That would come under my exception- everyone is paid minimum wage because you aren’t being paid for your labor at all. And while I don’t mean to minimize the affect on you, you must realize that your office is not the typical small business, most of which have more than one employee and many of which pay the owner a salary.
This is the part many people miss when discussing this. Minimum wage increases don’t just increase the cost of doing business, they also increase demand (and therefore profits) because people have more income. A company may have to pay it’s employees more, but other companies will also have to.
Think about this. What if all minimum wage laws were repealed tomorrow? Company A decides that they can lower their wages and thereby increase profits. Company B (for example, the town grocery store) suddenly finds themselves with less business because some of their customers (company A’s employees) now have less income. So company B also has to make cuts. This in turn affects company A who no longer can make as many sales to the grocery store employees. You suddenly have a race to the bottom.
Hey no offense Oakminister but what’s best for society as a whole may not be best for you. I’m not saying the deal you have with your assistant is unfair but maybe we would be better off in a country where people like you did the work yourself until you were able to afford higher labor costs.
If the law was changed and the assistant had to be let go, how would that help society? Does society really need more unemployed people, and less productive lawyers?
Is there a limit to this? Would everyone else’s businesses become more profitable if the mininum wage went to $15 per hour, 20 per hour, 50 per hour, or $100 per hour?
If that were true, then why don’t all workers make MW? There can be a “race to the bottom” if the bottom is $0 or the bottom is $10.
As for the first part-- only something like 3% of all workers in the US make MW. I thought we debunked the idea many threads ago that small increases in the MW can produce a measurable effect on our ~ $16T economy. However, if you’d like, you can do the math again and tell us how that all works.
Probably true. The big problem with the Minimum Wage is that there’s no real reason to beleive it’s done much actualy, measurable good, but thus far hasn’t caused a lot of visible problems, either. The studies are rather mixed and mostly not of high quality (the pro-Min Wage Card and Krueger study is complete horsefeathers and a poor source, but there are others pointing both ways).
This means that we’re all basically flying blind. We know there’s a real upper limit on the Minimum Wage before we collectively kick ourselves in the voonerables. Practically, there’s enough support that eliminating it is politically impossible. So there’s an upper bound a lower bound, an nobody knows where any of the bounds are, or what it actually does when we move the Min Wage around within them.
On the whole, I appose the Min Wage on the grounds that most of the supporters can’t show a reasonable mechanism that it would actually help the economy overall; the usual basis for their claims seems quite weak and unproven. It’s a Just-So story which relies on emotional manipulation rather and intuition rather than demonstrated evidence or logic. That said, there’s very little to prove anything either way, so what it ought to be set to comes down to a bit of a handwave and hope in the end, no matter what anyone believes.
Yes. But I think you knew that already.
Are we done with the MW hijack? I’m curious to see what people have to say about the OP. If BigBox disappeared tomorrow, would the workers be better off or worse off?
Of course, the point is that there is no magical number that changes how wages affect the economy. It is easy to see the effect of a minimum wage of $50, but the effect is still there at $10. It is just much smaller. So the key to correct economic reasoning is to think on the margin.
To the OP’s point. If big box stores cause the destruction of smaller stores, this does not occur instantaneously. At the time of the big box store opening, the prospective employees come from situations where they prefer working at the big box store to unemployment or alternate employment. No one would quit a higher paying job to work at Walmart. So ipso facto, the opening of the Big Box store improves life for its employees.
A case could be made if big box stores close smaller shops that the employees of the smaller shops are hurt more than the employees of the Big Box are helped. However, just focusing on the employees misses the fact that consumers are also helped. So in order to prove Big Box stores are bad you have to prove the benefit to the employees and the benefit to the consumers is smaller than the harm to the employees of the other stores.
Apparently not. :rolleyes:
I find it hard to see how a big retailer would add anything to the community. Their revenue has to come primarily from selling stuff to the people who live there, most of which arrives elsewhence on trucks. The smaller the community, the bigger net deficit (excepting the towns that survive off of tourism), especially given that BoxMart is aimed at maximizing cashflow. Some stores are better than others wrt to directing a measure of their profitability into the communities they serve, but I still cannot see the net positive.
How much does that local Box-Mart pay in local and state taxes, how much do they pay in utility costs or other local services annually, and how much do those 300 employees each pay in individual local taxes annually? My guess is that even if we discount the fact that these 300 people would either not be working or would be working similar jobs for similar pay with similar benefits, and even assuming that the article is correct in calculating these additional costs to the tax payers, I’d guess it’s a net gain. I’d be surprised if a successful Box-Mart was paying less in taxes, not to mention local services it’s buying AND the fact that it’s paying 300 employees who are also being taxes and who are spending a non-zero amount of money on local services as well doesn’t add up to $900k per year in benefits to the tax payers…and this leaves aside the fact that if they didn’t have a local Box-Mart they would probably be having to either pay more or drive further to get to the nearest Box-Mart.
The problem with this analysis is that it applies regardless of who does the retailing. No matter what anyone thinks in theory, the plain fact is that whether you have one big box or several smaller stores, you’re going to end up with roughly the same amount of stuff sold, and it’s going to come from out of town in the same proportions. Small retailers don’t buy local any more than big boxes, because even the largest cities only manufacture a small fraction of their own goods and have for a couple centuries.
Likewise, it ultimately doesn’t matter much whether the profits are “local” or not, because you end up with roughly the same number of local business managers. In the long run, it probably increases economic efficiency and therefore the overall demand for whatever the community does produce successfully.
I’m not sure what you think you mean by “thinking on the margins.” It almost sounds like you’re claiming that if a MW hike to $50 is bad, then a hike to $10 is also bad. Review prior MW threads to explore this error.
Please explain this “economic efficiency” and why I would think we should strive for it. It sounds perilously close to “productivity” (maximizing worker output for the lowest cost).
Wouldn’t cheaper prices be (generally) good for a community?
Good question. I think the answer is a fair bit more complicated than “good or bad”.
One thing the article doesn’t really go into is that while the Wal-Mart employees may end up costing nearly a million dollars a year in public assistance, we don’t know what the amount was prior to the Wal-Mart.
For example, if they were spending 1.5 million on them because they were previously unemployed, that’s not nearly as bad.
OTOH, if they were drawing no public assistance, and the Wal-Mart showed up and drove them out of jobs, and then hired them at crud wages and now costs 900 million in public assistance, then yeah, that sucks.
I’m inclined to think the first is the case, or a variant where people had other jobs that were equivalently bad and low paying, who now work at the Wal-Mart.
Economic efficiency is basically the maximal provision of goods and services for a given starting amount. It’s an academic term, not a social one.
And you make it sound like productivity is an evil, which is nonsense. It can be taken to absurd extremes, sure, but overall, it’s a good thing.
Oh, and big box stores basically are a good thing for a lot of communities because they provide many items at a lower cost than before. Prior to Wal-Mart, many small towns had local five and dime stores, and drugstores, where people had less choice and higher prices. Now that Wal-Mart’s there, a few people may be out of work, but for the rest, their money goes farther since things are generally cheaper.
That’s also economic efficiency in a sense as well.
How so? I’m having a hard time thinking what the down sides might be, but if you have some in mind could you go into detail? Why would cheaper goods and services be bad for a community? What other downsides do you see?