This HuffPo story states that one particular big box store will cost the area/state’s taxpayers nearly a million dollars a year in public assistance for some of its 300 employees, according to a study put out by congressional Democrats. The question this brings up is: whence come these workers? Would they have otherwise been unemployed, and hence on public assistance anyway? Or do these retailers cause the destruction of better paying jobs or better providing employers (who might be less hasty about getting store revenues to the distant main office)?
Seems like instead of blaming business legally paying low wages that force employees onto public assistance, perhaps they should take a look at how much effort Congress has put into raising wages to a livable wage that does not necessitate providing public assistance to workers earning those wages.
My point is that Podunk just got a new BoxMart, which employs 300 people and draws additional revenue from nearby Bumfuck, Hickstown and upscale Slide Pointe. It is a boon to the local economy (so they say), but what were those 300 new-created employees doing before
BoxMart opened? Certainly, a few of them must have immigrated to Podunk, but not all 300. How does this large-scale job creation thing work? What were those people doing before?
Where do you suppose the money to pay a higher minimum wage would come from? I saw a proposal to raise the minimum wage to over $10/hour…call it a 25% increase. If such a thing were to become law, and businesses suddenly faced a 25% increase in labor costs, they’d probably have to raise prices to stay in business.
The net effect is unlikely to increase the real buying power of minimum wage workers. Raising the minimum wage is not a solution to the problems of poverty.
Marxists who think that hanging the bourgeois from an oak tree will solve all problems are ignorant. Fortunately, that species of “thinker” was as extinct in America as the unicorn even before Saint Ronnie single-handedly dismantled the Berlin Wall.
However, there is another species of thinker gaining strength in America just as ignorant and much more insidious.
Oh my. This was discussed in threads three months ago and concepts like demand elasticity and the fact that some costs are NOT proportional to the minimum wage were patiently explained to the Ignorati. After a pause hoping for forgetfulness the Ignorati wants us to repeat the same education. :smack: And BTW, when this is moved to BBQ Pit I will explain in strong terms that I prefer honest ignorance to inventing statistics out of whole cloth and deliberate prevarication.
For example, from an earlier thread on a similar topic:
I asked Mr. Terr for a cite, clicked on his links and found only mention of a hike to $10.35 and mention of a contract clause specifying "each rate will be at least ten cents ($0.10) higher than the previous rate in the progression schedule.” I tried to point out to Mr. Terr that ten cents was less than the wage hike and that $10.35 was less than $36, but he had nothin’.
Mostly out of the shareholders’ pockets, I expect. They can and will raise prices to compensate, but only to the point that people are willing to pay. Then they gotta figure out how to do business like, oh say, I dunno, maybe Costco?
Some were working somewhere else, some were unemployed, some are still working that first job in addition to the new job at BoxMart, since they only guarantee part-time work, some were fresh out of school, some were seasonal and will go back to school. Is it that hard to figure out?
Of course, (without supporting a 25% increase), I will point out that the proposed raise would never amount to a 25% increase in labor costs. Management and employees that had been around long enough to garner higher rates, already, would not be given 25% increases. (Some employees above minimum wage whose current rates were overtaken by such a raise would probably get some marginal increase to keep them above the bottom rung, but they would never get 25%.)
We have been doing “minimum wage” for over 60 years. While it is popular among those who oppose a minimum wage to claim that the inflationary pressure of a minimum wage results in higher prices negating those wage increases, I have never seen anyone actually demonstrate that an increase in the minimum wage had such a drastic inflationary pressure that anyone was actually harmed by receiving such an increase.
(I have seen minimum wage earners whose income was overtaken by inflation, but I have never seen genuine evidence that the minimum wage played any more than a tiny role in inflation.)
My perspective is that of a small business owner. I do not have any managers or other employees that are already making enough to not be directly effected by a 25% increase in the minimum wage. For small businesses such as mine, the effect of such a move would be to either prevent job creation or even to cause layoffs. I know I would not be able to hire additional staff at $10/hour. I suspect that other small business owners are in a similar position.
You might not be able to afford it, but your labor cost is not going up 25% unless everyone, including yourself, is paid minimum wage. Using made-up round numbers for convenience, lets say you pay yourself $40,000 a year, and you have four part-time minimum wage employees who each earn $10,000 per year. Your labor cost is $80,000. Minimum wage goes up 25% and they each earn $12,500 for a total of $50,000 for the four of them. Add in your $40,000 and total labor is $90,000, which is less than a 25% increase. If you pay yourself more or have a couple of managers earning more, the percentage increase will be lower.
Smoke and mirrors. I’m the owner, with no set salary. My labor is not a business expense as I am currently organized. Anything left after expenses is mine. Sometimes, there is nothing left after expenses. Sometimes, there is not even enough income to pay expenses, and I have to make up the difference. All staff wages come out of my pocket. If I have to pay staff 25% more, then my labor costs increase by 25%.
Wal-Mart is a huge company with thousands of employees. I’m a sole practitioner in a small town. I’m the lawyer-owner/customer service department/legal department/IT Guy/Billing Department/Purchasing Agent/Janitor/Every-Other-Damn-Thing-except secretary/receptionist. I have ONE employee. And if minimum wage jumps by 25%, I don’t think I can keep her.
I think he means he pays absolute minimum wage without any benefits at all (no paid time off, no health care, nada) – otherwise a 25% increase in min wage would not result in a 25% increase in labor cost. If I paid the guys who clean my stalls at that rate, they’d leave in a heart beat.
Demand for one of my products would increase if min wage increased… so I’m all for an increase. Heck, if it were a 25% increase in minimum wage, that might drive my demand high enough to double my staff
At least she’ll get better pay at her next job. My attorney pays his assistant over $10/hr and she handles the computers, billing, etc, etc. in addition to the entire front office. That way, he can earn more money doing attorney stuff.
Good for him. I spent most of my career in a federally funded non-profit representing poor people that can’t afford to pay for lawyers, earning about half what many of my classmates make, until I lost that job due to budget cuts. I’ve been in private practice about 9 months now, making less than I made at the non-profit, with no income security. It takes time and money to build a practice. Maybe in a couple of years, I’ll be able to pay more.
It’s a fair deal for both of us. She’s got a job she probably would not have gotten at a larger firm, as she had no experience. She’s also got a certain amount of flexibility. If she needs to take a day off or leave early to deal with her family, I’m generally able to accommodate her. I’ve got an employee that can be trained to do the things I need done. She earns what I can afford to pay. About the time I get her fully trained, she will likely move on to bigger and better things, and I’ll have to start over with a new secretary/receptionist.
