Minimum wage

In My Humble Opinion
101

Like I was saying though, even if a certain area does have a job boom that is no guarantee of anything as far as nationwide trends. North Dakota has a job boom because of the oil growth there. However there are drawbacks, a small town now finds itself flooded with far more people than it was designed to hold. As a result rents are 400% higher than they were a decade ago and (I believe) food service and groceries are not able to keep up with demand (the part about food service may not be true though, I’ve heard about people going hungry due to lack of available food in the area but that could be for different reasons). Rents in small towns in North Dakota are starting to match what you find in San Francisco or NYC.

Like I said, nursing used to be a golden ticket. Then people flooded the market while the older workers stayed on the job instead of retiring. As a result there are unemployed nurses, something that didn’t use to happen.

There is a nationwide job shortage, we are short about 30 million jobs. The population grew by about 30-40 million people since the 90s, but job growth hasn’t, we still have about 130 million jobs with an extra 40 million people. Fifteen years ago we had 130 million jobs and 280 million people, now we have about 130 million jobs and 320 million people. Plus the jobs are not as high quality as they were, I believe there are fewer high quality jobs and more lower paying jobs. So people need to make the best of what they have.

102

Why is that a bad thing? The reason our lifestyle is so much better in 2013 vs 1750 is because of all the automation and machinery we have now increasing our productivity. A world full of low wage abundant labor sounds like a shitty dead end. If labor costs explode that will lead to an increase in R&D in robotics, which will increase our standards of living down the line. The industrial revolution made about 70% of people in various manufacturing industries unemployed, but down the line everyone benefitted from it.

Plus as you have more wealth with fewer workers due to that, the wealth eventually gets redistributed (thank you socialism). Instead of everyone in the family working from age 5 until death, people now work 2000 hours a year for 30-40 years, the first 20 and last 20 years of a person’s life is spent not in full time employment. So a person may only spend 70,000 hours in a lifetime working for pay. If automation grows, that may eventually be cut to 40 or 50 thousand hours. There will be bumps, but the wealth will eventually be redistributed.

103

It isn’t a bad thing in the overall sense. You get more productivity per labor hour. I don’t dispute that. What is a problem is when you have millions of people who don’t have a job due to automation and overall efficiency gains. Automating a factory so that one person has to fix the systems when they break creates one good, high-paying job but it doesn’t account for the 50 other lower paying jobs that were lost enabling that model to exist. The cartoons from the 1960’s never addressed that last part because no one knows the answer to it.

There is no economic model in the U.S.or anywhere else to distribute economic gains overall other than thorough work. That is huge intellectual and economic problem that no one seems to know the answer to. Back in the 90’s, the media predicted job sharing so that skilled people got to work for less time but for still reasonable pay. That doesn’t happen. What you see in the real world is that companies grab people like me and work them as much as possible and pay them to stay so it is still worth it . Everyone else loses because frankly, they are either not needed or are interchangeable.

The core problem for all of these types of situations isn’t one that anyone is wiling to address. There are simply 3x or more as many people as are needed in the world. If you address that in an aggressive way, you will address everything from the wealth distribution problem to global warming in 100 years or fewer. All other measures are just putting a Band-Aid on a grenade wound.

104

It depends on how you define needed. There are an extremely small sector of people who are extremely productive and useful, a larger (but still tiny) group that are very productive, a still larger group that are still pretty productive, etc. But yeah, most of use are just shitting and eating and contributing little to society, hoping the world that we passively exist in that other people create is one that we find enjoyable.

High skill labor will become irrelevant in this century too. I don’t know if you were implying this in your post, but automation won’t just affect low skill, low education, low creativity work. A robot that performs heart surgery independent of a doctor’s control was tested in Italy several years ago. Most of us will find ourselves useless before the century is up. But yeah, in today’s economy having a marketable skill that requires a high degree of intellect, creativity and education is still something in high demand.

105

This is my position as well. We’ve had many threads on this. When the wage was $5.15/hr most posters here supported the increase to $7.25. Recently we had a thread arguing for $10/hr. Now a thread arguing for $15.

The common denominator seems to be that the current wage isn’t enough. More is better. But when one asks why not just make the minimum wage $100/hr and make everyone rich, he is met with a response that he is just being silly and that there needs to be a reasonable cut off point.

