# The virtues of a $10/hour minimum wage **URL:** \ **Category:** Great Debates\ **Created:** [April 24, 2016, 8:40pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021 "2016-04-24T20:40:54Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![DrCube](https://avatars.discourse-cdn.com/v4/letter/d/a3d4f5/32.png) [@DrCube](https://boards.straightdope.com/u/DrCube)\ **Post date:** [April 26, 2016, 4:03pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/101 "2016-04-26T16:03:31Z")
> [@Damuri\_Ajashi](#): > > The reason those jobs that are not worth $10 anymore is because there are machines that do it. They didn’t invent machines to do it because the work was worth less than $10/hour. > > The notion that things are not worth $10 because we can do it ourselves is pretty ridiculous. The fact that we bus our own trays at McDonalds doesn’t mean that bussing tables is worth less than $10/hour. If people will do it for free, it is _definitely_ worth less than $10/hr. If machines can do it for less than $10/hr, then when humans do the same labor, it is _definitely_ worth less than $10/hr. How can you claim otherwise, without creating some special definition of “worth” that is different from what everyone else means by that word? Remember, we’re talking about the value of their labor on the labor market, which is objective and quantitative, not their intrinsic worth as a person, which is subjective and qualitative. > [@Damuri\_Ajashi](#): > > The existence of the minimum wage did not create a situation where heads of households are making minimum wage. Perhaps, but it didn’t really help, either. MW is like sticking your finger in the dyke when the water is rushing over the top. The problem is that we live in a world where people lack skills that employers value. Not just uneducated and lazy people, but high school graduates and people with college degrees who work their asses off just can’t compete with a machine or a pennies a day sweatshop worker in Cambodia. And forcing people to pay their lowest paid employees more is like saying “let them eat cake”. It illustrates a fairly naive view of what is actually happening. The problem isn’t that heads of households who earn minimum wage aren’t making enough, it’s the fact that there are heads of households _earning minimum wage at all_. And raising the MW isn’t going to fix that problem, only exacerbate it. ---
**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:** [April 26, 2016, 4:20pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/102 "2016-04-26T16:20:13Z")
> [@spamforbrains](#): > > actually, wages are often the major costs of a company (75 to 90% of their expenses), > [@andros](#): > > Good lord, I certainly hope not. Certainly this is never the case in the hospitality and food service industries. Gotta cite? [This](http://smallbusiness.chron.com/percentage-business-overhead-should-payroll-66492.html) has some relevant data (Emphasis added): > [@](#): > > **Industry Comparison** > > In a 2007 survey, the U.S. Census Bureau reports that child daycare services have the highest payroll costs of 50.77 percent. The following represents payroll costs for other businesses: physician offices, 46.19 percent; legal services, 45.03 percent; software publishers, 42.98 percent; accounting, tax preparation and payroll services, 42.35 percent; restaurants, 27.30 percent; building services, 25.34 percent; bars, 19.51 percent; and clothing stores, 16.49 percent. The Society for Human Resources Management reported in 2008 that healthcare services had the highest salary payroll cost of 52 percent. For-profit and educational services were second, with 50 percent. Third were durable goods manufacturing and construction and mining industries, with 22 percent. Retail had the lowest payroll overhead of 18 percent. ---
**Author:** ![Eonwe](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eonwe/32/240_2.png) [@Eonwe](https://boards.straightdope.com/u/Eonwe)\ **Post date:** [April 26, 2016, 4:24pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/103 "2016-04-26T16:24:51Z")
> [@DrCube](#): > > The problem is that we live in a world where people lack skills that employers value. Not just uneducated and lazy people, but high school graduates and people with college degrees who work their asses off just can’t compete with a machine or a pennies a day sweatshop worker in Cambodia. Or, the problem is that the health and well-being of people and families has become more directly and universally tied to their value to employers at the same time that employers place less and less value on jobs at the bottom end of the income spectrum. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [April 26, 2016, 4:27pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/104 "2016-04-26T16:27:30Z")
> [@John\_Mace](#): > > [This](http://smallbusiness.chron.com/percentage-business-overhead-should-payroll-66492.html) has some relevant data (Emphasis added): > [@](#): > > Retail had the lowest payroll overhead of 18 percent. They must have excluded agriculture, [with a labor cost of 10%](http://www.nytimes.com/roomfordebate/2011/08/17/could-farms-survive-without-illegal-labor/the-costs-and-benefits-of-a-raise-for-field-workers) ---
**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:** [April 26, 2016, 4:30pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/105 "2016-04-26T16:30:33Z")
> [@Fear\_Itself](#): > > They must have excluded agriculture, [with a labor cost of 10%](http://www.nytimes.com/roomfordebate/2011/08/17/could-farms-survive-without-illegal-labor/the-costs-and-benefits-of-a-raise-for-field-workers) Can’t say this is the reason for sure, but one often hears about “non-agriculture payroll”, so there must be a reason in some instances for ignoring that sector. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [April 26, 2016, 5:12pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/106 "2016-04-26T17:12:35Z")
I’ve heard that too. Commercial fishing is also excluded. I have never understood why. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [April 26, 2016, 5:15pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/107 "2016-04-26T17:15:41Z")
