I don’t know how elastic McDonald’s prices are, but if you raise them, you are not going to maintain the exact same level of customers.
I have to assume in a bizarre conspiracy to maximize revenue, McDonald’s is already charging what they believe is the maximum price they should charge.
Hey! Quit stealing my straw!
Many of the jobs under consideration here are not out-sourcable. A burger flipper has to worry about lots of stuff, but not that. The well paid manufacturing worker - who already is no doubt contributing value to the company - does, since if manufacturing is outsourced the new worker will contribute almost as much at a lower rate. So I doubt this will accelerate out-sourcing a lot.
I dispute that there are that many people with so few skills that they can’t add enough value to a company to justify a living wage (a lot lower than $20K.) In the first example the company can (and does) save more by cutting hours to below the minimum for benefits. That’s an efficient way of not paying for benefits for those who don’t need them.
There are a class of people who probably can’t contribute enough to merit a living wage - some mentally handicapped people, for instance. I’d be in favor of government subsidies for them.
There are three choices here, to handle the problem you bring up. The first is to have a low floor for everyone because some might not need higher wages. The second is to have a higher floor , though some might be able to work for less while still keeping a decent standard of living. The third choice would be a two tier system. The problem with this is how to distinguish between those wives who need a living wage and those who don’t? (Or husbands.)
If a company is putting people in these second class jobs, why train them? Why ever give them a raise - they don’t need one, after all? If they learn enough to be worth more, why not fire them? And what happens if this woman’s husband dies or leaves her? Is she suddenly worth more, or should she go on welfare?
What percentage of the “unskilled” fall into this category, and is it worth pulling down everyone else because of them?
Read *Working Poor * (I ref’d it up thread). There are so many contributing factors, many of them being learned bad habits, inability of unnurtured parents to nurture their own kids, distrust of authority, low self-esteem, sexual abuse, malnutrition, nonexistent dental care, the list goes on and on.
You’re not getting it. When faced with the multitude of problems that these people are faced with, and not having good role models to learn from, dropping out of school begins to look like the right thing to do. It’s difficult to stay in school when the rest of your world is in shambles all the time. Everything is a stop-gap measure. They can’t see the big picture because their main concern is putting food on the table…or dealing with an abcessed tooth…or figuring out where to sleep.
How ever do you define what the services of someone is “worth”? If by worth you mean how much someone can negotiate based on their power, I’d argue that this has little to do with worth? Is the CEO of a money-losing company really worth what he makes? Is the burger flipper who produces $500 worth of burgers an hour with little waste worth $6 and not $8? Any worker who doesn’t produce a lot more than he gets paid is not going to be working long. That I don’t object to. But let’s not pretend that a worker’s salary is just inches away from charity.
Why do you doubt it? You yourself have already said that increasing wages drives automation, and burger flipping can be automated. Also, as I pointed out, the additional jobs created for making the automation equipment may very well not be in the US.
Define “justify”. If those jobs “justified” a Living Wage, why don’t they command that wage now? Tell us what your living wage level is, and we can look up how many jobs are paying below that right now.
Once again, define “merit”. You seem to define it as what you think they should get. But if I think they “merit” a $50k/year salary, how is that any different?
[quote]
There are three choices here, to handle the problem you bring up. The first is to have a low floor for everyone because some might not need higher wages. The second is to have a higher floor , though some might be able to work for less while still keeping a decent standard of living. The third choice would be a two tier system. The problem with this is how to distinguish between those wives who need a living wage and those who don’t? (Or husbands.) [/quoet]
Choice #4: Don’t have any kind of wage controls and target public asstance to those people who truly need it. There is simply no reason to distort the market if there is an alternative that accomplishes the same thing.
She goes on welfare-- under my system or yours. Inflated wages beyond what the market requires is just another form of welfare. The main difference is that under your system, anyone can get welfare whether they actually need it or not.
No one is being pulled down-- you want to artificially pull everyone up, regardless of whether their work is worth it. And here I’m using “worth” in the only manner that makes sense-- what the market deems something is worth. No more, no less.
This where the differences in philosophy kick in. You express liberal sympathy and guilt for what you just described. I say “who cares?” and I mean it for a variety of reasons that are neither simplistic nor completely selfish. I have gotten dealt some cards that would be near the top of hindering factors that you described. I have been both a raging success and a pitiful failure at different times and I expect the future to hold much of the same.
Assuming that someone does care, simply handing out money quickly summons the beast that is the law of unintended consequences. The obvious one with wage based solutions is that the jobs that are affected will simply go poof and either be sent offshore or workers will simply be worked harder to compensate. You can force employers to pay more for a given job but you can’t force them to increase their overall payroll. Another issue is enabling. This affects society as a whole and means that it may not be wise to encourage people to drop out of school or just drift along because any job they get will be sufficient in the long and short-term. Finally, living wage laws would affect much more than just the jobs now below it. Many pay structures are organized in a hierarchy and it won’t work to have a supervisor making about the same as his employees if his existing wage is close to the new living wage. Promotions are supposed to be a reward and compensate for the existing responsibilities. Many people with lower wages will need a pay increase and now we just set us even more of the vicious inflation cycle.
