# Minimum Wage Idea **URL:** \ **Category:** In My Humble Opinion\ **Created:** [May 5, 2015, 8:57pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339 "2015-05-05T20:57:04Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [May 6, 2015, 11:01pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/41 "2015-05-06T23:01:59Z")
> [@bump](#): > > Why? What’s the point of doing that? The only thing I can think of is that it’s a semi-punitive measure meant to stick it to bigger companies by forcing them to pay higher wages than companies that are smaller, and ostensibly can’t pay as much. If you look at my very next sentence, I said: It’s “working” for lots of other laws in the US. I put “working” in quotes for a reason. I’m not arguing that we should burden large business. I’m not saying we should implement minimum wage that way. I don’t necessarily support the point of such laws. (Though I don’t necessarily oppose it either.) I’m just saying that if many old labor laws already base the implementation on employer size, then it seems reasonable for new labor laws to also base implementation on employer size. FLMA, OSHA, COBRA, ACA, ADA… pick your acronym. They all have some rules that are different for large companies than for small ones. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [May 6, 2015, 11:07pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/42 "2015-05-06T23:07:07Z")
> [@Hershele\_Ostropoler](#): > > This sounds like “companies will be deliberately less successful than they might otherwise be because otherwise the Gummint will make them do something.” I suspect I’m misreading. I can believe that a few petulant libertarians will act like that, but I think most business owners, regardless of the size of the business, would rather be more successful than less. > > (I’m not in business, but I assume the humans behind most corporate decisions don’t want to pay the workers less as an end in itself, they just want to pay the owners more.) Say I own 10 Taco Bells and employ 25 minimum wage workers at each and have a profit of 850,000 total. I have the opportunity to open two more restaurants and earn a profit of 1.0 million dollars, should I do so? That is an additional 2 thousand dollars per worker. By opening the two extra restaurants I have reduced my profit by $350,000. So I never open those two restaurants, doesn’t matter if I am a petulant libertarian or a bleeding heart liberal. If you have a business that employs lots of minimum wage workers you have to keep an eye on labor costs and an 11% raise in labor costs is a huge deal. **DinoR** it is my understanding that the EITC is paid when you file your taxes and not biweekly like a paycheck. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 6, 2015, 11:14pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/43 "2015-05-06T23:14:00Z")
> [@dracoi](#): > > One issue I see is that there are ways around it. For example, instead of Big Corp hiring 100 janitors directly as employees, they could spin off those employees to “Janitorial Services Inc.” and then have a service contract with this new “independent company” to provide cleaning for $900,000 a year. Thus, JSI’s revenue is at the lowest level and BC isn’t paying employees to clean. > > We’re seeing that happen to some extent with the health care mandate, where employees are reduced below thirty hours (and thus not required to be covered) or companies outsource functions to reduce their employee count below 50. The law adds up all employees under “common control” (i.e. if you own five companies, then all employees are added up to see if all five companies must provide health care), but outsourcing services can often be done without common control. Where have you been hiding? Big companies already do this, and have done it long before ACA was passed. They don’t want to pay janitors and others the benefits, and don’t want to have employees in two classes. There have been some protests by bus drivers for Google and Yahoo and the like to get these benefits, and they have had some success. But as I said, companies will invent any loopholes possible to avoid new mandates. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [May 7, 2015, 12:21pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/44 "2015-05-07T12:21:19Z")
> [@puddleglum](#): > > **DinoR** it is my understanding that the EITC is paid when you file your taxes and not biweekly like a paycheck. A person can adjust their withholding rate so that their net take home rate is more to account for the EIC, thereby causing their bi weekly pay to be higher. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [May 7, 2015, 1:12pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/45 "2015-05-07T13:12:52Z")
> [@Voyager](#): > > Did I say that this particular article mentions unemployment? You claimed this - > [@](#): > > Good cite. I find it amusing that minimum wage increase opponents say raising the minimum wage will increase unemployment and drive companies into insolvency, while on the other hand saying it is useless because hardly anyone would be affected. Why did you mention unemployment as if it were relevant to the cite? > [@](#): > > Is there a fight among conservatives along the line of > Increases Unemployment! > No Effect! > that I don’t know about? No, the fight comes from liberals who claim it won’t increase unemployment, and who think that things like the link that don’t address unemployment and assume that correlation = causality are a “good cite”. Regards, Shodan ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [May 7, 2015, 6:34pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/46 "2015-05-07T18:34:49Z")
