House Dems propose raising minimum wage from $7.25/hr to $10

[John_Mace]

@ladyfoxfyre

The idea that employers are paying people “what they’re worth” at that level of work is laughable, they’re paying people what they can get away with based on the current unemployment levels.

How are those two things different? When there is an oversupply of apples at the grocery store, and they discount them in response, do you get upset that you aren’t paying the higher price? Are you buying apples for less than they are “worth”?

[kayaker]

@Marley23

All of the above is insulting and/or inappropriate for Great Debates because of its personal nature. This needs to stop now or this thread may be closed and warnings handed out.

OK, I’ll bow out if I can’t respond to shit like:

@Evil_Captor

I believe that business owners are greedy bastards.

Kayaker, business owner.

[Marley23]

@kayaker

Kayaker, business owner.

You can respond. You can’t respond with insults. I fully understand why you don’t appreciate Evil Captor’s comments, but generally speaking, negative comments about groups of people that include some Dopers are allowed (otherwise it would be difficult to discuss, for example, party politics) and personal insults are not.

[kayaker]

@Marley23

You can respond. You can’t respond with insults. I fully understand why you don’t appreciate Evil Captor’s comments, but generally speaking, negative comments about groups of people that include some Dopers are allowed (otherwise it would be difficult to discuss, for example, party politics) and personal insults are not.

So… Questioning someone’s honesty is not an insult? Not to belabor this, just wanna be sure I understand.

@Evil_Captor

We have a person who claims to be a business owner who claims he would have to lay off two employees if the wage was $10 an hour.

When it comes to employee wages, the LAST people to believe is business owners. They have EVERY incentive to keep employee wages down. Money in their pocket, y’unnerstand?

[ladyfoxfyre]

@John_Mace

How are those two things different? When there is an oversupply of apples at the grocery store, and they discount them in response, do you get upset that you aren’t paying the higher price? Are you buying apples for less than they are “worth”?

Because I think there is a difference between an employee being paid what they are worth to an organization and what they are worth relative to the unemployment rate. Six years ago, people were being brought into the positions I described earlier at $9 an hour. During the course of six years, did the value of that position decrease suddenly to $7.25? Did the amount of work decrease that the individual in question was responsible for, or the amount of information they were expected to know relative to their job duties? No, in fact it increased.
When people say that individuals are being paid “what they are worth”, I think this is misleading. They’re being paid the minimum of what it costs to keep them in the position without having to replace them, which is what they’re worth compared to the unemployment rate. But as other posters have mentioned earlier, employees are experiencing a ramping up in productivity expectations. So you have one person doing the job of two, getting paid the minimum amount of work needed to keep you from having to replace them from a large pool of unemployed people.

Compare that to the actual value of the employee as far as value to the company goes, organizations are currently sitting on some of the highest cash reserves ever, so it’s clear that those businesses are not suffering for cash. What I am arguing is that the worth of an employee is more than their value relative to a high unemployment rate. If a company is still thriving in a recessed economy, the fact that other people are not employed and other companies are not doing well does not justify a sharp downturn in wages when that is not justified by the actual performance of that business. My experience sitting in these corporate meetings demonstrates that, where the pay bands are plummeting because “we need to take advantage of the unemployment levels” = to justify paying people less than what we have paid them to do the same job in the recent past, while continuing to experience growing profits.

[Blalron]

@jtgain

If raising the minimum wage is so great, why not make it $100 an hour and we would all be rich?

Even the most hard core liberals agree that is absurd, so they would admit that there is a sweet spot in between $7.25 and $100/hr that is good. Why is it $10?

Because there’s an actual historical example of a $10 an hour minimum wage working for us without disasterous results (the inflation adjusted equivalent) back in 1968. By the way, the unemployment rate back then was 3.6%.

[Damuri_Ajashi]

@DirkGntly

An earlier poster made the point that raising the minimum wage to $100/hr would be considered ridiculous. The real question is, why is it ridiculous? The answer is because if wages were that high, the goods and services being produced by businesses would no longer be affordable. The same is true of any increase in minimum wage - it is a vicious cycle. The minimum wage increase forces businesses, if they don’t lay off workers, to increase the cost of their goods and services. This in turn makes it more difficult for those on minimum wage to afford those goods and services, so a call is made to increase minimum wage again…it’s a never-ending cycle.

