Rocky the Squirrel: ‘Aw, that trick never works!’
But it will happen this time!
Rocky the Squirrel: ‘Aw, that trick never works!’
But it will happen this time!
A wage is simply a price. In a free economy, all prices are (and should be) determined by supply and demand. For non-government jobs, there should be no minimum or maximum wage. An employer should have the liberty to pay a wage of $0.10/hour, $1M/hour, or whatever the market will bear.
This assumes, of course, there is free competition in the market.
OTOH, it benefits society when people are able to contribute to it. Below a certain point, people can’t contribute. Below that point, it is a detriment to society.
That attitude is not locked in the past. That is exactly what happened with the Hostess unions a few months ago.
Actually, if 84% of the people working minimum wage jobs are high school and college graduates and potentially trying to raise a family then your taxes are helping pay for their low salary. Every person in Section 8 housing, on Medicaid, SNAP/TANF benefits, or on any other government benefit plan who works one (or in many cases, two) of these jobs is having their low salary supplemented by your tax dollars.
Society is benefited by a free, open, and competitive market.
However, it was management that ultimately killed the company, not union demands.
Which was demonstrated in 2007.
I generally think there should not be a minimum wage, much like Crafter Man. To address Johnny L.A.'s point, I would advocate a Negative Income Tax (actually quite the overhaul of the tax structure, but this is not the thread for that).
I also get that 16% of fast-food workers are teenagers. (It’s only been posted 3 times). That doesn’t mean the other 84% need to make enough money to have a living wage - they need to develop the skills such that they are worth a living wage (which sounds heartless, but is true), or have supplemental income, either from parents, spouses, children, etc.
Not every job needs to be a job that would support a family of 4. Some jobs don’t even have to support a family of one. If I decide to take up lawn mowing for some extra scratch, it doesn’t mean it has to pay me enough to live on.
And as far as ‘Well, you should have known 30 years ago that real estate was going to crash or that programming would be done remotely in other countries! You eediot!’… anyone that’s looked as code that was developed overseas knows why competent developers don’t have to worry about offshoring. And anyone with enough self-control to buy a house they could afford didn’t have to worry about the real estate crash.
That’s really the crux of the issue from a lot of people’s perspectives. They themselves worked hard, learned skills and got something that pays more than minimum wage- let’s say $15/hr.
The very definition of a minimum wage worker is that you don’t bring anything special, unique or worthwhile to the party; you’re a warm body who can do something mindless just like ANY other person out there they can hire and pay that minimum wage.
Someone making minimum wage at their primary employment (i.e. not summer job, not supplemental job, etc…) pretty much has to either be extremely stupid and unable to learn, or to have made poor decisions somewhere along the line.
So yeah, I can see how someone making $15 an hour because they made good decisions, tried hard, etc… might resent the minimum wage being raised to their level because it basically negates all their hard work and any sacrifices they might have made to get that $15/hr job. It basically says that they’re as worthless and interchangeable in the job market as some dunce who didn’t graduate high school and smoked too much pot and doesn’t have the drive to get anything other than a burger flipping job at Wendy’s.
Some folks here (and in other places) seem to think that inflation is linearly related to wages. That is, if wages double, prices of everything will double, and we’ll be right back where we started. Let’s think about that for a minute.
Labor costs for fast food restaurants are in the range of 25-30% of revenue. Let’s just assume that everybody at fast-food restaurants is making minimum wage, and we double that to around the $15/hour mark. If the restaurant owner wants to keep the same absolute profit, he’ll have to increase prices by 25-30%. That’s a big increase, but all those low-income workers have just had their pay increased by 100%. So, relatively speaking, that stuff that is now more expensive in absolute terms is, in fact, relatively cheaper for them.
The people for whom it is relatively more expensive are the people who are making more than the new minimum. But they probably weren’t spending all of their money on goods/services that depend on minimum wage labor. Suppose they only spent 50%. So their relative increase in expenses is only 12.5-15%. So they would be better off than they were before if they demanded and got, say, a 25% wage increase. Which would certainly increase prices of the goods they produce, but since cost of production is almost never 100% labor, the costs of their product would probably go up by a smaller fraction than that.
Ultimately, I don’t think increasing the minimum wage does much but slightly flatten the income distribution. And that’s been shown to increase growth (this isn’t GD, so no cite).
To those who believe a free, open market cures all ills, I’d point out that a perfect market requires there be no asymmetry of information or power. One of the jobs of government is to ameliorate those asymmetries. I’d support eliminating the minimum wage if the government required every individual and business to publish the wage or salary of every employee. That way we’d all have the information we need to properly negotiate our pay.
Or, we could just index minimum wage to inflation and be done with it. (Which, as *RealityChuck pointed out, would set it at about $15/hr.)
