The cost to taxpayers of having all these people living below the poverty line is pretty large. They get food stamps and other government hand outs. They use emergency rooms for common colds. And on and on. Nobody has factored in the savings the taxpayers could realize from the mitigation of these costs which might be brought about by a MW hike. If you have to spend an extra $100 a year for your McDonalds, but your taxes are lowered because of decreased dependence on government, you might break even or even come out ahead.
Another thing that has only been briefly mentioned is the effect of having more money available to the middle and lower classes to spend. This was illustrated to me recently when a guy I know who works at Wal-Mart told me that he got a raise. He told me that both before and after the raise almost all of his check went to Wal-Mart anyway, since he buys everything he needs there. So it really did not cost Wal-Mart anything to give him that raise. Obviously this is an extreme case but it does a nice job of demonstrating the point I’m trying to make.
I think both these issues should be included in any discussion about the MW increase as counters to the panicked predictions of $30 hamburgers.
And Shagnasty, you make me laugh. A poor family should just move to a different part of the country? What a joke. A lot of poor people are walking to work, and wouldn’t be able to make ends meet without relatives providing free daycare. Even if a poor person had a guarantee of a great job in another state, they would have to have enough saved to cover the moving expenses, transportation, first month’s rent, last month’s rent, security deposit, utility deposits, PLUS feed their family for the first month on no income while they wait for their first check. If someone offered you a great job, but taking it meant you wouldn’t have the money to feed your family for a month, you would have to turn down the job. That’s part of the trap that keeps people in crappy jobs.
ok, guys. Sorry for not providing a specific site. I mistakenly thought that mentioning the USCB study would be enough. I made the search before posting and got so many results with so similar data that I didn’t think it was too important to choose one. Here comes the Food Insecurity Report from the USDA (which I think is unbiased and close enough to the horse’s mouth)
beyond this quick quote, that page has links to several other studies and reports on the subject.
Before we go into the specifics of what it means to “starve”, no, there are not too many skelletal children with flies walking on their eyelids in Manhattan. Still, one in 25 families not having enough money for food at some time of the year is something I think should not be happening in “the most powerful nation on Earth”.
And for the record, I most certainly don’t think that raising the MW is the solution to that (as you must have guessed already from my other posts).
(and no need to jump with the "full of shit"s this early in the afternoon)
It doesn’t HAVE to happen that way. As I posted earlier, there is no guarantee that this is a runaway process that ends with Bill Gates on food stamps. It would certainly start (some prices will go up) but I don’t know if it will find an equilibrium that we can bear or if it will just bring the EOTWAWKI.
Can you show us an example of a state that increased the MW and, as a result, was able to lower taxes for everyone? CA has one of the highest MW rates in the country. It’s $6.75 now, going to $8.00 in 2 years, but in SF and LA (for example) it’s already $8.82 and $9.08, respectively. I don’t seee any tax cuts in our future…
And the thing is, very few people make even that high MW. My friend owns a construction company that employs about 150 people Almost all the workers are Mexican immigrants (many illegal) who cannot even speak English, and yet they start out at $10/hour. All they need to know how to do is use a hammer, or be able to carry wood from the truck to the construction site. That’s not meant to demean these guys-- they work hard and perform a valuable job. But it’s hard work, and no American workers (of whatever ancestry) will even apply for the jobs. I find it hard to have sympathy for someone complaining about making low wages at the mall or at Walmart. Pick up a hammer and saw and do some tough work if you want to make money w/o skill. Hell, the lady who cleans my house makes $15 - $20/hour, depending on the client. But she’s motivated enough to start her own business, and doesn’t rely on McDonalds or Walmart to bestow some nice paying job on her.
And I wish people would stop mixing up the MW with the LW in this thread. The OP was asking about a Living Wage, and he still has not defined exactly what it is. If it’s $10/hour, then that would surely cause a big disruption in the US economy. Raising the MW by 10 % or so, as is hapenning in CA, is going to cause much less disruption, and we may not even be able to measure its effect.
Some people aren’t bright enough, healthy enough or mobile enough to start a business such as cleaning houses (though I had a friend who did, and made a great living doing it). I don’t think MW is the answer either, but in this nation of rampant disposable wealth, surely we can figure out how to adequately provide for those who will never have the means to dig themselves out of poverty. We’re talking millions of people who will never, no matter how hard they try, work themselves out of poverty.
