Minimum wage: $15 NOW!; or 15... eventually
 

Today the Mayor, Ed Murray, signed into law a bill passed unanimously by the city council yesterday that raises the minimum wage in the City of Seattle to $15 / hour.

This is a big deal, it is estimated that 100,000 people in Seattle make less than $15/hour. There was tremendous political exertion by all parties starting at the beginning of the year to make this happen. There are lots of details, like when, how fast, what's included, etc etc, which I'll cover tomorrow.

Meanwhile I gave a link to several good news stories on the subject, here's one that I found particularly helpful in conveying the tone of the months-long debate.

I hope it works out a well as they hope it will.

It won't. Econ 101. It's been proven thousands of times all over the world that you can't vote yourself prosperity. The supply curve still operates the same, around the world, no matter what a city council may believe.

Every time someone makes an argument for this, ask yourself, why not $20? Why not $25? Ask yourself, how did central planning work in the old USSR? How has it worked since it was ended in China?

I ask myself as an employee, am I generating enough revenue to justify my salary? Because there is nothing else this comes down to, and if employees are not generating that, there are three choices: either you're fired, your hours are cut back, or the business closes. There literally are no other choices.

So, what's employment in Seattle today? Lower than the national average. That's a good starting point for this kind of project. Historically, higher minimum wages result in a rise in unemployment. That's what is expected from the supply curve. Let's see what happens in five years. I expect it to be up about 2-3 points and I expect city tax revenues will be down. Good luck to the poor, who will be the first and the worst affected by this. If I turn out to be wrong I will happily admit it.

I thought that employee productivity is up in the US and company profits were also up. But wages are not also rising because unemployment is so high, companies don't have to increase wages to retain their employees. The teeming masses of unemployed waiting to get their foot in the door is enough to keep workers from leaving a low paying job.

So how do you convince companies who are sitting on piles of cash to share that cash with the workers? Either through new jobs or higher wages? Companies will always hold on to profits and not share them if they can get away with it.

Reminds me of how the Republicans have long chanted that small businesses are the job creators, but that's a fallacy. It's consumers who are the job creators. If demand goes up, businesses have to hire to meet that demand. They don't hire more and pay more just because they are good guys. If they have a huge profit, they are going to keep that profit if they can. They only create new jobs if they can't meet current demand. They have no choice but to hire. And they will never give a raise unless they are afraid they will lose their employees. And they aren't afraid right now because there are so many willing to jump in and fill the spot of the current employees.

A minimum wage takes some of the power from the companies and gives it to the workers.

Some small businesses may be on such shaky ground that they have to do layoffs, but I bet most will be fine. And the large ones will have no problem.

There will be a small increase in inflation because of this. Probably seen in the apartment rental market the most. (Because that's local and a finite resource.)

The real problem isn't that minimum wage needs to be raised, that won't do anything to address disproportionate wealth.

CEOs make from 10 to 422 times the median worker's pay
http://www.payscale.com/data-package...come/full-list

It's essentially a Ponzi scheme, the current idea that executives can make as much money as they can while paying employees as little as they can. Just like growing corn over and over on the same plot of ground without replenishing the soil will lead to a dust bowl.

I still maintain this is a backlash from Dr. Spock's scheduled feeding myth rather than nursing on demand.

http://www.huffingtonpost.com/2014/0...n_4748066.html

Winner Winner chicken dinner

great NYT piece
http://opinionator.blogs.nytimes.com...e-the-pay-gap/

If you were aiming for CEO salaries with minimum wage increases, you have just shot your friend in the face. This affects small business and government just as much as big business.

Let us know how the prices of hamburgers react to that $15/hr minimum wage...get those sperm-covered $1 McChickens while you can...

If you want real money you need a bullshit job.

Let's say I own and run 'Quirk's Books' (my business, my property).

If I wanna pay a buck an hour, can't see how that's any one's concern (exceptin' for me and the person who takes the buck per hour job).

If I wanna pay 50 bucks an hour can't see how that's any one's concern (exceptin' for me and the person who takes the 50 bucks per hour job).

As the owner: seems to me I ought to be the one determining the value of any job I need done.

If I value poorly, then I'll have no employees (or, what I have will be for shit).

If I over-value, then my business suffers by way of my misuse of cash.

If I'm wise, then I pay what my lil economy can bear.

If I'm unwise then -- one way or another -- I go out of business.

Not seein' the need for mandated wages.

The great strength of humans over other animals is that we share our wisdom, and try not to let the unwisdom of some take down the efforts of others. Enron, for example: yes, their unwisdom did eventually put them out of business, as the system says must happen. It also, however took down thousands upon thousands of innocent individuals who never made any of the unwise decisions that killed their employer.

The system as you describe it does work, but is unnecessarily brutal. If the lessons of the past are lost, your system is a valid backup. But we are stronger as a whole when we take what we've learned in the past and use it to mildly regulate the unwise individuals who crop up in the present.