I think you are entirely ignoring the fact taht those people will now be making $100/hour.

If everyone is making more, then everyone can afford those higher prices that are being caused by their own wages.

@rogerbox

If the increased wages were perfectly balanced out by increased prices on goods, then why do conservative big business proponents care so much if it’s all the same?

The problem is that its not perfectly offset and what offset there is take place over a period of time.

@XT

How about, instead, we don’t have any minimum wage at all, and instead let the market determine wages while tweaking the tax code in various ways to address the real problem folks are trying (badly) to fix by having a minimum wage? How about that?

-XT

As if the tax code isn’t complicated enough, what further tweaks do you think you obviate the need for a minimum wage?

@John_Mace

Why, exactly, do you think worker productivity has increased so much over the last few decades?

Automation is a lot of it, a more educated and better trained workfroce is a lot of it too.

@The_Tao_s_Revenge

Of course people give up all aspirations upon making a living wage, its why no ever makes more than lower middle class. Being satisfied with having enough is a common vice of human nature.

Well, these folks also think that raising their taxes by 3% will make people quit their jobs and stay at home.

@XT

No, my POINT was that Americans want that better life simply because we are Americans…as if by that magical accident of fate we should have it and deserve it. Why should our labor be worth more than the labor of other countries? Answer…because we are Americans, and we should have a high standard of living, and damn it that’s how God or the gods or the dice intended it! Except it doesn’t work that way. Labor is just another resource,…

Except that labor is very very different than every other resource in the world. Putting aside thef act that labor actually means living breathing human beings, no other common resource has so many restrictions on movement between borders.

and if you are going to pay a premium for labor then there has to be some value add. What’s OUR value add, TTR? Why do YOU think our labor should be paid a premium? Certainly, the fact we speak English and are strategically located where the vast majority of the consumers are factors in. But to the point where you want a guy working at 7-11 to be paid as much or more than an engineer with degrees working as a profession in India or China?? Is our kid really worth that much more than those grown men in other countries?

The cost of living is also different there. Why is a 7 bedroom house on a 3acre lot worth more here than there? Is a 1 bedroom condo in Manhattan really worth that much more than a villa in India or China?

And this leaves aside the other aspect of my point, which is that if labor costs more than it’s worth to the buyer (i.e. those evil corporations), then they are going to look for alternatives, whether that be automation or other resource pools (such as those guys in India or China or whatever who are willing, even eager to work for a fraction of what we are mandating labor should cost by fiat legislation).

There is very little we can do with teh minimum wage that would drive even more business to China or bring jobs back from there. The incentive for automation in the US is always there. They are automating plants in China where wage levels are a lot lower.

No…they don’t. If their customers can’t afford their products then companies either have to shift to sell to other markets (such as, ironically, the emerging economies in other countries who ARE using their labor at the market rates) or they will go out of business. Businesses don’t need to subsidize their customers to ensure they can buy their products…that’s ludicrous. Sorry that you can’t see that and you think your sarcasm has some point.

You ever hear of Henry Ford?

Why DO you think that some 16 year old kid not even out of high school and working at the local 7-11 deserves wages many times what the average worker in India or China gets?

Because the cost of a meal here is many times the cost of ameal in China or india.

@ladyfoxfyre

Let’s dispel this myth right here and now. I can guarantee from personal experience that every single CVS Pharmacy right now in the state of Florida is hiring pharmacy support staff (everyone but the pharmacist) at minimum wage. And they are loathe to permit any wage increase for the first year of work, and after that you’re lucky to be bumped up to $8.25. These are not 16 year olds working for beer money, these are people who require state licenses to work in their job capacity. In many cases they have completed training programs through for-profit schools in order to be competitive for the position, and are now finding out they can’t make enough to support themselves let alone pay back their loans. This is employers taking advantage of an oversaturated employer’s job market, where your relative level of skill is almost irrelevant, because if you won’t take $7.25 an hour, somebody else probably will, and we’ll hire that person instead. The idea that employers are paying people “what they’re worth” at that level of work is laughable, they’re paying people what they can get away with based on the current unemployment levels.