> [@Voyager](#): > > Where have you been hiding? Big companies already do this, and have done it long before ACA was passed. They don’t want to pay janitors and others the benefits, and don’t want to have employees in two classes. > > There have been some protests by bus drivers for Google and Yahoo and the like to get these benefits, and they have had some success. > But as I said, companies will invent any loopholes possible to avoid new mandates. I haven’t been hiding anywhere. I’m the one who who pointed out that companies are already using loopholes to avoid mandates. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2015, 7:01pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/47 "2015-05-07T19:01:56Z")
> [@Shodan](#): > > You claimed this - > Why did you mention unemployment as if it were relevant to the cite? > No, the fight comes from liberals who claim it won’t increase unemployment, and who think that things like the link that don’t address unemployment and assume that correlation = causality are a “good cite”. > > Regards, > Shodan When I said minimum wage opponents, why did you think I was limiting this set to the cite? I’ve read plenty of arguments against raising the minimum wage, many of which do refer to unemployment. I’m also familiar with the argument in the cite. To repeat myself, it is amusing that the two major arguments against it are contradictory. As far as the MW wage not significantly affecting unemployment, that comes from studies, not wishful thinking. You do see the contradiction, don’t you? ---
**Author:** ![brendon\_small](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/brendon_small/32/17101_2.png) [@brendon\_small](https://boards.straightdope.com/u/brendon_small)\ **Post date:** [May 7, 2015, 7:53pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/48 "2015-05-07T19:53:47Z")
> [@Wesley\_Clark](#): > > There aren’t many people on minimum wage but there are lots of people within $3 of minimum wage who would see their wages go up due to a minimum wage hike. I only read about half the thread after this - maybe this was already addressed… There is a big logic issue here. As someone who worked through college when the wage was raised multiple times, here is what happened for myself and most people I know. Minimum wage is 5.15/hr. I work at a carry out. I make 5.15 for the first six months. At the end of that, I get a review, and my pay is bumped up a little higher. This is not a big difference in the grand scheme of things, but helps my income. Not too long later, minimum wage is raised. Unfortunately, the new minimum wage is very close to what I make now with my raise. My pay never changes, but every new person we hire makes the new minimum wage. I was working in a hotel just before graduation. I worked 3rd shift, so I made more than those that were on day/evening shifts. Minimum wage increased – my overnight pay stayed the same, but everyone else’s pay was raised to the new minimum wage, about 10 cents less per dollar than I was getting. The problem with minimum wage is that it is a minimum. If it goes up a dollar, great for everyone within that range. Everyone over that does not see a pay increase. In my limited experience, I worked consistently for the last 10 years and part time through school before that. I never once was given a raise for cost of living until my late 20s, and it was a 5% increase that had been in the works for quite a long time. That happened in 2012. No one has had a pay raise at the company since. I took a new job elsewhere making slightly more and started in 2013. From 2013 until now, I’ve heard a ton of people say that the minimum wage should go up. My pay hasn’t changed at all (unless you count the furlough I was put on for nearly 6 months). If minimum wage goes up more, I’m willing to bet my current employer will not be raising my pay. It’s not that I don’t want good things for those making the minimum, it’s just that it isn’t a structured thing where everyone moves up – Just because minimum wage is raised doesn’t mean that everyone else’s pay goes up as well. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [May 7, 2015, 7:56pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/49 "2015-05-07T19:56:39Z")
He didn’t say everyone. He said lots. ---
**Author:** ![brendon\_small](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/brendon_small/32/17101_2.png) [@brendon\_small](https://boards.straightdope.com/u/brendon_small)\ **Post date:** [May 7, 2015, 8:04pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/50 "2015-05-07T20:04:33Z")
> [@Really\_Not\_All\_That\_Bright](#): > > He didn’t say everyone. He said lots. That is true – but if minimum wage raises from the 8.10 it is now in Ohio to 11.10 (within 3 dollars, as was stated) - I’m sure those people that got are making 12/hr trying to get by will be extremely excited. Still effectively a pay cut for them if prices change at all in the town where they live, right? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 7, 2015, 8:10pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/51 "2015-05-07T20:10:12Z")
> [@Kropotkin](#): > > In the book The End of Economic Man, the author has an interesting idea for wages and salaries. Start at whatever entry level wage you want. Say, $10/hour. Now it’s promotion time. In most jobs, like the Olympics, if someone is 10% better than the next person, that’s huge and obvious. It’s like winning the 100 meter dash by a second. Most jobs are similar: the difference between the winner and the runner-up is often tiny. But call it 10%. So they should be paid 10% more. Say there are 10 steps from entry level to CEO… Pay them 10% more at each step. Do the math to calculate the CEO’s salary… Why is that a good plan? What is so magical about 10% steps? How is such a plan enforced (if it’s not enforced, it’s going to be mostly the shitty managers who go to the companies that use it). ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [May 7, 2015, 8:35pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/52 "2015-05-07T20:35:56Z")