That’s funny. When an industry rests atop a Jenga tower of regulations, it’s rather silly to yank out one block and scream about the evils of a free market as everything crashes to the ground.
That’s the attitude that damn-near destroyed the US automotive industry a few years ago. Fortunately, the autoworkers’ union was smarter than the bakers’ union, and finally realized that half a loaf is better than nothing (pun intended).
LOL. The real estate crash was cause by allowing the poorly regulated sub-prime industry to thrive for a decade. Lenders didn’t verify the possibility that the loans they made might not be paid back. They weren’t required to hold the sub-primes in-house so they had no skin in the game. They made money by makeing the loans and selling the sub-primes to investors. The bursting bubble was only a matter of time. The people we elected to watch out for us should never have let the situation get as far as it did. I blame the Barney Frank-types for continuing to “roll the dice some more” when questions about the sub-primes surfaced.
People with “degrees” don’t normally chose to flip burgers at $7/$8/$9 per hour. There are no jobs in their repective fields and they do what they need to do to make ends meet. If cities, states, and the federal government would do what they could to encourage, instead of discourage, more start-up companies and create an evironment for more employers to hire more employees, those hard earned degrees could be put to better use. At higher pay scales.
Wait, yellowjacketcoder and bump
Do you really not think there are people with bachelor’s, master’s, even phd’s in food service jobs? I can tell you for a fact there are a lot of well-educated people in these jobs. I know one. She has a master’s in microbiology. Now, are you telling me that because the market screwed over all these people, they don’t deserve to have a job that lets them eat without government subsidies, and that they’re too stupid and don’t bring enough to the job to deserve more? These people didn’t choose food service jobs aside from it was either that or go homeless.
Regardless of the fact that we do have well-skilled workers in these low-skill fields (often paying student loans, to boot):
Why don’t all food service workers deserve even the basic dignity of a living wage? Why should we allow anyone to have less than is required to live? Is there any good reason to simply look at the bottom 10% of people and say “Sorry, looks like you’ll have to be homeless and go hungry because even though we’re a first-world country, I don’t think you’re good enough to have your basic living needs covered.”
Of course, we deny them a living wage and disparage them when they have to turn to the government for help. There’s literally no winning for these people in society. And the companies make record profits.
Is it? I don’t know what your job is, but McDonald’s jobs aren’t easy. They’re fast-paced, on your feet all day, working in a hot kitchen or in direct contact with the public (who are often rude and smell weird).
If I had the option of my current job, where I get to sit in a nice air-conditioned office, read and write emails and code, or a McDonalds job at the same wages, I’d pick mine in a second.
That said, I think a (much) higher minimum wage is not really going to work out in the long run. It will just accelerate the reduction of the labor force further. We’re not that far off from a robot that can flip a hamburger, and most of the order-taking duties could be replaced by a few touch screens and some custom software. I think a better solution to the problem of people not being able to find more than minimum wage work is to increase the Earned Income Tax Credit. That way, work that’s only worth $8/hour still gets done and people who can’t find more rewarding employment get enough extra to make ends meet.
according to the dept of labor, dol.gov, it was $1.15 and $1.60 in 1960.
I admit I skipped a lot of posts. Pardon me if I repeat.
Many studies have been done on the effects of minimum wage increases. It has little effect on inflation IIRC.
Now, we spend a lot of time talking about minimum wage, how about we talk about LIVABLE WAGE. That is where a person makes enough money in a job to cover housing, food, medical insurance, utilities, slight savings, etc. It is variable based on where a worker is. The cost of living isn’t the same in Seattle as it is in Podunk. It strikes me as a smarter wage model.
Minimum wage 1955-2012 (in constant 1996 dollars)
Looks like the peak was in 1968, with minimum at $7.21 (1996 dollars), and 2012 wage around the middle of the range at $4.97 (1996 dollars). To get back to that 1968 level, we’d need to increase minimums to $7.25*($7.21/$4.97) = $10.51. I think that would be nifty.
$15 per hour times 40 hours per week is $600 before taxes.
So, for fun, let’s pretend the worker will get about $500 take home pay.
About $2000 per month.
So - paying rent, transportation, utility bills and, with any luck, perhaps paying a low fee for some decent Obamacare…that doesn’t sound all that outrageous to me.
As others have mentioned, the “old days” of high school kids working there part time to pay for movies and clothes fun stuff are long over…people take these jobs to LIVE.
Would it kill any of you to spend an extra buck or two for that McDonald’s fix for lunch?
Geez - when gas prices went up to $2 gallon, people were certain nobody would ever drive more than just to work and back - and now you hear people say that prices have “gone down” to only $3.64 per gallon…
In other words, you will get used to it, and at least the money is going to local workers and not a few billionaire CEO’s of gas companies.