> [@John\_Mace](#): > > Can’t say this is the reason for sure, but one often hears about “non-agriculture payroll”, so there must be a reason in some instances for ignoring that sector. No, **Fear Itself** just appears to be confused. Maybe just looking at farm labor as a percent of some retail product price instead of farm revenue. ---
**Author:** ![kayaker](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kayaker/32/441_2.png) [@kayaker](https://boards.straightdope.com/u/kayaker)\ **Post date:** [April 26, 2016, 5:22pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/108 "2016-04-26T17:22:53Z")
> [@Fear\_Itself](#): > > I’ve heard that too. Commercial fishing is also excluded. I have never understood why. Agriculture and commercial fishing jobs are exempt from overtime laws, I think. ---
**Author:** ![spamforbrains](https://avatars.discourse-cdn.com/v4/letter/s/e274bd/32.png) [@spamforbrains](https://boards.straightdope.com/u/spamforbrains)\ **Post date:** [April 26, 2016, 5:46pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/109 "2016-04-26T17:46:52Z")
> [@](#): > > Quote: > Originally Posted by spamforbrains View Post > actually, wages are often the major costs of a company (75 to 90% of their expenses), > > Quote: > Originally Posted by andros View Post > Good lord, I certainly hope not. Certainly this is never the case in the hospitality and food service industries. Gotta cite? In the industry I work in, which is apparently not large enough to be considered in government surveys, labor costs are around 90% of the company’s costs. Other than people, the only other thing the company pays for is a few computers and electricity. The company I used to work for claimed wages were 70% of their costs; most of the rest went to the mortgage and maintenance on the building. Nobody gets minimum wage in these industries, though, so perhaps it is not really relevant to this discussion. How does the government come up with those poverty levels? Here it’s pretty cheap to live, and a cheap apartment will only cost $5000 a year in rent. Which if you make $11,000 a year leaves you a $100 a week to spend on food, transportation, clothing, and other necessities. So you could live on $11,000 a year here. There are a lot of illegal immigrants who get paid less than minimum wage and seem to manage to scrape by. If they increase the minimum wage to $15/hr, I think many more businesses will turn to illegal labor. However, where I used to live, housing was very expensive. Even the cheapest, tiniest, dump of a place would cost at least $12,000 a year in rent. If you only made the $11,000 poverty level, you’d be homeless. ---
**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:** [April 26, 2016, 5:52pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/110 "2016-04-26T17:52:24Z")
> [@spamforbrains](#): > > In the industry I work in, which is apparently not large enough to be considered in government surveys, labor costs are around 90% of the company’s costs. I would still need to see a cite for that. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [April 26, 2016, 5:55pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/111 "2016-04-26T17:55:02Z")
> [@Velocity](#): > > Third, it wouldn’t drive up unemployment, or raise product prices, as much as a $15/hour minimum wage . . . . . . [wouldn’t](http://www.salon.com/2016/04/26/one_of_the_most_popular_arguments_against_raising_the_minimum_wage_is_getting_demolished/). ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [April 26, 2016, 6:12pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/112 "2016-04-26T18:12:16Z")
> [@Velocity](#): > > Third, it wouldn’t drive up unemployment, or raise product prices, as much as a $15/hour minimum wage would. Do I understand this correctly: you believe that minimum wage hikes will drive up unemployment and raise product prices, but you support it anyways? Why? ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [April 26, 2016, 6:14pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/113 "2016-04-26T18:14:21Z")
> [@John\_Mace](#): > > Can’t say this is the reason for sure, but one often hears about “non-agriculture payroll”, so there must be a reason in some instances for ignoring that sector. Usually I see that in unemployment statistics, and I think that’s because they’re highly seasonal. ---
**Author:** ![brickbacon](https://avatars.discourse-cdn.com/v4/letter/b/898d66/32.png) [@brickbacon](https://boards.straightdope.com/u/brickbacon)\ **Post date:** [April 26, 2016, 6:29pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/114 "2016-04-26T18:29:55Z")
> [@puddleglum](#): > > Labor and automation are substitutes for each other. The marginal amount of automation purchased depends on the price of labor. The people making self serve ordering systems for fast food restaurants will sell a certain amount when labor is $10/ hour, more at $15/hr, and less at $3/hr. As long as the food gets ordered it doesn’t matter to corporate whether a cashier or a robot is doing it. However, it matters a whole lot to the cashier. Dude, I don’t need a lecture on automation, particularly one that adds absolutely nothing to the discussion. Not to mention that the marginal amount of automation purchased depends on the price of labor and the _value_ of that labor. This is why there are still waiters and cashiers despite there being automated solutions that are much cheaper. The value proposition still doesn’t make sense in many cases because a robot is not a human. > [@bump](#): > > Sure, but what I was getting at is when there’s a 33% increase in your labor costs overnight… But these increases are almost never overnight. For example, in CA, minimum wage won’t reach $15/hour until 2020 or 2021. > [@bump](#): > > companies start casting around for ways to decrease that with a whole lot more vigor than just trying to squeeze a little more profit out of an already profitable venture. Yes, but the data is not really clear on when those behaviors become a net negative for society. That’s the crux of the issue. If $10/hour only means a few lost jobs that were crappy anyway, and it provides millions of people with a better life where they don’t have to rely on charity and government handouts, then we all benefit. If it means tons of businesses fold, then obviously we might be worse off. It’s really hard to guess what will happen, but most of the data I’ve seen seems to support the idea that raising it to around $10/hour will be fine. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [April 26, 2016, 6:53pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/115 "2016-04-26T18:53:42Z")
