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Old 08-02-2019, 05:14 PM
thelurkinghorror is offline
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Why are most minimum wage proposals in the US $15?


What is special about that number, is there are particular study or statistic involved?
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Old 08-02-2019, 05:22 PM
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I figured it was because they liked the idea of more than doubling the current minimum wage.
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Old 08-02-2019, 05:32 PM
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When adjusted for inflation, federal minimum wage in 1968 was $12.I think that is setting the floor on what is acceptable.
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Old 08-02-2019, 05:53 PM
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I figured it was because they liked the idea of more than doubling the current minimum wage.
True for fewer than half the states whose minimum don't exceed the federal mandate.

Last edited by OldGuy; 08-02-2019 at 05:53 PM.
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Old 08-02-2019, 06:01 PM
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Regarding why everyone is doing the same, "Fight for 15" started in New York before spreading across the country. Certainly a lot easier to keep everyone fighting for the same amount than changing in every state you go to.
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Old 08-02-2019, 06:26 PM
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Regarding why everyone is doing the same, "Fight for 15" started in New York before spreading across the country. Certainly a lot easier to keep everyone fighting for the same amount than changing in every state you go to.
Thanks, that gives a starting data point. It looks like in 2012 the minimum wage was $7.25, which yes, could be a rounded doubling, but nothing definite from what I can see. But then this was NYC-based, which had a higher minimum wage, and I'm having trouble finding what it was at that time.
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Old 08-02-2019, 07:23 PM
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A history of the minimum wage in New York state is given here:
https://labor.ny.gov/stats/minimum_wage.shtm

The minimum wage in New York City has been higher and increased to $15 at the start of 2019 for firms with more than a few non-tipped employees.
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Old 08-02-2019, 07:37 PM
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While you'uns are doing an admirable job of keeping your answers so far appropriate for GQ, I think that this question is by its nature better suited for GD. Moving.
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Old 08-02-2019, 08:26 PM
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My assumption was that at $15 they could negotiate down.

If you start at $15, maybe you could compromise at $12. Whereas if you demand $12 and someone else says no, where do you go? You negotiate down to $10. Its better to start from a higher position and negotiate downward.

Also $15 is a good minimum wage, but a wage of something higher like $20 starts to make people uncomfortable because then it feels 'too' high. I'm guessing they focus grouped it and found $15 was a wage that didn't cause resistance but was about the highest they could get (its halfway between $10/hr and $20/hr).

This is all personal opinion, probably unrelated to the real reasons.
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Old 08-02-2019, 09:51 PM
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Originally Posted by thelurkinghorror View Post
What is special about that number, is there are particular study or statistic involved?
The US poverty line is ~$12.50/hour for a nuclear family, over $5 more than the current federal minimum; $15/hour lifts someone working full time above the poverty line, something most proponents of a raise consider essential.
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Old 08-02-2019, 10:28 PM
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Maybe it goes without saying, but I should add that, after meeting certain thresholds and criteria, it’s just a good, simple number that’s easy to use in a simple measage about wage, in a way that $16.42 or $14.79 would not be.
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Old 08-02-2019, 11:23 PM
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[Moderating]
While you'uns are doing an admirable job of keeping your answers so far appropriate for GQ, I think that this question is by its nature better suited for GD. Moving.
I guess people can debate it now, but I want to be clear that I don't really have a desire to debate the merits of a raise or not. I only am asking why $15 specifically and not $14 or $16 or $13. Yes, it's a nice even number, which may be the reason why the movement in NYC started, and everyone else is just piggybacking on that.
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Old 08-02-2019, 11:38 PM
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My assumption was that at $15 they could negotiate down.
And we ended up with a negotiated down result here in Oregon. A somewhat complex one too, what with three different geographic minimums and different graduated increases for each region. And we don't actually make it to $15, although the Portland region gets to $14.something at the end. After that, the annual cost-of-living increases will resume, though, so it'll get there in a year or two.
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Old 08-03-2019, 06:46 AM
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I guess people can debate it now, but I want to be clear that I don't really have a desire to debate the merits of a raise or not. I only am asking why $15 specifically and not $14 or $16 or $13. Yes, it's a nice even number, which may be the reason why the movement in NYC started, and everyone else is just piggybacking on that.
Then I will respect your desire for factual responses. Although mine is a guess.