But, but, but, minimum wage folks are all people who are just looking for some bubblegum and comic book money.

The division of income between capital and labor has been pretty one sided since unions started declining decades ago.

[Marley23]

@kayaker

So… Questioning someone’s honesty is not an insult? Not to belabor this, just wanna be sure I understand.

He’s not required to accept your descriptions at face value and he didn’t directly call you a liar. That said, Evil Captor, you’re treading a very fine line here and you’re better off debating the claims then arguing whether or not kayaker is telling the truth.

[Joey_P]

I haven’t read the whole thread yet (which I will when I have a few minutes) but just to toss some real numbers in here. I just went though this weeks payroll for my business. Bringing all my employees who are currently under $10 up to $10 an hour would have added about $290. Without taking taxes into consideration, I would need to bring in an extra (about) $880 each week to recover that working on the average grocery store profit margin (about 33%).

With a small business and only about 10-12 employees, suddenly needing to bring in an extra $125 a day just to maintain status quo is a big deal. This also (as I said above) doesn’t cover taxes, it doesn’t cover higher workers comp and it doesn’t cover the raises that we give to our employees that have been with us for a few years that suddenly turn into minimum wage workers.

Raising it a smaller amount over the next few years would make more sense. Otherwise small business that can’t absorb it or spread the price increases out over a larger product base and make them less noticible end up haveing to get rid of an employee. In order for a me to make up that $290 I could either bring in an extra $880 a week (which may mean longer or harder hours and more wages) or I could axe an employee and spread everyone a bit thinner (or not axe an employee but just reduce everyone’s hours to save money).

[Acid_Lamp]

@kayaker

So… Questioning someone’s honesty is not an insult? Not to belabor this, just wanna be sure I understand.

Well why not explain it to us a little better then. You’ve been exceedingly vague about your business model, and why it would cause you to fail. That sounds to me like your profit margin is so small it’s not even funny. Additionally, if you are able to provide more value to your customer than your support staff, to the point where you could lay off two of them and cover their work, there is a massive inefficiency going on there. 2.00 an hr x 40 hrs x 2 employees is 160.00 a week. That’s 640.00 a month. A little less then 7k a year. If that would *break *you, you’ve already failed; you just don’t know it yet. Assume though that you can do double the work, (doubtful if it’s labor since certain things simply take a certain amount of time regardless of skill level) so you only make up 40 hrs a month (10 a week) instead of the 80 across two people. You pay yourself 16.00 an hr? That’s pretty damn low if you provide so much more service.

[Acid_Lamp]

@Joey_P

it doesn’t cover the raises that we give to our employees that have been with us for a few years that suddenly turn into minimum wage workers.

snipped for brevity

Why do they deserve raises?

[John_Mace]

@ladyfoxfyre

Because I think there is a difference between an employee being paid what they are worth to an organization and what they are worth relative to the unemployment rate. Six years ago, people were being brought into the positions I described earlier at $9 an hour. During the course of six years, did the value of that position decrease suddenly to $7.25?

If someone with the appropriate skill level is willing to work for that rate, then yes it did.

Did the amount of work decrease that the individual in question was responsible for, or the amount of information they were expected to know relative to their job duties? No, in fact it increased.

So what?

When people say that individuals are being paid “what they are worth”, I think this is misleading. They’re being paid the minimum of what it costs to keep them in the position without having to replace them, which is what they’re worth compared to the unemployment rate. But as other posters have mentioned earlier, employees are experiencing a ramping up in productivity expectations. So you have one person doing the job of two, getting paid the minimum amount of work needed to keep you from having to replace them from a large pool of unemployed people.

Compare that to the actual value of the employee as far as value to the company goes, organizations are currently sitting on some of the highest cash reserves ever, so it’s clear that those businesses are not suffering for cash. What I am arguing is that the worth of an employee is more than their value relative to a high unemployment rate. If a company is still thriving in a recessed economy, the fact that other people are not employed and other companies are not doing well does not justify a sharp downturn in wages when that is not justified by the actual performance of that business. My experience sitting in these corporate meetings demonstrates that, where the pay bands are plummeting because “we need to take advantage of the unemployment levels” = to justify paying people less than what we have paid them to do the same job in the recent past, while continuing to experience growing profits.