Like you, I want to hear a reason why $15 is a sweet spot. Not just that rich bastards who own businesses (that’s another fallacy) can afford it, but an economically sound reason that $15 (as opposed to $100, $10, or $25) is the way to go, and also that it won’t have unintended consequences. For example:

Should it continue up the scale? If I’m making $20/hr, should my wage go to $35 by law? If I make $50, should it go to $85 by law? If not, then the vast majority of middle class people will get absolutely screwed by this deal.

106

I’m the OP, and I didn’t argue for a $15/hour minimum wage.

It does not follow that anyone is getting screwed if their above-minimum wage salary does not go up. If you’re making $20/hour, you’re doing OK. If you’re making $50/hour, you’re doing pretty damned well. If you’re making under $10/hour in Seattle – and I think most fast food workers don’t get 40 hours per week – you’re not making enough to live on.

107

That’s an excellent point. I’ve never quite understood the “ask for a raise” meme in popular culture, since I’ve only worked for large companies with very rigid compensation policies, done once per year from a pool of money. I’ve participated in it several times, and have even run it for a large department. As a manager if someone came to me asking for a raise, I wouldn’t know how to get him one. Someone has bargaining power when he has several offers, not much after that.

108

I’d bet that $15 was chosen as both a nice round number and double the present minimum wage. I bet we’d all be happy if employers pledge to share gains in profitability from productivity improvements with workers.

109

If minimum wage goes up , not everyone earning above minimum will be screwed but some will have to be given raises. For example, in a lot of minimum wage jobs, only the newest employees get minimum. Others get a small raise after 6 months , another after a year , etc. It’s not much- but it’s often enough to keep the employee from quitting McDonald’s where he makes $8/hr to go to Burger King where he will start at $7.25. Another situation is salary compression- if there is not enough difference between a supervisor’s pay and an employee’s pay , it will be difficult to fill the supervisor positions. If you raise the minimum wage cashier from $7.25 to $10, how much do you pay the supervisor who earns $9 before the minimum went up ? I don’t know how far up these affects will go if minimum is raised - but I do know that at my current job this is an issue for positions paying over $80,000. They won’t take a promotion because it’s not enough of a salary increase.

110

I don’t have the study, but supposedly people within about $3 of the minimum will likely see wage increases with a higher minimum wage. If someone is now making $9.50/hr and the min wage is increased from $7.25 to $9, then that employer will likely raise their own wages sooner or later. I guess there is ‘some’ competition among lower wage workers to pick the best, most reliable and hardest working low wage workers.

111

The opponents seem to be arguing that if you increase the minimum wage by a percentage, then people not making minimum wage must have their salaries raised by the same percentage. That’s absurd.

In no place where I’ve worked, where there were minimum-wage employees, did people in higher positions receive the same percentage raise when the minimum wage increased. In the corporate world where I’ve worked, vice presidents would get 10% or higher raises; managers would get 6% to 8%; the rest of us would get 1%, except for the exceptional performers who got 2%.

I see two issues: If we want the economy to grow, we need more people spending money. I call this the ‘trickle up’ theory; others call it the ‘rising tide’ theory. And; if we want to reduce ‘entitlements’, then we need people to make enough money that they don’t need to use them. Raising the minimum wage will allow people more money to purchase consumer items and drive the economy, and reduce the need for ‘food stamps’ and other government subsidies.

112

This is an important point of any minimum wage debate that often goes unacknowledged, and I want to thank Diceman for making it so evident. There is a certain ugly meanness of spirit in human nature that likes to grind its boot into the face of those on the bottom of the economic ladder. No wage is too low, no suffering or privation too intense, to be too much to heap on them. This is often what motivates people who argue against raising the minimum wage or helping build better social safety nets on economic grounds: they really just want to grind their boots into the faces of the poor because it makes them feel superior. Arguing with such folks on economic grounds is almost pointless: every argument you make will be ignored, sidestepped and handwaved, including appeals to fairness and morality. Direct attacks on the the dominance/submission aspect of wage debates and social safety net debates is the only way to deal with it, but most progressives and liberals are afraid to do so.

113

Sure it does. Unless we are willing to believe that a 100% increase of the minimum wage won’t affect consumer costs which is ridiculously optimistic, people’s buying power will be reduced making them “screwed.” At this point, given there’s never been an increase of anywhere near that much, it’s hard to predict how screwed the average person would be.

