# The Nahployment 'Crisis' **URL:** \ **Category:** In My Humble Opinion\ **Created:** [April 30, 2021, 7:07pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117 "2021-04-30T19:07:24Z")\ **Posts on this page:** 20\ **Page:** 20
**Author:** ![Odesio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/odesio/32/20003_2.png) [@Odesio](https://boards.straightdope.com/u/Odesio)\ **Post date:** [May 7, 2021, 8:27pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/382 "2021-05-07T20:27:26Z")
> [@bump](#): > > And really… the folks saying that if companies are paying more than minimum for certain jobs right now, then reducing the minimum wage isn’t going to affect them much are right. I actually think raising the minimum wage will end up raising the hourly wage of a lot of workers who make more than the minimum. The minimum wage here in Arkansas is $11.00 an hour and the lowest entry level positions at my company start at around $16.00 per hour. Right now, we’re not really fishing from the same candidate pool as McDonald’s to fill those positions. If the minimum wage were $15.00 then we’d likely have to raise the hourly wage in order to attract the quality of candidates we’d like. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 7, 2021, 8:33pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/383 "2021-05-07T20:33:22Z")
Raising it? Definitely. But if some kind of mass delusion hit, and we moved it down to $5 for some insane reason, the jobs that already are paying say… $7.75 wouldn’t be much affected. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 7, 2021, 8:46pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/384 "2021-05-07T20:46:56Z")
> [@RickJay](#): > > The percentage of workers who make minimum wage isn’t _that_ great; the price difference affects everyone. We aren’t just talking about people who make MW, we are talking about the people who make less than the new MW. That’s a much higher percentage of workers. > [@RickJay](#): > > I’m shocked that wasn’t self evident but maybe I should have spelled it out already; of course McDonald’s is up against competition. Well, you asked why McD’s doesn’t just raise the price of their burgers as if you were not taking into account the fact that they have competition. Do you agree that the fact that they have competition is one of the primary reasons that they don’t raise their prices? The reason that McD’s and Burger King and Wendy’s don’t raise their prices all together is because cartels like that are both unstable _and_ illegal. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 7, 2021, 8:48pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/385 "2021-05-07T20:48:58Z")
Why wouldn’t it? New highers would be put in at that lower wage, and those making more would be pushed out. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 7, 2021, 8:51pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/386 "2021-05-07T20:51:47Z")
Presumably if they’re already paying $7.75 instead of some lower number, say $7.25, they’re not able to get the desired employees at anything less to work those jobs. I mean, why aren’t they just already bringing in new hires at 7.25 and pushing out the 7.75 people by your description? Whatever reason that is, is why their wages wouldn’t drop. ---
**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, 2021, 9:49pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/387 "2021-05-07T21:49:51Z")
> [@Odesio](#): > > If the minimum wage were $15.00 then we’d likely have to raise the hourly wage in order to attract the quality of candidates we’d like Yes, but probably not by the same amount the MW rose. I’ve seen starting wages (way, way above MW) go up much faster than average raises. Why don’t people quit and get a new and better starting wage? Inertia. Being uncomfortable with change. Lots of reasons, many of them good. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [May 7, 2021, 10:36pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/388 "2021-05-07T22:36:26Z")
> [@Wrenching\_Spanners](#): > > However, if the New Zealand government had chosen to raise your employee’s wages by 82% (that’s the figure from the JohnT model discussing wage costing much earlier in the thread), do you think it would have had an adverse effect on your business? …did you not read my post? Wages are just a cost of doing business. I can do very little about the legislative process except vote for another government or pay a lobbyist to do some lobbying. And in the real world that I live in there isn’t going to be an increase of 82% in the minimum wage overnight. Because in the real world that I live in the minimum wage increased from $18.90 to $20.00 on April the 1st, our minimum wage has been increasing regularly here to match inflation. You can see that here. > **[Previous minimum wage rates](https://www.employment.govt.nz/hours-and-wages/pay/minimum-wage/previous-rates/)** > > Minimum wage rates from previous years. In 2009 the minimum wage here in NZ was $12.50. 11 years later it is $20.00. In 2009 the federal minimum wage in the USA was $7.25. 11 years later **it is still $7.25.** Can you not see the difference? Do you not understand the scale of the problem? We aren’t going to see an increase of 82% happen here in NZ. Nobody is advocating for an increase of 82%. But in the United States? Things have gotten so out-of-whack that in over-correction is required. 