Surely we can, for those who are truly unable to provide for themselves. For example, we could improve our schools, but people are afraid to experiment too much, and so we’re stuck with the crappy system we have, for the most part. I say let the states experiment as much as possible to find out what works, and don’t force some one-size-fits-all federal Living Wage (or other federal mandate) on the entire nation. The key is to find governmen solutions that help those in need without creating a system that reinforces dependancy. Let the market do what it does best-- create jobs, businesses and wealth, and use the government to mitigate those unfortante situations that are going to appear on the margins of any society.
But the reality is that the “unfortunate circumstances” aren’t few and far between. The numbers increase all the time as the rich get richer. Individuals who are incapable of ever competing in our society will never escape the hardscrabble existence. They’ll always have to choose between food and medicine, food and transportation, etc. I don’t believe there is a blanket solution, but we need to raise the minimum expectation of ourselves. It is inexcusable for America to even have this problem.
I never said “few and far between”. But where are you getting this idea that there are “millions” of Americans who are doomed to eternal poverty? And if, as you say, the Living Wage isn’t the way to go, what do you propose? How about giving tax credits (not tax deductions) to people who donate to private charities dedicated to helping those who are truly unfortunate? We could, if necessary, have a government certifaction process for charities that qualify for this benefit.
I never said you DID say it. I’m simply making a point. People who are doomed to eternal poverty: People who aren’t terribly bright, people who aren’t terribly healthy, people who aren’t terribly attractive (this plays a bigger part in a person’s ability to move up in a job than most of us would like to admit). People with no support net, people with special needs kids or parents, people who live in depressed areas (or states of mind, for that matter). There are plenty of people who will not have the benefit of luck or talent to pull themselves out of poverty.
A living wage law clearly requires an increase in the MW - though increases in the MW don’t mean we’ll reach a living wage.
$40K a year is $20 an hour. I’m sure you have a cite that the minimum standards the OP discusses or what living wage proponents advocate require a $40K salary. The stuff I’ve seen tries to get full time workers over the poverty line, and that requires less than half that salary. I didn’t get any sense if living wage advocates sum up the wages of a couple, or are looking for a single earner. If you assume both the mother and father work, you’d have to add the requirement for childcare, so I’m not sure they’d necessarily come out ahead.
Certainly…be we ain’t talking about your ridiculous one buck an hour raise are we? And THAT was where I was extrapolating my figures based on…not based on your own stupid one buck an hour. One buck an hour ain’t going to get you good housing, good food, reliable transport, healthcare, savings AND higher education for your children…with a pony thrown in for good measure. Is it?
Certainly…from the OP (if you had bothered reading it).
So…we are extrapolating a salary sufficient for a two earner family to have food, shelter, reliable transport, basic health care plan, save for retirement AND put their children through higher education. What do YOU think all that would take salary wise? Just the health care plan alone is going to add, what? 10k a year to the over all cost? Oh…you didn’t consider that part of the salary? I’d say that the target for all the goodies that the OP is asking for for his/her ‘living wage’ would be somewhere between $30-40k per year. If you wish to dispute that, then let hear how someone making less than $30k a year can get all that squeezed in.
Except you’re missing the part of it that disproves your point. Wal-Mart is paying your friend an extra $100 a week, and that $100 goes right back into the store - but Wal-Mart isn’t making $100 off of that. It’s not like their products magically appear in their stores because of magic elves. At best, the Wal-Mart store is making $40 off of that $100. Which means they’ve shorted themselves $60, which they’ll make up for by raising prices in general.
The problem isn’t a distribution of money, it’s a distribution of wealth. Forcing a “living wage” means forcing wealth from businesses and giving it to the lower class. And businesses don’t survive by losing wealth; either they’ll go under, or they’ll find a way to take wealth back. And they’ll do that either by taking it back from the lower classes, the middle classes, or the rich. And who do you think they’ll really end up taking it from?
Cite? There are other costs besides pure labor and raw materials. For instance there are one time design costs, there are shipping costs (from China, obviously,) there is depreciation on the factory and on the machines. I don’t know TV manufacturing but I do know silicon chip manufacturing, and labor is a neglible cost - manufacturing labor. The cost of labor for designers is a big chunk, and we’re hardly minimum wage. The cost of fabs is far greater than the cost of the people who work in them - and they’re not minumum wage either. Stuff that is labor intensive has already moved.
For a 7-11 or McDonalds, what is the average sales volume per hour? That will tell you the impact of a wage increase on prices.