114

First, I agree that $15/hour is too generous. Also, it’s not a 100% increase here. Closer to 50%. I would like to see ~3% for part-time workers in this state, and ~1% for full-time workers.

Second, see post #5.

115

For the same reason, workers cannot just arbitrarily demand higher wages. Wages are no more elastic than the price of the finished product. Ultimately, if the price/wage goes up enough at any given point in the cycle, fewer workers will be hired, or fewer people will buy the product.

The very best possible result of forcing prices/wages up at any one point in the economy would theoretically be that prices/wages go up uniformly across the economy, in which case you just have simple inflation. A worker may make X% more than he did before, but everything he buys will cost X% more as well, so, in terms of what he can buy with what he earns, he is no better or worse off than before.

116

But the prices of the finished product, especially one with low labor content, will go up at a much lower rate than wages.

That is simplistic. First, as mentioned, wages will not go up uniformly.
Second, increased wages at the bottom will increase consumption, and thus demand, and thus help the economy. An equal increase at the top does not increase demand, as we see. In the past decade or so there has been plenty of money to pay the top, but not the bottom, thus the slow growth in demand.

117

$15/hour = no change in the price of a Big Mac

Willy Wonka on minimum wage and the price of a Big Mac*

:smiley:

118

Mentioned all over everywhere I happen to be these days, I’m a manager at a restaurant where the workers get minimum wages.

I see the daily sales reports, I see exactly how much we spend on wages. I also see the arbitrary increases and decreases in prices. The company remains quite profitable no matter what the price is, because the price they set is always profitable to them.

We even make money off of the free breadsticks, because very few people stop there. They want some other items to go with it. And the breadsticks cost like a penny.

If the % of gross income is 15-18 percent, even when they’re doing half-off specials, then increasing the rate of pay to the workers by 10 percent per worker, won’t even impact your final price at all.

Not even a little bit.

The reason they get away with it is because there is no such thing as asking for a raise. If your company has enough layers of management, nobody you ever speak to actually controls your pay rate. There’s several layers above them, who never have to look you in the eye, who deems that every worker gets paid exactly the same. There is no discussion.

There is no “Market”. The market is dead. The wages are what these managers deem them to be. The available job market is dominated by mega-corporations who all pay the same rate. They agree to pay the same rate, so there’s no competition whatsoever.

You people who believe in the magic of capitalism have swallowed the sleight of hand trickery. There’s no raises, there’s no reward, there’s no merit. You get a slight increase once in a while to partly but not completely offset inflation.

At one time, minimum wage meant you could afford to eat. Now, due to rising costs, it does not.

You folks screeching about this “inflation” seem to have ignored the fact that inflation just keeps right on happening whether wages rise or not. And when inflation happens, and raises don’t, that’s called drowning. The average worker is drowning.

And like the man said, the fact that he is drowning is simply due to corporate greed, nothing more. There is no other underlying force at work.

Look, the economy didn’t collapse when there was such a thing called the Middle Class. In fact, the whole of society benefited from some of the wealth not ending up in the pockets of the super-rich, and actually got distributed around to us little people. Because it led to the entire consumer culture. It made the United States the most prosperous place to be.

You destroy the middle class, you allow wages to stagnate while inflation makes us poorer, and then you don’t have a first world country anymore.

119

Let me give you some real, actual, sink your teeth into this numbers.

3777 in sales.
600 in total labor, including store management.

15.88% Labor.

If I gave literally everyone in the store a 10% raise, labor is now 660.

17.4% Labor.

Now, let me show you why this is fucked up.

Randomly, they will give away the product at half price.

We will make more pizzas, but they will each be worth half of what they should be.

This will cost the store in the neighborhood of 700-1000 dollars per day.

That’s much more than what we spend on labor.

Not only will your prices not increase, they will continue to go down arbitrarily, simply to keep you interested in pizza.

120

Best part is, they could literally be exactly as greedy as they are now, with a 2 percent increase in price to offset the 2 percent increase in labor cost, with 100% of the cost of the wage increase passed onto the consumer, who didn’t even fucking notice it.

Now your pizza is $14.12 with delivery instead of $13.85

Which begs the obvious question:

HOW COMES THE ECONOMY DID NOT COLLAPSED!?! :eek:

If you want, you can take the extra twenty seven cents out of my tip. Don’t spend it all in one place.