If the movement started in NYC, the MIT Living Wage* for a single adult living alone and working 1 FTE is currently just shy of $16. My guess is that it was closer to $15 when the movement started. I don't see historical rates on their site.

* http://livingwage.mit.edu/metros/35620

The merits of their calculations can be debated (in both directions), as can the wisdom of raising to that target, but that's not what we've been asked. They may not have used the MIT math either, but something similar.

I have my own opinions on the MW but I'll save them for another thread.

Last edited by Ruken; 08-03-2019 at 06:47 AM.
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Old 08-03-2019, 03:43 PM
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Nah, you can discuss opinions now if it is ultimately in GD. My position is basically agnostic, I see merits in both positions.
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Old 08-04-2019, 12:29 PM
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My assumption was that, even if the MW was raised to $15, it would take years to ramp up to that, and in a few years $15 would be closer to where it "should be", (in cost-of-living/inflation terms).
IIRC, they don't just say "It's $15 now." They say "On Whatevertember 31, 2019 the minimum wage will be raised to $9.50. On Whatevertember 31, 2020 the minimum wage will be raised to $11.75. On Whatevertember 31, 2021, it will be raised to $14........

ETA: It's like leading your target: you don't aim for where it is now. You aim for where it's going to be when it finally hits.

Last edited by Rucksinator; 08-04-2019 at 12:31 PM.
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Old 08-05-2019, 09:11 PM
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The real answer is, "They pulled it out of their ass." There are no economic theories or empirical evidence that $15 is the 'right' number, or even that there IS a 'right' number other than whatever prevailing wages are already set by the market. Minimum wages are a form of price control, and they are among the more destructive ways an economy can be messed with as they destroy information about supply and demand.

For that matter, it's ridiculous to have a national minimum wage, because the cost of living varies dramatically around the country. $15/hr in San Fransisco gets you a tent if you can find a place to pitch it. $15/hr in rural Texas or Louisiana is a whole other thing. This is one area where states should be setting their own minimums if they want them. A national minimum wage is crazy.
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Old 08-06-2019, 07:17 AM
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For that matter, it's ridiculous to have a national minimum wage, because the cost of living varies dramatically around the country. $15/hr in San Francisco gets you a tent if you can find a place to pitch it. $15/hr in rural Texas or Louisiana is a whole other thing. This is one area where states should be setting their own minimums if they want them. A national minimum wage is crazy.
Bullshit. A national minimum wage is only a bad idea if the individual states are taking effective action and already setting a minimum that meets the goal of the national: moving people with full time employment above the poverty line relative to the cost of living in that state. That isn't happening, and likely won't. Despite the purported low cost of living in Louisiana, nearly 20% of the population falls below the poverty line.

The five US states with the highest poverty levels are Arkansas ($9.25), Kentucky ($7.25), Mississippi (No State Minimum), Louisiana ($7.25), and New Mexico ($7.50).

And the so-called impact on the consumer is also bullshit. Prices can't simply be raised on a whim - people will stop buying the product, or buy less of it, when the price exceeds the value they place on it.

The real impact of higher employee wages is reduced profits for the wealthy, and that's why the concept meets so much resistance. And those reduced profits are voluntary - the rise in payroll for entry-level employees could easily be offset by reducing executive salaries and/or bonuses.
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Old 08-06-2019, 07:50 AM
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And those reduced profits are voluntary - the rise in payroll for entry-level employees could easily be offset by reducing executive salaries and/or bonuses.
Could I get a cite for this specific claim - that a rise in MW can generally be offset by reductions in executive salaries and bonuses? Especially in instances like franchises and small businesses. TIA.

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Old 08-06-2019, 08:48 AM
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Could I get a cite for this specific claim - that a rise in MW can generally be offset by reductions in executive salaries and bonuses? Especially in instances like franchises and small businesses. TIA.
I'm not sure there is a cite- because I'm not so sure the claim applies to "franchises and small businesses". Because the claim wasn't just that the rise in MW could be offset by reductions in executive salaried/bonuses - it was that "reduced profits" are voluntary, that is a company could either reduce profits to offset a rise in the minimum wage or reduce executive salaries and bonuses.