I’m not sure why you think wages should be immune from the laws of supply and demand. There is no objective way to determine how much a person “should” be paid any more than there is an objective way to determine what the price of milk “should” be. And by “objective”, I mean apart from what the market tells us something is worth.

[Joey_P]

@Acid_Lamp

snipped for brevity

Why do they deserve raises?

I know where you’re going with that and it’s not a whole big thing I really feel like getting into.

It’s a fairness thing. Why should someone that’s been working here for X years suddenly be getting paid the same as someone that’s been working here for 1 day. Not only that, but if they’ve been working for X years and suddenly they’re a minimum wage employee, they’ve got nothing keeping them here. They could just up and leave and they’ve got nothing to lose since they’ll get paid them same thing anywhere they go. Also, I think it’s a bit insulting to be paying them minimum wage after a few years.

But I get the feeling you wanted to be able to say “Well then why didn’t they get a raise before” or “if they didn’t deserve to get paid more then $10 before then they don’t deserve it now” but I don’t feel like getting in to that since that’s not really what it’s about and that’s why I didn’t figure it into my calculations.

[kayaker]

@Acid_Lamp

Well why not explain it to us a little better then. You’ve been exceedingly vague about your business model, and why it would cause you to fail. That sounds to me like your profit margin is so small it’s not even funny. Additionally, if you are able to provide more value to your customer than your support staff, to the point where you could lay off two of them and cover their work, there is a massive inefficiency going on there. 2.00 an hr x 40 hrs x 2 employees is 160.00 a week. That’s 640.00 a month. A little less then 7k a year. If that would *break *you, you’ve already failed; you just don’t know it yet. Assume though that you can do double the work, (doubtful if it’s labor since certain things simply take a certain amount of time regardless of skill level) so you only make up 40 hrs a month (10 a week) instead of the 80 across two people. You pay yourself 16.00 an hr? That’s pretty damn low if you provide so much more service.

Bolding done by me. I’ve been vague in an effort to not identify what I do for a living, or where I do it. What I do requires a college degree and specific licensing that my support staff do not have. In addition, I choose to work as few hours each week as possible. I’m lazy.

Added to all of this is the fact that the area I live/work in is economically depressed. The recovery may be occurring some places, but it isn’t here. Some of my customers are non-profits that are on the edge of shutting down.

Theoretically, I could cut staff significantly, work 50 hours a week, and make decent money. I’d rather work 15 hours a week, pay a largeish support staff (who are happy to be making minimum wage, given the unemployment picture locally) and get by, barely.

Apologies for remaining vague.

[Evil_Captor]

@ladyfoxfyre

Let’s dispel this myth right here and now. I can guarantee from personal experience that every single CVS Pharmacy right now in the state of Florida is hiring pharmacy support staff (everyone but the pharmacist) at minimum wage. And they are loathe to permit any wage increase for the first year of work, and after that you’re lucky to be bumped up to $8.25. These are not 16 year olds working for beer money, these are people who require state licenses to work in their job capacity. In many cases they have completed training programs through for-profit schools in order to be competitive for the position, and are now finding out they can’t make enough to support themselves let alone pay back their loans. This is employers taking advantage of an oversaturated employer’s job market, where your relative level of skill is almost irrelevant, because if you won’t take $7.25 an hour, somebody else probably will, and we’ll hire that person instead. The idea that employers are paying people “what they’re worth” at that level of work is laughable, they’re paying people what they can get away with based on the current unemployment levels.

Oh, let me answer this for the conservatives on this board, I’ve heard their responses so many times:

Whatever employers can get away with paying IS the correct wage, it’s the marketplace in action. Not enough to live on? Tough shit, learn some new skills that employers will pay more for. Unable to learn new skills, or worse yet unwilling or uninterested? Die in a fire, you are a useless piece of crap and any suffering you endure is fully deserved.

There, that about covers it.

[Evil_Captor]

@Darth_Panda

Would you agree to work for less money if the company promised to pass all of the savings on to the consumers?