> [@John\_Mace](#): > > Why is that a good plan? What is so magical about 10% steps? How is such a plan enforced (if it’s not enforced, it’s going to be mostly the shitty managers who go to the companies that use it). I don’t think the problem is even the 10% idea or the number of steps, since those could be arbitrary in number of value. The problem is illustrated by the Olympic athlete example. If a company needs to win a gold medal and someone who can run a 4-minute mile will cost them $100,000/year, what’s the value to them of someone who can run a 5-minute mile? It’s not $80,000. The 5-minute guy can’t do the job, and no number of 5-minute guys can compensate. You can either run it in 4 or you can’t. The example only works as long as you believe in the fallacies that most jobs aren’t all that different and that two people who are half as good are equal to one person who is actually good. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 7, 2015, 9:25pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/53 "2015-05-07T21:25:20Z")
Oh yeah? Well, I once new 9 women who had a baby in 1 month! ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2015, 11:34pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/54 "2015-05-07T23:34:09Z")
> [@brendon\_small](#): > > If minimum wage goes up more, I’m willing to bet my current employer will not be raising my pay. It’s not that I don’t want good things for those making the minimum, it’s just that it isn’t a structured thing where everyone moves up – Just because minimum wage is raised doesn’t mean that everyone else’s pay goes up as well. This is very true, but it applies to jobs far, far above minimum wage ones also. There has been salary compression many times in the past 35 years. That is when salaries for new hires in the competitive market go up much faster than salaries for employees. The reason is that existing employees often would rather take a bad raise than risk a new job. The only way to break out is to be exceptional, and get promoted, or leave and be in the marketplace again. And someone doing this who will only take a job $4 above MW, say, will do better than before the increase. In fact the bigger the gap the faster people will leave for more money, the more openings that have to be paid market rates, and the faster the increase in average salary. A rising tide raises only those boats not anchored to the sea bottom. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2015, 11:35pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/55 "2015-05-07T23:35:21Z")
> [@John\_Mace](#): > > Oh yeah? Well, I once new 9 women who had a baby in 1 month! Everyone who has worked on parallelizing programs knows there is a drop off as you increase the number of processors. I’d expect it to take 2 months. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 8, 2015, 3:01am UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/56 "2015-05-08T03:01:11Z")
> [@Mrdeals](#): > > My idea (at least I think it is) would be to have businesses pay minimum wage on a sliding scale like how individuals pay taxes. > > Just quick numbers in my head that have no real world calculations: > > Businesses with revenue $0 - $1M need to pay $8.50 min > 1M - $10M $9.50 > 10M - 50M $10 > > Etc etc > > I’m not an economist by any means. > > But how do you think my idea would work? I don’t really understand what the purpose of this system would be. Why would minimum wage be tied to the size of the company? Walmart and McDonalds employ hundreds of thousands of workers. Most make minimum wage. I had an interview at a management consulting firm this morning that employs less than 200 people. I doubt many of them make less than six figures. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 8, 2015, 4:27am UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/57 "2015-05-08T04:27:14Z")
> [@msmith537](#): > > I don’t really understand what the purpose of this system would be. Why would minimum wage be tied to the size of the company? Walmart and McDonalds employ hundreds of thousands of workers. Most make minimum wage. I had an interview at a management consulting firm this morning that employs less than 200 people. I doubt many of them make less than six figures. BIg is bad, and big must be punished!! ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [May 8, 2015, 4:32am UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/58 "2015-05-08T04:32:18Z")
> [@John\_Mace](#): > > BIg is bad, and big must be punished!! Well, for the record, I don’t think the Op’s idea is all that out of line with a lot of size related legislation for businesses. Many many regulations vary depending upon the size of the business. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [May 8, 2015, 1:27pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/59 "2015-05-08T13:27:21Z")
Not on a continuum, though. For example, the FMLA (and most similar legislation at the federal level) applies to businesses with more than 50 employees, and that’s it. There’s no increase in the amount of leave required for businesses with 100, or 1000, or whatever. ---
**Author:** ![Phu\_Cat](https://avatars.discourse-cdn.com/v4/letter/p/77aa72/32.png) [@Phu\_Cat](https://boards.straightdope.com/u/Phu_Cat)\ **Post date:** [May 8, 2015, 6:30pm UTC](https://boards.straightdope.com/t/minimum-wage-idea/719339/60 "2015-05-08T18:30:39Z")
Everybody is looking at this from the employee’s perspective. The employee may think he/she is there for his/her own benefit, but they aren’t. They’re there for the employer’s benefit. That’s why the employer is paying them a salary for a certain amount of work within a given amount of time. If the employee doesn’t meet those qualifications, the employee may suffer certain penalties. None of this was discussed above. Does this employee meet the minimum standard, or do they possibly exceed the standard? Therein lies the question of increasing the minimum wage. Just arbitrarily raising the minimum wage because certain people scream loud enough is only a temporary fix. If you are trying to support a family on minimum wage, something else is wrong AND IT AIN’T SOCIETY’S FAULT! Phu Cat [Previous page](https://boards.straightdope.com/t/minimum-wage-idea/719339.md?page=2) [Next page](https://boards.straightdope.com/t/minimum-wage-idea/719339.md?page=4)