And the reason I say the claim wouldn't apply to franchises and other small businesses is because the owners/executives are generally the same people and profits/executive salaries and bonuses are simply different characterizations of money going to the same people. I know someone who used to complain constantly that his business didn't show a profit. He was paying well over $1M a year in salary to himself, his wife , his two minor children and his mother ( who were all "vice presidents) , although only he actually worked in the business.* Either didn't understand or didn't accept that his "profit" was going to the salaries for the no- show jobs.

So if my local McDonald's has to pay an extra million dollars a year because MW is now $15, it doesn't really matter if the $1M comes out of the profits ( which are split between the hypothetical four owners) or from the salaries the four are paying themselves. If my dry cleaner needs to pay an extra $14K to the counter help, it's costing him and only him, whether it's reduced profit or if he reduces his own salary.It's a different situation with corporations which have stockholders who aren't also "executives" - it that case, you can reduce profits without affecting the executives and reduce executive pay without affecting the stockholders directly.





* I am not sure about his reasons for this - I assume taxes. And I also assume it was at least shady, if not outright illegal.

Last edited by doreen; 08-06-2019 at 08:51 AM.
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Old 08-06-2019, 08:49 AM
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That isn't happening, and likely won't. Despite the purported low cost of living in Louisiana, nearly 20% of the population falls below the poverty line.
These aren't two different facts, in opposition to each other.

The cost of living tends to be lower in poorer regions. The cost of living tends to be low largely because the region is poor. Poor people earn lower wages. (This is a key reason why they are poor.) This means that getting basic services from people in those regions tends to be lower, because those services don't cost as much. For the same reason, businesses in those regions are only going to be able to afford lower average salaries: their revenues are lower, because the region is poorer. This is why a restaurant in bumfuck Alabama will immediately go out of business if it has to pay Manhattan wages for its workers.

Wages in different regions are different for a reason.

A uniform wage for all regions in the country, both rich and poor, is an extremely poor idea. There is a reason why prices are different in different places, including the price of labor.


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And the so-called impact on the consumer is also bullshit. Prices can't simply be raised on a whim - people will stop buying the product, or buy less of it, when the price exceeds the value they place on it.
This is an argument against the minimum wage itself.

Last edited by Hellestal; 08-06-2019 at 08:49 AM.
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Old 08-06-2019, 11:01 AM
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Bullshit. A national minimum wage is only a bad idea if the individual states are taking effective action and already setting a minimum that meets the goal of the national: moving people with full time employment above the poverty line relative to the cost of living in that state. That isn't happening, and likely won't. Despite the purported low cost of living in Louisiana, nearly 20% of the population falls below the poverty line.
We should not judge ideas and policies on what they intend to do but on what they actually do. While minimum wages intend to move people with full time employment above the poverty level, they also move people with full time employment into part time employment and reduce the overall level of unskilled work.
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Old 08-06-2019, 12:41 PM
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I'm not sure there is a cite- because I'm not so sure the claim applies to "franchises and small businesses".
I'm quite sure there isn't a cite, because franchises and small businesses are going to be subject to minimum wage laws just as much as the largest corporation.
Quote:
Because the claim wasn't just that the rise in MW could be offset by reductions in executive salaried/bonuses - it was that "reduced profits" are voluntary, that is a company could either reduce profits to offset a rise in the minimum wage or reduce executive salaries and bonuses.
If you can't cut executive salaries and bonuses, and if it is true that
Quote:
Prices can't simply be raised on a whim - people will stop buying the product, or buy less of it, when the price exceeds the value they place on it.
the reduced profits aren't voluntary.

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Old 08-06-2019, 05:36 PM
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A national minimum wage is only a bad idea if the individual states are taking effective action and already setting a minimum that meets the goal of the national: moving people with full time employment above the poverty line relative to the cost of living in that state.
People who worked full time over the previous year who are living in poverty was 2.7% of the workforce. In 2017. That number's been dropping, so it's probably lower now, but I haven't seen newer numbers yet from BLS.
And of course the (official, although there are two of them for whatever reason) poverty level depends on household size. The federal minimum wage does not leave a single adult working one FTE under the line. Or two adults living together working two FTEs, even if they have a few kids.