That depends on how much I’m making, doesn’t it? And the extent to which I am disposed to believe corporate promises, which is … very little indeed.

[Evil_Captor]

@XT

Then you should probably take that silver spoon out of your yap and those rose tinted glasses off your face. I’m fairly sure I’m a lot older than you are, and I remember when I had to work several jobs in order to make ends meet…or live without such amenities as TV, electrical appliances or a car. I don’t know what middle class lifestyle you came from, but the reality is that not everyone who worked in the past got a ‘living wage’ sufficient to allow ‘a roof over your head’ from working at a convenience store, or a gas station, or as a grocery bag boy (all jobs I worked when I was younger).

And I’m unsure why such jobs SHOULD pay a wage sufficient to put a roof over your head by themselves. Why should they? Because you think they should? Even if the labor is not worth the sum being extorted by fiat? My comment about such attitudes are that you aren’t doing folks any favors by subsidizing the lowest end of labor to the point where they can put a roof over their head by working at the local 7-11 because it disincentives them to ever do more with their life. Why train your skills up or try and expand your career if someone is going to pay you such a wage for basically having no skills at all? Of course, I can already see you shaking your head in negation (and heads exploding from other reading this), so how about this…automation is already happening all around us. By increasing the wage for zero skill low end labor you are simply pushing companies to ramp up their automation development. This has already been happening of course (because of well meaning efforts such as the creation of the minimum wage laws in the first place), and will continue to happen at accelerated rates as folks such as you push minimum wages higher and higher. I mean, why pay for zero skill low end labor to take your order at McDonald’s if it’s cheaper to use a remote order processing center…or to automate locally…or to provide better tools to a smaller staff to allow them to handle the work that was done before by a larger, lower paid staff? THAT is what’s going to happen…it’s what’s already happening, and it’s laws like this (and cheap overseas labor from folks who can do the same job as pampered and spoiled Americans for a fraction of the cost…and consider themselves blessed for GETTING those jobs at that wage) that are helping to drive it.

Personally, I’m all for it. Set the minimum wage to $10/hour. Fine by me. I LIKE automation, since I work in IT. It puts food on my table. Currently, my department is busy with several projects to automate everything from voting and elections to processing the public’s various requests for services. And most of it is because labor costs too much and the public wants their taxes lowered. The same sorts of pressures are happening in the commercial world as well, and pushing up the minimum wage is just going to accelerate it. I don’t think that with this jump (which is pretty modest) we’re going to see a labor implosion…but I do think that it’s going to have more companies looking at investing the capital into more automation (and probably looking to outsource whatever they can to cheaper labor markets overseas).

The irony, to me, is that Americans are constantly whining about the shortage of jobs, even while we do dippy shit like this that prices our labor out of the market either because we make automation even more attractive or because of cheap foreign labor. What I think will eventually happen is the price of labor is going to implode in the US (a ‘market adjustment’) because we will have this huge pool of labor that is untapped because we’ve legislated ourselves right out of the labor market because it’s simply too expensive to use most American labor and, sadly, we’ve encouraged our youth towards the low end of the skill set (or the no skills required) through making jobs whose labor is worth far less cost an inflated amount. It’s also not worth the price…we don’t have enough of a ‘value add’ to warrant the higher price for our labor. Eventually that has to correct as folks just want to work and figure out that there WOULD be jobs and companies WOULD use their labor if the prices were more competitive (and when our tax revenue implodes to the point where we can’t support everyone out of work in some hybrid European unemployment system, American screwed up style).

In the mean time, sure…bump it up. Hell, I think yo u guys should actually be shooting for $15/hour (seriously), as that’s going to actually meet your presumed goal of putting a roof over the heads of anyone with a job. It will also have to shift everyone else up as well (just like making it $10/hour will have to shift folks currently in the system…there is an HR term for this effect but it escapes me atm, and I don’t feel like looking it up on my iPad right now).

-XT

But … sob … my children have no polo ponies!

Seriously, these just so stories about how you pulled yourself up by your bootstraps so everyone else can go to hell cut absolutely no ice with me. The bulk of people are average, not driven to succeed by all the fires of hell. That’s the problem we are addressing. Outliers do not make for a good basis for planning, typically.

