All the manufacturing that moved overseas and all the illegal labor that works in the US are illusions. But at least the US can’t outsource burger flipping.
Velocity - while I agree that $10/hour is easy to calculate, you gotta be dry humpin’ me if you think that a minimum wage slave can’t figure out if they work 27.25 hours per week at $13.77/hour what their gross is? From your post, you’d be surprised at how most wage slaves can figure out to the last penny what they are owed.
Not unlike 2nd amendment enthusiasts that become grammar Nazi’s over the comma (or lack thereof) placement when they seemingly kaint spell or sting two words together.
People who get paid minimum wage are the only people who get paid more than their worth. Everyone else gets paid what they are worth or less. Generally there is no “set” legal wage for doctors, policemen, widget makers, teachers, etc… In fact every vocation where people make more than minimum wage could get paid just that but don’t because they are worth more than that.
If you’re at a job and make exactly minimum wage, then you are over paid. Your employer would pay you less, but can’t, it’s illegal. And you’re obviously not worth more than that or you would get more.
The belief that raising the minimum wage doesn’t cause at least some price inflation and some unemployment, but does cause minimum wage workers standard of living to increase is Utopian idiocy at it’s finest.
Sorry, but this is nonsense.
There are endless highly paid professions where I would pay someone less, but I’m not allowed to. Take medical treatment for example. I would happily pay an immigrant Indian dentist to fill my teeth, but I can’t because the government and medical unions dictate who can practice dentistry and what they get paid. The same is true for any other unionised job or any other job where the government dictates who is allowed to work.
And now you are going to argue that a dentist gets paid what they are worth, and a large part of that worth is is the value of having a government approved piece of paper that says that you can work. But that is no different to a minimum wage employee once a law is past determining minimum wage.
If their customers weren’t prepared to pay less, then those laws would be necessary. If a dentist was worth what they get paid, then they would only need to hand a shingle on the door proclaiming their qualifications and people would gladly pay more than they would for Mexican or Indian dentist next door. But of course people don’t, which is why the laws and unions exists in the first place.
Any job that has restrictions on who can work in that job results in people getting paid more than they are worth. If that weren’t the case then the restrictions wouldn’t need to exist. In a market where only the government sets standards on what education people have to have before they can offer a service, that’s not a gauge of what a person is worth. It’s a gauge of how restrictive the legislation is. If you had a truly free market where anybody could offer their services in any job, then we would see how much people are really worth. But that wouldn’t be real pretty for anybody.
You were supposed to use a colon after that sentence, not a period.
The Indian dentist down the street from me makes as much as the dentist whose practice she bought because she had the same piece of paper. And was not worth it, so I left. In fact, since dental prices are usually pretty fixed by the market and insurance, and because not all dentists are equal, some dentists are getting paid more than they are worth and some less.
Does 2008 mean anything to you at all?
His reasoning for that is "it’s the axiomatic right-wing Mantra of Business: we are Job Creators™, so obviously, the more money you give us, in terms of the right to exploit workers, pay lower taxes, and not have to deal with pesky safety and environmental regulations, The More Jobs We Will Create™. :rolleyes:
The problem is that it not only isn’t true, by and large it’s exactly the opposite.
First of all the main thing that happens when corporations make more money is – and this should be no surprise to anyone – they get to keep more money. Hiring and maintaining a labor force is a huge expense and no sane corporation does it just because they have money lying around, they only do it as a direct response to the necessities of growth. For example:
By the end of 2001, in one of the largest cuts recorded on Wall Street until the recent crisis, securities firms had slashed over 116,000 jobs. From 2003 until 2006, when investment banks not only “recovered” through the subprime buildup and surges in M&A activity but also began to post record profits and bonuses, with each year surpassing the previous one, they continued to engage in round after round of layoffs.
Liquidated: An Ethnography of Wall Street, by Karen Ho (2009)
Big layoffs are coming for some big companies. eBay (EBAY) announced that it will layoff 2,400 people, about 7% of its workforce before April. This, after reporting a 10% increase in profits last quarter. American Express (AXP) also says it will cut 4,000 jobs, or 6% of its work force, despite an 11% rise in fourth quarter profits.
According to the Commerce Department, corporate pretax profits jumped by 14 percent in 1995–to a record $600.8 billion. Yet despite strong profits and a growing economy, American corporations laid off more than 400,000 workers during 1995. An additional 230,350 layoffs were announced in the first five months of 1996–a 34 percent increase over the same period last year.
http://www.ctj.org/html/layoffs.htm
Think Tanks on the Right and Left Agree: Corporate Tax Holidays Lead to Layoffs, Not Jobs
Left-leaning Institute for Policy Studies and right-leaning Heritage Foundation release the same report findings on the same day: Corporations that claimed tax holidays in 2004 pocketed the cash and downsized workers.
But when you have a general increase in lower and middle-class earnings, including the effects of a higher minimum wage, you increase consumer spending, increase demand, and actually drive economic growth. Giving billionaires tax breaks is not going to get them to trade in their Chevy a year earlier or buy a new TV, and it’s certainly not going to get them to hire one single person just for the hell of it – what it’s going to do is get them to call up Mossack Fonseca and move another billion to offshore accounts.