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That isn't happening, and likely won't. Despite the purported low cost of living in Louisiana, nearly 20% of the population falls below the poverty line.

The five US states with the highest poverty levels are Arkansas ($9.25), Kentucky ($7.25), Mississippi (No State Minimum), Louisiana ($7.25), and New Mexico ($7.50).
Not surprisingly, these states have labor force participation rates below average. The primary indicators for poverty are not working or only working part time.

I think we are rich enough to help people who can't earn enough to get by. Hell, I think we are rich enough to help even a fuckup who can but won't earn enough to get by. If someone can't earn enough to meet their needs, then the burden on me to help them is still reduced by them getting a job -- the employer isn't suddenly obligated for the remainder just because the employee has, say, seven kids (HHS poverty level = $43,430).

If one of the working members of my household decides a get a $7.25/hr job, my household will not be in any need of extra help. A household with a $15/hr earner might need it though. The MW does not target the extra income at the households who need it. Whereas taxing you and me and targeting the actually people in need does.

Last edited by Ruken; 08-06-2019 at 05:38 PM.
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Old 08-07-2019, 09:18 AM
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I agree with the idea that minimum wages distort the market. If they are implemented the way that someone like AOC wants to, we would probably end up with inflation rising to a level to meet the new minimum wage, which would then have to raised again.

One issue is that those people already making more than minimum wage will demand an increase as well, and then the price of the goods / services from those workers will increase. For example, if public employees like teachers, police, firefighters, etc. all got raises, some of that would be paid for by an increase in taxes on those people now making $15 per hour. The same goes for the price of basic goods. If the entry level workers at Walmart make $15 and the more experienced workers are up into the $20s, the prices at Walmart will go up to cover those salaries. The only way it works is if the Walton family (and the owners of the companies in general) to volunteer to reduce their own profits. I don’t see any way of accomplishing that.

I think a better idea would be a minimum basic income which is slowly phased out for those who earn more than whatever the minimum is to avoid causing an incentive to not work.

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Old 08-07-2019, 03:53 PM
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One issue is that those people already making more than minimum wage will demand an increase as well, and then the price of the goods / services from those workers will increase. For example, if public employees like teachers, police, firefighters, etc. all got raises, some of that would be paid for by an increase in taxes on those people now making $15 per hour. The same goes for the price of basic goods. If the entry level workers at Walmart make $15 and the more experienced workers are up into the $20s, the prices at Walmart will go up to cover those salaries. The only way it works is if the Walton family (and the owners of the companies in general) to volunteer to reduce their own profits. I don’t see any way of accomplishing that.
There should already be plenty of recent data on the economic impact of such raises, at least on the regional level. When Amazon bumped their starting rate to $15 last year, it pushed the local Wal-Mart to raise theirs by $2, to $12/hour and nearby Toyota to move their starting rate to $19 a bit later. Despite a state minimum of $7.25, that's 2 of 3 of the largest employers in Central KY offering more than double that. Only price fluctuations I've noted personally is the usual - gas prices. No foundering franchises or closed small businesses, to my knowledge.
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Old 08-07-2019, 04:42 PM
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Why should there be a federal minimum wage? The states are free to set a minimum wage that is greater than the federal limit. Each state or even municipality can establish an appropriate minimum wage for the their market and cost of living conditions.
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Old 08-07-2019, 05:18 PM
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Why should there be a federal minimum wage? The states are free to set a minimum wage that is greater than the federal limit. Each state or even municipality can establish an appropriate minimum wage for the their market and cost of living conditions.
The main reason for the feds to do it is if they think the states aren't doing it well enough. This is clearly something that could be fine tuned to be more efficient at the local level (though telecommuting people would still game it), but if the states ain't doing it the way the feds want it done, then the feds are going to ponder picking up the slack.
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Old 08-07-2019, 05:27 PM
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The main reason for the feds to do it is if they think the states aren't doing it well enough. This is clearly something that could be fine tuned to be more efficient at the local level (though telecommuting people would still game it), but if the states ain't doing it the way the feds want it done, then the feds are going to ponder picking up the slack.
Shouldn't the people in the state be driving this for their own community? Why should the federal government step in if the people of the state think their state's min wage is appropriately set?