[Evil_Captor]

@kayaker

Nope. My insurance wouldn’t cover him being on my property without being on payroll.(I’ve turned down people who wanted to “intern” for free)

Plus, I’m thinking that I would not care to have him around based on:

Oh, you’d like me as an employee. I am a very affable person in real life, and have worked most of my life. The only reason you don’t think you’d like me is that you don’t think all your employees share my opinions. Most of them do, but they are far too smart to tell you.

[XT]

[QUOTE=Damuri Ajashi]
As if the tax code isn’t complicated enough, what further tweaks do you think you obviate the need for a minimum wage?
[/QUOTE]

Seems easy enough to me. shrug

Except that labor is very very different than every other resource in the world. Putting aside thef act that labor actually means living breathing human beings, no other common resource has so many restrictions on movement between borders.

Except you are wrong. Labor is just like any other resource. Different factors effect the price in different locations…just like different factors affect the price in different locations for other resources. Food and oil, for example, vary in price depending on all sorts of variables, including where you are in the world. Gas and cell service fees if you want to look at value added products in comparison. Labor is exactly the same.

The cost of living is also different there. Why is a 7 bedroom house on a 3acre lot worth more here than there? Is a 1 bedroom condo in Manhattan really worth that much more than a villa in India or China?

And so you will have to pay your labor more in countries like the US than in countries like China. And if there is some sort of value add to your labor, you will have to pay those additional costs to get the labor pool you need or want. If the value add isn’t sufficient to warrant the increased price, however, then you’ll look to either automate or use cheaper labor somewhere else.

There is very little we can do with teh minimum wage that would drive even more business to China or bring jobs back from there. The incentive for automation in the US is always there. They are automating plants in China where wage levels are a lot lower.

Never said that minimum wage was the sole or even primary cause driving companies to move to use cheaper labor. It’s simply part of a trend…Americans are overpaid for the value of their labor, pretty much from top to bottom. What increases in minimum wages will do is spur companies to accelerate either development of more automated systems to replace more expensive low end labor or further use cheaper labor pools if possible, or make a smaller number of employees more efficient by providing them with better tools…or some combination of all of these. So, what you’ll end up with is less people making your higher minimum wage and more people out of work especially at the low end. At least that’s my take on it, though as I said this isn’t a huge shift so maybe it won’t have a large effect. I’d be willing to be that after taking MW to $10 you’ll not have an increase in employment at the low end.

You ever hear of Henry Ford?

I have. I even know what your cryptic little comment here is supposed to demonstrate. Thanks for asking. Let me ask you something…do you think that the situation in Ford’s time is similar to the one that we have today? That few US workers are able to afford something like a car? That, like the workers in Henry Ford’s day, the average worker spends over 70% of their pay on bare essentials (such as food and clothing)…or do you think it’s shifted (hint…Americans spend a far less percentage of their overall pay for essentials, and have far more disposable cash for non-essential luxury type goods). And do you think that any of this would make it sort of a silly (cryptic) assertion for comparison? Or do you think it’s a valid comparison that needs to be seriously looked at today? Just curious.

You ever heard of Elmer Fudd? Just curious…it’s a random question because I’m thinking about hunting wabbit right now…

Because the cost of a meal here is many times the cost of ameal in China or india.

That’s true, but it’s only relevant if the labor you are looking at using adds enough value to warrant the additional costs. Obviously, if you need someone local to man your 7-11 you will have to pay what the market will bear (or wolf, but not bobcat). Or, if the labor costs too much then you might think about that automation or efficiency stuff and not worry about what a meal costs.

-XT

[Evil_Economist]

@Joey_P

Raising it a smaller amount over the next few years would make more sense. Otherwise small business that can’t absorb it or spread the price increases out over a larger product base and make them less noticible end up haveing to get rid of an employee. In order for a me to make up that $290 I could either bring in an extra $880 a week (which may mean longer or harder hours and more wages) or I could axe an employee and spread everyone a bit thinner (or not axe an employee but just reduce everyone’s hours to save money).

The last time we had a minimum wage increase of this magnitude was in 2007 (the actual percentage increase was larger than the current proposed increase to $10), when the actual adjustment was implemented over two years.