That’s also a world-wide number. $.12 might not seem like much in th US, but it it’s a lot in China or India or even in some Eastern European countries.
Still, if McD thought they could, across the board, raise prices even that much why wouldn’t they do it now and just pocket the profit? Of course, some people on this board think they know how a company should set prices better than that company itself, which is nothing short of laughable.
Interesting. In the book, the author said one of the reasons low-wage workers didn’t show up for work sometimes was because they figured no one would notice; no one would care. The fact is we need to care because the low-end jobs are what makes the high-end jobs possible. The lineworker makes the widget that the inspector inspects that the packer packs that the salesman sells. It’s all important and it’s all connected.
I think the minimum wage should be raised slightly; I’m not talking about a buck per hour because I do believe that would throw off the economy (and I’m sure no one will ever accuse me of being an economist of any stripe) but a more effective solution would be to raise the poverty line or provide the necessary funding to support the working poor until they can make their way up to an *adequate * standard of living. You can’t work if you don’t have someone to watch your kids. You can’t work if you’re chronically ill. You can’t work if you’re unable to get to the job. These are all basic needs that have to be filled if someone wants to climb up to lower-class living. And you can’t do it on $5.15 with no benefits and inaequately funded services. The cut-off line is too low.
This sounds like a disingenuious statistic. If I’m reading it correctly it’s saying of the people OVER 25, 2% are earning MW. this doesn’t mean of the people EARNING MW, 98% are under 25. At a guess, I would say roughly half the people earning MW are over 25. The only time people get paid federal MW is in states without a higher MW and I don’t imagine theres a significant correlation between the state MW and the ratio of adults employed so it’s reasonable to assume roughly half the MW population are adults.
And just because it’s 2% doesn’t mean it’s a major problem. Unemployment is only at 5% and it’s a huge issue.
I didn’t respond to this point before. I have no objection to a job being zapped by an automated burger flipper, and where that flipper is made is of no great importance. Yes, it is unfortunate that people get laid off due to automation and increased efficiencies, but this improves the productivity of the economy as a whole, and alternative is to keep buggy whip makers and railroad firemen. Cheaping out on pay to the level that it falls below a living wage doesn’t improve productivity - profitability maybe, but that’s not the same thing. In fact I’d argue that it hurts productivity, since someone hungry or worried about how to pay the next bill or about childcare tomorrow is not going to do as good a job as someone not worrying about those things. This isn’t true at all wage levels, but I think it is true at the one’s we’re discussing.
Justify means produce enough per hour (value added) to cover salary, overhead, and profits. That’s the ceiling. If an employer doesn’t care about tnings like turnover, what is the bottom? Thai workers may make fifty cents an hour. Sure, you can’t live on that here, but by your philosophy why is that the problem of the employer? Are you in favor of a race to the bottom?
Same thing - value added. The company my wife worked for when I was in grad school employed handicapped workers to do things like sweep the floor. Did they “earn” their pay? I doubt it, but this was a family owned company that did things the old way, and they decided to contribute to the community this way. In many jobs it isn’t very easy to say who “merits” what. Like I said, it’s power.
So, you think welfare should be equivalent to the minimum wage? That’s truly going to distort the market. My requirement for earning a living wage is to contribute by having a job. Someone on welfare should be able to survive, but at a level below that of comfort. I bet you agree with this one.
Lots of people go in and out of welfare, which to me indicates they never have enough money to establish a secure living situation even when working - they’re always right on the brink. With a living wage perhaps they will be able to save enough so that every little blip won’t force them back to welfare.
One thing more. An employer of today’s MW workers may consider them disposable, and cheap enough so they don’t have to be very good at what they do. If they paid more, perhaps the emplpyer would find it profitable to increase training so that the unskilled employee would soon become skilled - if only at flipping burgers. I think most people are capable of being trained. If an employee is a jackoff, with high absenteeism and a poor work ethic, then he can go on welfare and not be so comfortable. Living wages are for those who contribute
Well, society has already decided against that philosophy, so now we’re just negotiating the details.
I defined my version of worth above. As in the objective measure of economic value, not the subjective measure of utility. Some people are worth a hell of a lot to me, because they bring me immeasurable happiness. But I don’t pretend that that has any economic worth. They get paid not because they are great people, but because their services are “worth” x dollars an hour to their employer. This is supply and demand, not a popularity contest. So I define worth by supply and demand; if that is cold and heartless so be it, but I feel that it is the best method of generating and distributing wealth that we have.