82% isn’t out of line at all. Add to that the fact that restaurant employees can be paid **under** the minimum wage with the assumption that employers will top the wage up if the employee doesn’t make the minimum in tips (some employers don’t do this). Add to this the ever-increasing disparity between what the executives make and what the typical employee makes which has grown by 940% since 1979. Add to that private equity firms that are literally sucking the life out of formerly profitable businesses. > **[What is private equity, and why is it killing everything you love?](https://www.vox.com/the-goods/2020/1/6/21024740/private-equity-taylor-swift-toys-r-us-elizabeth-warren)** > > Private equity led to the closing of Toys R Us and cost 30,000 workers their jobs — and it’s hardly the only example of a deal gone wrong. You can’t look at this in a vacuum. Wages are just a cost of doing business. And if government mandates an increase in wages then business just has to figure out how to do it. For the bigger corporations they can do this without batting an eyelid and probably marginal price increases, if at all. For smaller businesses it will be tougher. But that’s the reality of running a small business. If you want to succeed then you have to adapt. Maintaining the federal minimum wage at the same rate as it was eleven years ago is simply unsustainable. > [@Wrenching\_Spanners](#): > > if the wage increase raised your total cost by 20%, do you think you could have raised the prices of your traditional services to your customers by 20% without some of them ceasing to do business with you? Or to be more realistic, suppose you had a mandated 10% increase in wages that resulted in a 3% overall increase in costs. Would that have zero effect on your business because you’d simply pass those costs on to your customers? I’m guessing you’d have lower profits for a while and gradually increase prices in the long term. But if you could instantly increase your prices and pass on the cost to your customers, could you explain your business model and why you weren’t charging more in the first place? This is “paralysis by analysis” style thinking. You are over-thinking it all. Right now I typically charge by the project and what I charge ultimately depends on how my client’s usage. But even in my hospitality days we wouldn’t be over-thinking this. You either absorb the wage increase, or you raise your prices, or you diversify your service and product range. You just deal with it. But how it works here and how it would work in the US though are two different things. In the US things have been massively distorted. We shouldn’t pretend that the process of correcting that distortion won’t eventually have an impact on pricing in some sectors, at some level. But sometimes you just have to pull the bandage off. Things simply can’t continue as they have. You can’t allow millions of people to continue to be left behind because eventually they will simply say “enough is enough.” ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [May 7, 2021, 10:45pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/389 "2021-05-07T22:45:39Z")
They _are_ saying ‘enough is enough’, hence this thread. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [May 7, 2021, 11:13pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/390 "2021-05-07T23:13:38Z")
…when the people are at the stage where “enough is enough” then you are at the stage of nationwide strikes and walk outs. You aren’t at that point yet. Not even close. Amazon workers can’t even get enough traction to unionize. They aren’t yelling “enough is enough” because the anti-worker propaganda machine is so strong in the USA that it shuts most of this down. So if it ever gets to the point where workers are walking off the job in wild-cat strikes or actions then you will see the anti-worker machine ramp up at the same time proportionately. And that would be uglier than most could imagine. You aren’t close to that yet. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 7, 2021, 11:20pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/391 "2021-05-07T23:20:26Z")
> [@Banquet\_Bear](#): > > So if it ever gets to the point where workers are walking off the job in wild-cat strikes There was some action from 2012-2015 in the fast food industry, which really put the whole fight for $15 in the national spotlight. ~Max ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [May 8, 2021, 12:10am UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/392 "2021-05-08T00:10:32Z")
> [@k9bfriender](#): > > We aren’t just talking about people who make MW, we are talking about the people who make less than the new MW. That’s a much higher percentage of workers. So four or five percent, not two? It’s a small percentage of workers. You can’t win back a wage increase by raising prices _on the same people._ The “prices will go up to make up for the wage increase” is not going to happen. Prices will go up if the equilibrium price goes up. > [@k9bfriender](#): > > The reason that McD’s and Burger King and Wendy’s don’t raise their prices all together is because cartels like that are both unstable _and_ illegal. You do know their prices have gone up before, though, right? And pretty much at the same rates? You can’t get a cheeseburger for a quarter anymore. As the profit-maximizing prices goes up, the prices go up. You’re confusing collusion with ordinary, everyday price increases that naturally follow inflation and market forces. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [May 8, 2021, 1:57am UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/393 "2021-05-08T01:57:01Z")
> [@RickJay](#): > > So four or five percent, not two? It’s a small percentage of workers. What level of MW are you positing? For example, in 2019 [about twenty-eight percent](https://www.washingtonpost.com/business/2021/03/03/15-minimum-wage-black-hispanic-women/) of American workers earned less than $15/hour. In some particularly low-wage areas of the country, _median_ wage isn’t much higher: only [$15.73/hour in Mississippi](https://www.bls.gov/oes/current/oes_ms.htm), to name one. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [May 8, 2021, 2:01am UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/394 "2021-05-08T02:01:46Z")
Wow, a conservative slaver State would be most impacted by a MW increase? Me, upon finding out this news: [![Imgur](https://live.staticflickr.com/65535/51165253854_fdc7df4da9_b.jpg "Bitmoji shock") ](https://www.flickr.com/photos/68782016@N08/51165253854/) No, wait, that’s not how I reacted. ---