In other words, why should New York set the minimum wage for the entire country?

Last edited by Omar Little; 08-07-2019 at 05:28 PM.
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Old 08-07-2019, 05:53 PM
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Could I get a cite for this specific claim - that a rise in MW can generally be offset by reductions in executive salaries and bonuses? Especially in instances like franchises and small businesses. TIA.

Regards,
Shodan
Not only that, but it can be "easily" done. Still waiting for this magical leftwing unicorn fairy that gives out free money at no cost to society.
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Old 08-07-2019, 06:20 PM
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Shouldn't the people in the state be driving this for their own community? Why should the federal government step in if the people of the state think their state's min wage is appropriately set?

In other words, why should New York set the minimum wage for the entire country?
This presumes that the people who run the state are decent people who both give a flying crap about their populace and a competent enough to adjust things toward that end. That's not necessarily a sound assumption.

Admittedly, it's also not sound to think that the federal government has decent competent people running it (obviously), but a difference in priorities could easily explain why the federal government might think the state isn't doing a good enough job on its own.
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Old 08-07-2019, 06:21 PM
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I found an article on Marketplace's website (the radio program) which says in November of 2013, a Mr. David Rolf in SeaTac, Washington picked the number as "leverage" during negotiations to unionize airport workers (Bergman, 2015):
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Originally Posted by Bergman for Marketplace
That day is already here, but the funny thing is Rolf never set out to raise SeaTac’s minimum wage, much less start a national movement. His original goal was to unionize workers at Sea-Tac airport.

When employers – led by Alaska Airlines – played hardball, Rolf put a $15 minimum wage proposition on the city ballot as leverage.

It won by just 77 votes.

“Things could have gone very different had the airlines said we’ll bargain a contract,” Rolf says. “Those workers may have had $15, but it might not have been on the ballot. It would have been in the union contract, and it would have just been for those workers.”
This is backed up by a New York Times article dated November 26 of that year (Johnson, 2013):
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Originally Posted by Johnson for the New York Times
After weeks of ballot counting, elections officials said on Tuesday that voters in this small city south of Seattle had in fact approved by 77 votes the highest municipal minimum wage in the nation, $15 an hour, more than twice the federal minimum.

...

Washington already has the highest state minimum in the nation, at $9.19...
Bergman, B. (2015, January 30). The accidental origin of the $15 minimum-wage movement. Marketplace. Retrieved August 7, 2019 from https://www.marketplace.org/2015/01/...wage-movement/

Johnson, K. (2013, November 26). Voters in Northwest City Back $15 Minimum Wage. The New York Times, p. A15.


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Old 08-07-2019, 06:55 PM
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This presumes that the people who run the state are decent people who both give a flying crap about their populace and a competent enough to adjust things toward that end. That's not necessarily a sound assumption.
So even though the state's citizens elect their own officials, it is your feeling that the federal government has the right to step in push its own agenda to the state if it doesn't agree with what the voters of that state have adopted through their own representatives?
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Old 08-07-2019, 07:30 PM
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Minimum wages distort the market in that they abolish pauper labor. The theory is that the jobs that are no longer economical are jobs we're happy to be without.
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Old 08-07-2019, 08:06 PM
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Except most people working MW jobs aren't living in poverty.
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Old 08-07-2019, 08:23 PM
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Minimum wages distort the market in that they abolish pauper labor. The theory is that the jobs that are no longer economical are jobs we're happy to be without.
You would rather them be 100% poor than 40% poor?
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Old 08-07-2019, 08:25 PM
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Minimum wages distort the market in that they abolish pauper labor. The theory is that the jobs that are no longer economical are jobs we're happy to be without.
People with limited skills work those kinds of jobs because they believe that earning that money is better than the alternative. Preaching to them from a position of relative comfort that they're better off not having a job, better off not earning their own living because their work is beneath one's dignity is not a morally enlightened position. Quite the opposite.