The problem is you all look at this in the small value as just an increase of 1 hour of work. You not look at this in the summation. Take the NH wage again going from 7.25 up to the proposed 10. Now let’s look at a fast food joint with the following assumptions:
They are open from 11 AM to 12PM and have crews start an hour early and clean up an hour after work hours. Therefore this is 15 hours of work time per day. There are 4 minimum wage employees per shift. The labor burden is 20% on top of wages. Open 360 days per year. Now let’s do the math.
15 hours per day * 4 Min wage employees per hour * 2.75 per hour * 360 days per year * 1.2 for the labor burden.
15 * 4 * 2.75 * 360 * 1.2 = $ 71,280 per year in increased operating expenses for the owner. If anything for the average fast food place I am thinking I am on the low side. I have no experience in this industry so am making assumptions.
There is more. The cost of the food goes up, plus a lot of other expenses. This is a substantial cost increase. The price of burgers is going to go up and a fair amount.
Noooooooo problem you say. People will still buy the burgers, they will still need 4 min wage employees per place. But that is not the case. Demand will go down due to the higher prices and the industry will shake out till a new equilibrium is reached.
The industry will have a shake out. Some places will go out business and other will change their methods of operations. All these changes will be geared to lower the number of employees needed. Acme Food Machines (or whoever) will come up with the Super Duper Buger Broiler and builder. There go the ones flipping the burgers. You walk in an place your order by tablet. There go the cashiers.
The same will occur in industry after industry. No doubt in my mind your proposal will reduce the number of minimum wage entry jobs where kids can learn the basics of going to work. A sad state IMHO.
The long term effects will not be as you think.
We’re going to take math lessons from you?
If workers are there an hour before opening and an hour after closing, and they are open from 11am to 12pm, that’s not 15 hours of work time per day- it’s 3 hours of work time per day.
Strange that your local fast food places are only open one hour a day. I’m glad I don’t live where you live.
It’s a year when we had >4 million fewer jobs than we do today. What does it mean to you?
This is not necessarily true. Apple products are more expensive than the products of its competitors. And yet it has the largest capitalization of any company in the U.S. Raising prices – in some cases substantially – clearly hasn’t hurt them, mainly because there is a perception among consumers of Apple products’ value and quality.
Now that doesn’t address the issue of whether it’s wise to raise the minimum wage, but the argument that raising wages automatically has adverse economic effects is not valid.
Stats like these are notoriously difficult to prove with certainty since there are multiple factors that come into play.
Minimum wages are good in the sense that they protect the lowest wage workers against abuse, but raising the wage floor as a way of improving economic parity is something I’m much less certain about.
In the short term, a minimum wage increase probably results in an immediate economic stimulus. Workers have more disposable income and go out and spend more, which creates an increase in near-term demand (they’re probably less likely to save than those who earn more).
On the other hand, while they are enjoying their bump in income, the companies who employ them are dealing with an increase in direct labor costs, and there’s also the additional increase in employment taxation. This is where conservatives come in and admonish us about how employers will simply pass on the costs to consumers. However, they’re not always in a position to do that without consequence.
Employers might have to eat those costs…which is actually the real danger. Some employers might not be well-equipped to eat those costs, but in any case, all employers will be looking to find ways to eliminate those costs and to improve efficiency. The result is an increase in automation and efficiency.
As lower-end labor becomes more expensive, the longer-term result is that the employers will retain those workers who can do more with less. Instead of two or three workers managing a kiosk; you’ll have one. And that one will be doing a lot more work for his marginal bump in pay.
A small and incremental minimum wage hike might be easily digested by our economic growth, but I am deeply skeptical of the idea of raising it to $15 an hour. It might work for some, but those workers who are now just barely participating in the economy are going to get squeezed. Those who will become the new wage floor will be over-worked.
The minimum wage is a blunt and difficult to wield economic instrument, mainly because the government is forcing the private sector to guarantee a minimum standard of living, which is something businesses should not be in the business of trying to address. What I’d rather see is a minimum salary for all paid out in the form of single, simpler publicly funded transfers. If we as a society are interested in maintaining a basic standard of living, then this ought to originate from the public sector, not private enterprise.
The National Employment Law Project has a summary report here: The Growing Movement for $15 - National Employment Law Project
That’s a landing page that in turn links to a 40-page PDF report. For those of you on a device where that may be cumbersome, Fortune has a pretty neutral summary: Who makes less than $15 per hour, in 3 charts | Fortune
I haven’t verified their sources or methodology. But in summary, 42% of workers earn under $15/h. That number is higher for women and minorities. They also have breakdowns for different types of jobs.
The report also includes summaries of literature on the relevant elasticities some posters have been trying to discuss.
Maybe I’m a lousy businessman, but for a few years I had an uneccesary employee who was making minimum wage. Having them smoothed things out, but was a luxury. When minimum wage went up to what it is now, I looked at what that job was costing me.
Coincidentally, that employee was going back to school, so I decided against refilling her position.
So you think there is an acceptable rate increase in prices and unemployment? How did you arrive at that number?
I’m not saying there isn’t some staff trimming that could be done, but in the vast majority of cases those making minimum wage are working their asses off.
The battle isn’t about economic theory, it’s about power. Those that have it exploit those who don’t. The elite and their cooperative stooges would have us compete in a race to the bottom with slave labor in Asia.
This isn’t happening.
Only because Republicans have opposition and aren’t able to eliminate minimum wage and destroy the safety net.
Are you claiming that they aren’t trying to get rid of the minimum wage?