> [@DrCube](#): > > If people will do it for free, it is _definitely_ worth less than $10/hr. If machines can do it for less than $10/hr, then when humans do the same labor, it is _definitely_ worth less than $10/hr. How can you claim otherwise, without creating some special definition of “worth” that is different from what everyone else means by that word? My point is that these things were worth more before the machines showed up and made the particular task cheaper. With that said, machines dispense money and we still have bank tellers that dispense money. Machines can do my check out at the grocery and yet we still have cashiers. > [@](#): > > Remember, we’re talking about the value of their labor on the labor market, which is objective and quantitative, not their intrinsic worth as a person, which is subjective and qualitative. I don’t think you can separate the two unless you have something like a basic universal income. > [@](#): > > Perhaps, but it didn’t really help, either. MW is like sticking your finger in the dyke when the water is rushing over the top. The problem is that we live in a world where people lack skills that employers value. Not just uneducated and lazy people, but high school graduates and people with college degrees who work their asses off just can’t compete with a machine or a pennies a day sweatshop worker in Cambodia. Our current minimum wage is notably lower on an inflation adjusted basis than minimum wage during the 1950’s. And of course I agree that our labor is overpriced if compared to labor in a poor underdeveloped country with no health, safety or environmental regulations where the median income is less than $1/hour. Dropping the minimum wage isn’t going to fix that. And a basic income is not sustainable if we have to let Cambodia compete directly with our labor. > [@](#): > > And forcing people to pay their lowest paid employees more is like saying “let them eat cake”. It illustrates a fairly naive view of what is actually happening. The problem isn’t that heads of households who earn minimum wage aren’t making enough, it’s the fact that there are heads of households _earning minimum wage at all_. And raising the MW isn’t going to fix that problem, only exacerbate it. There is little we can do to change heads of households making minimum wage short of protectionism. By global standards, EVERYONE in the USA is overpaid. Our doctors make too much, our lawyers make too much, our fast food workers make too much. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [April 26, 2016, 7:11pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/116 "2016-04-26T19:11:02Z")
> [@BrainGlutton](#): > > . . . [wouldn’t](http://www.salon.com/2016/04/26/one_of_the_most_popular_arguments_against_raising_the_minimum_wage_is_getting_demolished/). This is at least some evidence that a higher minimum wage won’t trigger ragnorok and throw us into a mad max style dystopian futurescape. Its all in the details. But generally speaking I prefer a strong labor movement to a higher minimum wage. The minimum wage argument has become a very poor substitute for a strong labor movement. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [April 26, 2016, 7:20pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/117 "2016-04-26T19:20:42Z")
> [@John\_Mace](#): > > I would still need to see a cite for that. I can’t publish the data as it is confidential, but the software company I was VP Operations of (including finance) often had over 80% of costs going to salary and benefits. We had nobody earning anywhere near minimum wage. ---
**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:** [April 26, 2016, 7:24pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/118 "2016-04-26T19:24:41Z")
> [@amarone](#): > > I can’t publish the data as it is confidential, but the software company I was VP Operations of (including finance) often had over 80% of costs going to salary and benefits. We had nobody earning anywhere near minimum wage. You paid them so little that it wasn’t even close to MW? 😃 ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [April 26, 2016, 7:28pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/119 "2016-04-26T19:28:04Z")
> [@John\_Mace](#): > > You paid them so little that it wasn’t even close to MW? 😃 Well, it was the hours we made them work - exempt employees and all that. 🙂 ---
**Author:** ![andros](https://avatars.discourse-cdn.com/v4/letter/a/e480ec/32.png) [@andros](https://boards.straightdope.com/u/andros)\ **Post date:** [April 26, 2016, 7:44pm UTC](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021/120 "2016-04-26T19:44:49Z")
> [@amarone](#): > > I can’t publish the data as it is confidential, but the software company I was VP Operations of (including finance) often had over 80% of costs going to salary and benefits. We had nobody earning anywhere near minimum wage. Yeah, there are certainly fields in which labor is well over half, and sometimes a massive percentage, of total costs. Accounting, software development, sales, customer service are among them. They do not, to the best of my understanding, constitute a substantial portion of the labor market, nor do they generally staff at minimum wage (certainly excepting call centers and telemarketing slavepits). Hate to beat a dead horse, but I just think **spamforbrains** ’ argument fails here. [Previous page](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021.md?page=5) [Next page](https://boards.straightdope.com/t/the-virtues-of-a-10-hour-minimum-wage/753021.md?page=7)