I think most of the empirical research indicating that the minimum wage has little or no dis-employment effect relies on extremely poor data and is unconvincing. (Which is not necessarily a fault of the researchers: most data of this type is poor.) But at very least, they support the policy because they think people won't lose their jobs from it. They might be mistaken (I think they are), but at least they don't look at the data and say "Yep! The poorest and most vulnerable among us will lose a primary income stream, what a great policy!" I don't believe I've ever come across such a perversity before.
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Old 08-08-2019, 07:59 AM
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Originally Posted by Omar Little View Post
So even though the state's citizens elect their own officials, it is your feeling that the federal government has the right to step in push its own agenda to the state if it doesn't agree with what the voters of that state have adopted through their own representatives?
The federal government has in interest in reducing poverty for all of its citizens. But, it specifically has an interest because many welfare programs are paid for in part or wholly by the federal government (food stamps, Medicaid, school lunch programs, at least). Increasing the minimum wage nationally may help raise some people from poverty, reducing their reliance on these federal programs.
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Old 08-08-2019, 08:48 AM
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Originally Posted by RitterSport View Post
The federal government has in interest in reducing poverty for all of its citizens. But, it specifically has an interest because many welfare programs are paid for in part or wholly by the federal government (food stamps, Medicaid, school lunch programs, at least). Increasing the minimum wage nationally may help raise some people from poverty, reducing their reliance on these federal programs.
If the feds truly had an interest in reducing poverty , they would do away with their cliffs of poverty
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Old 08-08-2019, 09:18 AM
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Could I get a cite for this specific claim - that a rise in MW can generally be offset by reductions in executive salaries and bonuses? Especially in instances like franchises and small businesses. TIA.

Regards,
Shodan
I'm a small business owner. All current employees are paid more than the current Minimum Wage, but a substantial jump in MW would mean I'd cut back on the number of employees.
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Old 08-08-2019, 09:57 AM
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I'm a small business owner. All current employees are paid more than the current Minimum Wage, but a substantial jump in MW would mean I'd cut back on the number of employees.
Maybe you can explain to epbrown01 why you don't just reduce your own salary or accept a cut in profits.

Regards,
Shodan
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Old 08-08-2019, 10:06 AM
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Maybe you can explain to epbrown01 why you don't just reduce your own salary or accept a cut in profits.

Regards,
Shodan
Because I'm too old to look at the big picture. If I am not profiting running a business, I might as well walk away and either apply for a job or else sit at home and let my gf support me to retirement.

Permanently hanging a "CLOSED" sign is a frequent temptation for small business owners who seem to get screwed over from every angle.
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Old 08-08-2019, 10:10 AM
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I'm a small business owner. All current employees are paid more than the current Minimum Wage, but a substantial jump in MW would mean I'd cut back on the number of employees.
Is that because you have different product lines, with different levels of profitability, and the minimum wage increase would make the least profitable product lines unprofitable? Or would you need to raise your prices across the board to maintain profitability, and you'd suffer less of a hit with higher prices and a lower volume of sales than trying to maintain your current sales volume?
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Old 08-08-2019, 10:12 AM
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Is that because you have different product lines, with different levels of profitability, and the minimum wage increase would make the least profitable product lines unprofitable? Or would you need to raise your prices across the board to maintain profitability, and you'd suffer less of a hit with higher prices and a lower volume of sales than trying to maintain your current sales volume?
Honest answer? I'm too close to retirement to consider those things and would just go for the easiest solution.

ETA: additionally, I'm selling my time (a service) more than I'm selling goods.

Last edited by kayaker; 08-08-2019 at 10:13 AM.
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Old 08-08-2019, 10:49 AM
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Originally Posted by Wrenching Spanners View Post
Is that because you have different product lines, with different levels of profitability, and the minimum wage increase would make the least profitable product lines unprofitable? Or would you need to raise your prices across the board to maintain profitability, and you'd suffer less of a hit with higher prices and a lower volume of sales than trying to maintain your current sales volume?
In my experience with healthcare, most of the rates are based on the government's rates. We do not have the freedom to raise prices, and our profits are a fixed percentage over what the government says are the costs (eg: 6% for physician administered drugs). Some of that "profit" goes towards maintenance and other business-related expenses, which can cut actual profit down to the low single digits for most patients, and into the negative for Medicaid patients. If a new minimum wage raises our expenses more than that margin, but the government fails to increase their rates, the only options are to 1) downsize, or 2) pay the doctors/owners less.

