on the local economy.
On that actually has positive effects in terms of lower training costs and turn over.
And less lost time at work more dedicated employees.
So small businesses midsize and large businesses benefit from this as well as a local governments because they don't have as many people relying on social services.
So the data doesn't back that up in fact it's a positive thing when we do it in a plan for fashion to race than the minimum wage.
Well on this issue it's just like an economist on the one hand on the other hand there are studies on both sides.
But -- -- there isn't argument that higher minimum wages reduces -- over which.
At lessons of the cost to employers and -- back and actually increase employment.
We'll have -- just thirty dollars you would never leave the job if you could get -- -- pretty good wage and there are benefits and negatives both sides are Connor right on this there are.
Look at the new -- is really low like two dollars it would actually disrupt the job market all but it was.
Fifty dollars obviously to be very high unemployment like -- -- -- -- France for their higher minimum wages.
So -- -- -- some level between over the negatives would exceed the positive Hamas and are positive Wal-Mart workers would get more money under this plan.
And they're not gonna get outsourced to China you need -- in the stores so some benefits but there's a lot of losers -- be higher unemployment certainly at some point in other negatives.
I sort of think -- should.
Due to the bottom of the -- -- do ball which is index it to inflation which they should do it anyway because it lets certain politician benefit from saying they're gonna raise it every every few years.
And if it raises the unemployment rate a couple years and get wind of it all together you prove that it's bad for the economy is so we can kind of see what actually happened and maybe it should be index had to average wages and seven inflation but but John is more black and white.
Should we -- -- or scrap -- what's better for the job market.
I think Harvard avenue at what you don't Brenda I think is the best thing to do and and that is index -- to average wages -- that -- far.
Most people has said look the data does not support this.
The White House the only study they could find was a -- intense study that has more people debunking at that people saying.
That it is a real study.
Oh -- there are being come tax credit does more for lower income people.
-- raising the minimum wage that we have almost fifty million people in poverty right now.
And the only thing the administration can do is say what will we can't create jobs so let's just have people pay people more this is not the way to do we have 44% young person and implement.
African American a young person that implement.
This does not help in fact this directly hurts.
Okay Larry -- an addiction in just a minute but I wanna have Caroline have a chance to respond to some of these comments.
Well I would very much agree the Jonas that there is a imbalance here right we couldn't raise it to thirty dollars an hour that would make sense.
But I would disagree with John that there are numerous studies from two decades of research if you go to the -- -- -- economic policy institute for example there website lists many of these studies.
And they're very sophisticated and they show that there are not ill effects but I would agree with you that something like you know an earned income credit.
Would be better in terms of stimulating the economy but this isn't a bad start.
Well -- actually the president isn't saying that this is a boosted the economy it's more about fairness I believe but.
But Larry if you increase if you raise the price of employment you basically decrease the demand for employment doesn't come down to that.
That's exactly right Brenda and you know the.
Irony here this is intended to help those that need it the most its intended to help the economy.
But I have the opposite affect what we will see that's -- I don't believe any of the studies on either side.
They what was figure reality is companies well outdoors where ever they can -- also automate.
Visit your local retailer visit your local grocery store you'll see more more automated check out that the companies will do for self preservation.
And ultimately who pays for this the consumer any increase in wages are gonna get passed through to you and me we will pay more to distort some -- that there's no free lunch it sounds great on paper it sounds great academic theory.
In reality is these policies -- just do not and have not worked in the past and end.
We're not talking about the past now Gary they were talking about really the future we have a very tepid recovery is this the time to be raising a minimum wage.
They'll act act absolutely not EO Larry hits on a key point.
Is that let's take.
Jonas is Wal-Mart example let's just say -- minimum wage was bumped up and they had to pay this what's Wal-Mart gonna do.
They're gonna raise prices to absorb that cost wide right and they do that.
Because they know that Kmart and target across the street.
While also get hit with a minimum wage so that just -- it because -- now.
There are not going to be -- disadvantage.
And where does that cost don't do it goes to the consumer so everyone pays for this minimum wage which by the way studies have shown barely -- backs.
Those in poverty in -- only -- -- The average household where the person a minimum wage earns 48000 dollars.
Okay -- let's get to that point that this really affects more than just the workers that -- an impact on consumers.
Was sure it is an impact on consumers but I would challenge this notion that it won't.
Benefit businesses to the point where -- where they -- they will need to raise prices.
The fact is businesses will benefit if they treat their employees better study after study has indicated -- not just academic theory.
That you have less time off of work you have lower recruitment and training costs which means that your employees stay there longer which means they're less reliant on public services so taxpayers benefit.
Corporations benefit so I think you'd be hard pressed to make the argument that consumers are really gonna get shafted on this one John you wanna answer yeah.
And how -- How in the world can you say this is not gonna affect our business is when it's a 24%.
Raise only what you have to pay your employees.
I -- where they get nine dollars an hour look we haven't had inflation for the last number of years that's measurable anyway.
Why do you pick nine dollars this is a political thing that the that the president in the White House is doing.
That's simple reality as we have 27 million Americans out there that are true low income Americans.
-- -- Americans that don't even have the skills to fill out a job application they're the ones that are going to be hammered -- obvious they're the ones there to left on the call this gonna do more harm than good for the low income people.
Get -- whatever's on Sundays and it still have winners and -- no question about it I will say even getting rid of it -- it did a minimum wage isn't gonna magically get these jobs back from China or -- removed automated checkout line from Home -- like that technology shares today and those jobs aren't coming back at a dollar an hour so there's there's not gonna make all the troubles and are going having no minimum wage but raising it to -- -- -- -- gonna magically solve the problem of poverty in this country either.
Gary -- plant the last part.
Well we yeah we -- tried this form of -- wage and price control we sure that.
Many many times we try to iron Nixon we -- report it's been proven that it doesn't work it.
It's assuming that the government is all knowing and all been about price -- -- -- up like that we need to get off this idea that the government.
-- knows what the right prices to pay teenagers out.
They are for crying out loud -- okay that's going to be -- last word thanks guys.