Now, for auto manufacturing I agree, since the companies chose to shoulder health care and pension costs themselves, and not support them being spread over the entire population, and now they’re screwed. But that’s a different debate, and they are far above a living wage in any case already.
I don’t think anyone is talking about raising everyone to middle class status, unless your definition of middle class is a lot weaker than mine.
We’re not talking about a Lexus in every garage. I haven’t seen any demands for everyone to make the same amount of money. I certainly haven’t seen any living wage demands overseas - though I have seen calls for eliminating sweat shops. How to have a sustainable world economy without anyone living in abject poverty is an interesting problem. Are you saying that it’s okay for people in Burma, say, to live close to starvation because it makes for a world where we can use up whichever resources we wish?
[/quote]
No, they’d start working for a company who can make a profit and not mooch off the taxpayers. The demand will still be there,so the jobs will also.
That is an interesting question. Have you read the section in Freakonomics where they explain why most hoods selling drugs live with their mothers? Crime doesn’t pay nearly so well as we think.
Hey, I don’t get paid enough to meet my every want and desire - I have lots of desires. But that’s not what we’re talking about, of course. We’re talking about being paid enough to put you above the federally set poverty line.
In 1964 CBS discovered that there were people starving in America. We as a country have decided that this isn’t right. Companies do not pay only based on value added - they pay the least they can get away with, based on the market and the kind of workers they want. In the past few years productivity of workers has far outpaced wage increases, which isn’t understandable based on your model.
We have a minimum wage already and companies who can’t make a profit paying that wage go out of business. Don’t blame the workers, blame an inefficient company and a bad business model. If a company can’t make enough money to survive without this government subsidy - and it is, if indirect - perhaps they should be in some other line of business. CostCo can survive paying a decent wage, why not WalMart? Why should WalMart be allowed to tell its workers to apply for government assistance?
Cut pay - no one. But you’re making the mistake made by those who say cutting business taxes will increase employment automatically. Companies don’t pay overtime or hire workers for charitable purposes - they do it because it is necessary. What’s the optimal wait time at McDonalds - cutting costs while not driving away customers? I bet they know that already. if an increase in wages cause them to become more productive by, say, allowing self-entry of orders, the whole economy benefits. People lose their jobs due to higher efficiencies, and on the whole the economy benefits. Low wages sometimes mask inefficiencies.
This doesn’t address the real issue - the unfairness that some companies choose to push their labor costs partly on the government by sending their employees to get food stamps. Perhaps you’d be happier with a business tax that is based on the number of employees requiring government benefits? That seems inefficient to me, but unemployment more or less works that way.
Plenty of people eat at McDonalds who are not poor - beats me why. So a $1 an hour increase in the MW for those who are at it is not going to result in a $1 an hour increase in prices, and they come out ahead. There might be a small increase in prices for others, and maybe a hit to the stock prices for the wealthy, but maybe a decrase in government spending on food stamps. But maybe better paid workers will be more productive, not having to worry quite so much, and the whole economy will benefit. You’re assuming this is a zero-sum game.
An interesting idea. But education is a long term investment, and we have no way of knowing which businesses will be around in 12 years. Still, lots of businesses are screaming at the lack of educated workers, and only a few are trying to support the schools better to get them. So maybe our system is broken.
No, since either the companies will learn to live without a subsidy or they will die and one that can will replace it. The unfairness I object to is when some companies benefit from welfare and some don’t. A level playing field will help the truly best company to come out ahead.
All the companies I’ve worked for have internal education programs, and none ask for government money for them. Would it be right for a company needing a C++ programmer to ask the government to subsidize the training of an employee with a low interest loan, say? I don’t think so.
No, I blame the minimum wage law, that says a company and a worker cannot contract for a job unless the company pays the worker a certain salary. If a worker wants to accept a salary lower than the government mandates, he or she should be able to do so.
Again, there is no subsidy here. The business does not benefit. The workers receive the food stamps, Medicaid, and whatever else. It’s not as if the business would start paying this if government did not. It would simply see these workers replaced with workers who can afford to live on the salaries paid by the company.
One, CostCo is not competing againt Wal-Mart, so your comparison is not valid.
Two, Wal-Mart is only slightly worse in this area than other businesses. The percentage of Wal-Mart workers on government assistance compared to other retail stores is basically the same.
Three, the vast majority of Wal-Mart workers have health care.