~Max

Last edited by Max S.; 08-08-2019 at 10:50 AM.
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Old 08-08-2019, 11:13 AM
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People with limited skills work those kinds of jobs because they believe that earning that money is better than the alternative. Preaching to them from a position of relative comfort that they're better off not having a job, better off not earning their own living because their work is beneath one's dignity is not a morally enlightened position. Quite the opposite.

I think most of the empirical research indicating that the minimum wage has little or no dis-employment effect relies on extremely poor data and is unconvincing. (Which is not necessarily a fault of the researchers: most data of this type is poor.) But at very least, they support the policy because they think people won't lose their jobs from it. They might be mistaken (I think they are), but at least they don't look at the data and say "Yep! The poorest and most vulnerable among us will lose a primary income stream, what a great policy!" I don't believe I've ever come across such a perversity before.
I’m reading Lumpy’s point differently than you are. In many places, there are large markets of unskilled labour. That means that the natural price for the unskilled labour is quite low, regardless of the profit that is made off of that labour. Some of the businesses demanding that labour will be making minimal profits. However, with cheap labour, most of the businesses will be making significant profits. Raising the minimum wage both reduces the profits of the business making significant profits, and puts the businesses making minimal profits out-of-business. The “pauper labour” Lumpy referred to is the labour that was going into the businesses that previously were making a minimal profit and have now gone out of business. It has nothing to do with whether that work was dignified.

The hoped-for outcome from raising the minimum wage is that putting money into the pockets of the lowest wage earners will have a stimulative effect on the economy that will exceed the negative effects of the reduced profits and closed businesses. This effect should expand the economy and lead to new different jobs. The risk of raising the minimum wage is that it has diminishing returns as an economic stimulus. If the minimum wage is set too high, that hoped-for outcome won’t happen.
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Old 08-08-2019, 12:27 PM
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The hoped-for outcome from raising the minimum wage is that putting money into the pockets of the lowest wage earners will have a stimulative effect on the economy that will exceed the negative effects of the reduced profits and closed businesses. This effect should expand the economy and lead to new different jobs. The risk of raising the minimum wage is that it has diminishing returns as an economic stimulus. If the minimum wage is set too high, that hoped-for outcome won’t happen.
Let's assume that it is true that this demand side economic model will work (I don't believe it will, but lets assume it will). Why does it take the form of a minimum wage and not a social program by the government?

If it is a societal good, it should be provided by the taxpayers, not solely by business owners whether they be large or small, rich or poor, or on the verge of bankruptcy themselves.

I'm with kayaker. The small businesses that we want to promote get screwed over and over again by government red tape and increasing rules and taxes.
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Old 08-08-2019, 12:57 PM
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If it is a societal good, it should be provided by the taxpayers, not solely by business owners whether they be large or small, rich or poor, or on the verge of bankruptcy themselves.
And provided primarily to people who otherwise wouldn't and shouldn't qualify for assistance, while if ignoring many who do or should

Last edited by Ruken; 08-08-2019 at 12:57 PM.
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Old 08-08-2019, 01:25 PM
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And provided primarily to people who otherwise wouldn't and shouldn't qualify for assistance, while if ignoring many who do or should
Exactly. Like the teenage kid working for beer money or the surgeon's wife who wants to get out of the house for 20 hours per week. They don't need this subsidy.
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Old 08-08-2019, 01:35 PM
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And to piggyback on an earlier post in reply to the poster who stated that some jobs just shouldn't exist. We already have a social safety net. Let's say that it costs the taxpayers the equivalent of $10/hr to provide for someone who cannot make their own living.

Let's also say that this person is of limited skills and can only fetch $6/hr in a free market. If the government mandates that I pay him $10/hr and he is not worth that, I won't hire him, and then the taxpayers are on the hook for $10/hr.

Wouldn't it be better if he could work for $6/hr so that the taxpayers are only on the hook for the remaining $4/hr? We would have then taken a step to eliminate his poverty, giving him work that he can take pride in along with the ethic that entails, he provides me a valuable service, and we have saved the taxpayers money. What is wrong with my thought process on this?
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