The CEO of a money losing company is still helping her company rake in tons of money. Maybe the expenses are more than the receipts, but if there were no money coming in, there would be no company to be the CEO of. The burger flipper is not helping his company make nearly as much as the CEO, even if the company is losing money. If there was a cheaper or better CEO to be had, then that’s who would be running the company. And if there is a cheaper better way to flip burgers, then burger flipper is going to be out of a job. So there’s how I propose we define “worth”.
By the way nobody is saying a worker’s salary is charity. But that is in the context of our present system; worker’s get paid what their skills and scarcity command. It’s the goal of some in this thread to change that so that workers do get charity. That is, people can’t afford to live on what they make so let’s all pitch in and give them enough to support a family of four comfortably. That kind of forced charity is what I object to.
It is to them, to the other 95%…not so much. We don’t regard our fellow citizens as members of a community to which we bear obligation, they are units, and units are either functional or worthless. We offer bland pap about entrepreneurship and initiative, lectures on bootstraps to people who have no boots.
It would be nice if science could instruct. But no. Sociology and economics are soft and pliable, data is molten jello to be poured into a mold of preconceptions, a conservative and a liberal will take precisely the same set of data and draw two entirely contradictory conclusions. The progressive proposes reforms, the conservative undermines and hollows out those reforms, and when they don’t function, crows aloud about his wisdom and prescience. To paraphrase G.K. Chesteton, not tried and found wanting, found difficult and not tried.
We will have to take risks, and we will squandor money. Bet on it, we have no idea what will work, so far, we only try band aids on bayonet wounds, with predictable results. Its not so much that we lack the courage to fail, we lack the courage to fail and try again anyway.
We hold these truths to be self-evident: that no child in the richest nation in human history should go to school lacking a hot breakfast, decent clothes, and a school that will offer her a complete opportunity to advance her abilities, abilities that, ultimately, benefit us all. Anything less is a disgrace and a betrayal.
Correct, and that’s why I restated my earlier post where I misinterpreted it.
No need to guess at all. The BLS states that “About half of workers earning $5.15 or less were under age 25” which means that about half are over 25.
I’d agree with that.
It’s 4.5% (as of Nov '06), and whether or not that’s a “huge” problem is entirely subjective. I believe that most economists consider 3% unemployment about as low as you can get before you’re actually in a labor shoratge, so 1.5% above that is pretty damn good, especially when measured against recent numbers (warning: PDF)– 5.8% avg unemployment rate in the 90s and 5.2% avg in 2000 - 2005.
But if those jobs that render people “employed” don’t pay them enough to afford the basics, can you really count it? I know they count it, but what does that job get you except off the dole? You’re hungrier than you were, you can’t see a doctor when you’re sick. What meaning does a statistic like that have if no one’s life has improved? It only counts for business stats…not for the people.
We’re just going around in circles here, so I’m going to address just a few things from your last post and call it quits. I don’t think either of us adding any new information.
There is no practical way to stop innovations from destroying jobs like buggy whip making. That’s an entirely different thing than distorting the labor market with higher wages and focring jobs out due to the increased value of automation. It boggles the mind that you would advocate that government get into the job destroying market.
There is no such thing as “cheaping out on pay” in a normally functioning market. You are using emotionally laden words to slant the argument. Paying someone what the market deems appropriate has no value judgement associated with it. The only way you can cheapen someone out on pay is if you forcefully prevent them from seeing what other jobs are paying, and somehow trick them into working for less than they are worth.
All things being equal, productivity and profitablity are directly correlated. If I have two companies, one with 100 workers and one with 50 workers, if the workers in the 2nd company are twice as productive as the first, then the two companies will make an equal amount of profit even if the workers at Company #2 make 2x as much as those at company #1.
If, as you claim, workers become more productive simply by raising their wages, then the market will take care of your so-called “cheapened” wage rates. Another company can come in, give the same type of workers more pay (even if that completely offsets the profits from the extra productivity) and all (or many of) the workers from the first company will quit and join the new company, forcing the original company to either raise wages or go bankrupt. If you really believe this to be true, you can become a wealthy man by putting that theory into practice. And, you will have use the free market to fix a social ill.
Why would anyone take the job if it does not improve their lives?
Most states in the US are forcing people off welfare after X time on it. They are rarely tossed into the workforce with the skills or wages required to care for their kids, maintain health, or transport, feed, clothe, and house themselves adequately. They often work for $7 or $8/hour, but it’s not enough money to care for a family.
I didn’t know that. I suppose the stat would count in the sense that these people are now at least contributing some value to society, instead of being a complete drain.
Child care in Chicago: http://www.ssa.gov/chicago/windycity.htm - $161 to $220 per kid, per week. How can a minimum wage earner afford that?