**Author:** ![HelenGawn](https://avatars.discourse-cdn.com/v4/letter/h/a88e4f/32.png) [@HelenGawn](https://boards.straightdope.com/u/HelenGawn)\ **Post date:** [May 8, 2021, 2:22am UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/395 "2021-05-08T02:22:32Z")
Man, there’s a huge opportunity here for a group of friends who drive Uber _and_ Lyft. ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [May 8, 2021, 4:55am UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/396 "2021-05-08T04:55:10Z")
> [@bump](#): > > You make it sound like it’s a bad thing for companies (and prospective employees) to know what the going rate is for a given job in a given market. That’s all that is, not some sinister plot to screw workers. WalMart and Amazon are the two largest employers in the US. You don’t think that having TWO notably anti-union and living wage resistant companies sitting on top of the heap makes a big difference in overall wages? They don’t need to collude openly, they just need to be assholes who refuse to pay a living wage, furnish benefits and give PTO to their employees and hey presto, monopsony in employment in action. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 8, 2021, 12:42pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/397 "2021-05-08T12:42:13Z")
Great OP, @JohnT . I’m still reading through the thread. Reading the news this morning, I saw this article that looks relevant, and reinforces what you and others have written: > **[Analysis | It’s not a ‘labor shortage.’ It’s a great reassessment of work in...](https://www.washingtonpost.com/business/2021/05/07/jobs-report-labor-shortage-analysis/)** > > Hiring was much weaker than expected in April. Wall Street thinks it’s a blip, but there could be much deeper rethinking going on of what jobs are needed and what workers want to do on a daily basis. > A Pew Research Center survey this year found that [66 percent](https://www.pewresearch.org/fact-tank/2021/02/10/unemployed-americans-are-feeling-the-emotional-strain-of-job-loss-most-have-considered-changing-occupations/)of the unemployed had “seriously considered” changing their field of work, a far greater percentage than during the Great Recession. People who used to work in restaurants or travel are finding higher-paying jobs in warehouses or real estate, for example. Or they want to a job that is more stable and less likely to be exposed to the coronavirus — or any other deadly virus down the road. Consider that grocery stores shed over 49,000 workers in April and nursing care facilities lost nearly 20,000. The linked Pew poll looks interesting too but I’ve only skimmed it this far. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 8, 2021, 1:30pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/398 "2021-05-08T13:30:28Z")
> [@RickJay](#): > > So four or five percent, not two? It’s a small percentage of workers. You can’t win back a wage increase by raising prices _on the same people._ It’s not a small percent of workers. It’s about a quarter of workers. And it will also raise the pay of those who are making a bit over MW. > [@RickJay](#): > > The “prices will go up to make up for the wage increase” is not going to happen. Prices will go up if the equilibrium price goes up. And the wage increase would increase the equilibrium price. > [@RickJay](#): > > You do know their prices have gone up before, though, right? And pretty much at the same rates? You can’t get a cheeseburger for a quarter anymore. As the profit-maximizing prices goes up, the prices go up. You’re confusing collusion with ordinary, everyday price increases that naturally follow inflation and market forces. I really don’t think I am. I was responding to your question as to why McD’s doesn’t unilaterally increase their prices. You have chosen to take it down a tangent that it irrelevant to the answer to the question that you posed. ---
**Author:** ![Ann\_Hedonia](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ann_hedonia/32/319_2.png) [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)\ **Post date:** [May 8, 2021, 2:02pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/399 "2021-05-08T14:02:56Z")
Funny how conservatives weren’t clutching their pearls about how increased operational costs would drive fast food restaurants out of business when the increased operational costs were the result of Trump’s retaliatory tariffs. > **[us%20-%20china%20trade%20implications%20final.pdf](https://www.supplychainscene.org/sites/default/files/inline-files/us%20-%20china%20trade%20implications%20final.pdf)** > > 466.17 KB And the fast food industry survived it just fine… ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 8, 2021, 3:35pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/400 "2021-05-08T15:35:42Z")
> [@Ruken](#): > > I’m still reading through the thread. And done. I didn’t see (or missed) any values for the fast food elasticity. The first google scholar result says: > Price elasticities for foods and nonalcoholic beverages ranged from 0.27 to 0.81 (absolute values), with food away from home, soft drinks, juice, and meats being most responsive to price changes (0.7–0.8). The authors were focusing more on health outcomes. [https://doi.org/10.2105/AJPH.2008.151415](https://doi.org/10.2105/AJPH.2008.151415) ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [May 8, 2021, 6:32pm UTC](https://boards.straightdope.com/t/the-nahployment-crisis/941117/401 "2021-05-08T18:32:39Z")
> [@k9bfriender](#): > > And the wage increase would increase the equilibrium price. It might a little, or it might not; the effect of such things can be unpredictable. What if low income workers making more money means they eat more healthy food? Will this reduce the demand for greasy garbage? It’s not impossible. What IS true is “50% minimum wage hike means 50% more expensive Whoppers” is utter tripe. [Previous page](https://boards.straightdope.com/t/the-nahployment-crisis/941117.md?page=19) [Next page](https://boards.straightdope.com/t/the-nahployment-crisis/941117.md?page=21)