I agree with HQ but for slightly different reasons. Raising the minimum wage won't change income disparity as long as Quirk's books wants to make X* his employee's minimum wage. As one goes up so will the other.

If a certain group of people want all the marbles then the number of possible marble games drops to *ahem* 1%.

:D

A guy who makes 365 times what his 50k/yr employee makes doesn't buy 365 times more groceries, cars, beds, shoes, and so forth. He stockpiles money and doesn't stimulate the economy.

If he could be contented with making 20 times his 50k/yr employee then he could hire 340 more employees or double the pay of 680 his 25k/yr employees and they for certain would spend the shit out of that money and that would help the economy.

Ultimately you can't legislate for morality or against greed, if you could no one would try to find loopholes.

But pulling a Dick Cheney is another choice.;)

If there were standards, like* "income over $500k" or "businesses with more than 30 employees" it wouldn't screw the little guy.

* to be determined by experts later

Leads to a return to feudalism. And that's OK. Feudalism lead to the French Revolution.

One pundit suggested, in the case of Seattle, it may displace the poor as over qualified people suddenly find it worthwhile to work a low-level job in town. The poor are forced to commute to the burbs as that is where the low-level jobs for poor people are.

...and the person who found a book they want to buy, but, it costs a thousand dollars, so you can afford to pay that worthless book shelver $50/hr.

"It also, however took down thousands upon thousands of innocent individuals who never made any of the unwise decisions that killed their employer."

If a body can't or won't self-employ and therefore works for others, then a body should cling to the idea of 'employee beware' (or, 'cover your own ass', or, 'keep one eye open all the time').

To assume your employer is honest or wise or simply a good business person is foolish.

Seems to me: an employee should always expect to be screwed over by the boss.

#

"we share our wisdom"

Wisdom unfortunately laced with insanity much of the time, so much so it's hard to distinguish one from the other.

##

"you can't legislate for morality or against greed, if you could no one would try to find loopholes."

I think lookin' for loopholes is distinctly human and unavoidable as evidenced by every murder and rape and act of theft (all of which have been legislated against, largely because each is 'wrong' [immoral]).

"...and the person who found a book they want to buy, but, it costs a thousand dollars, so you can afford to pay that worthless book shelver $50/hr."

As I say: 'If I over-value, then my business suffers by way of my misuse of cash', and, 'If I'm unwise then -- one way or another -- I go out of business'.

Of course, if the idiot is willing to pay me a grand for a book, who am I to turn him (or her) away?

Who said the idiot was gonna buy the book? Hell, only your shelver could afford it. And she/he ain't gonna buy it. They're gonna take it to the bathroom, and, read it on their break.

Now, you can't even sell the book, it's been in the bathroom, it's marked.

Nice Seinfeld reference! :D

Not if all the buyers are making $50/hr. And the books would not have to increase in price at all if bookstore owners who make $100MM/year reduce their own income.

[Pete Hogwallop]That. Don't. Make. No. Sense.[/Pete Hogwallop]

Thankee, ma'am.

I'm also hearing snippets of conversation in my head:

What do you do?

I program CNC milling machines for the aviation machining industry.

How much do ya make doing that?

Minimum wage.

Hmm

*applauds*

Excellent.

It reminds me somehow of Anne Elk.

Except her theory was correct.

Massachusetts too.

That's much more reasonable than Seattle's plan. If the number is kept within a certain level, like the tying to inflation they suggested, it won't have as much of an impact.

Everything is tied together you know. To imagine it won't have any impact, or that it will hurt only the targets we hope for and not the ones we don't, is just wishful thinking. We constantly bolt things onto the economic plane for our various reasons and sometimes it's good. Other times the plane no longer has lift and then the entire economic engine may falter. (oh no mixed metaphor!) When there is no economic growth, that hurts the poor most of all.

And we actually want some low wage jobs. Traditionally, things like fast food are called starter jobs. The jobs are easy to do, don't add a ton of value, but wind up teaching people how to hold a job. How to apply, interview, how to get there on time and groomed, how to manage weekly pay, how to orally satisfy your bosses, etc. etc. Not all low wage jobs are taking advantage of people, and if they offer a boost to a better job, that's great. How many of us had a first job in fast food? (raises own hand) It paid shit, right? (nods) But it was good for you? Part of life? And when you realized you didn't want to do this your whole life, that was part of it too? A little motivation to make sure you didn't get stuck there. Exactly. S'a good thing.

And it was hers, too.

Not having a mimimum wage also has a negative effect - people working full time, sometimes in more than one job and still being too poor to feed their families. That is wrong. And the idea that they are free not to be exploited is ridiculous, if the alternative is starvation and destitution. You can get away with not having a minimum wage if there are adequate support systems in place through benefits - if the choice is between subsistence or taking that job, then fair enough. That's a true choice.

Not having a minimum wage and not having adequate safety nets in place forces people to accept exploitation.

Some jobs are starter jobs, sure - but that's usually about the age of the person, not the nature of the job. A 17 year old, living at home with his parents and earning $8 an hour is one thing. A 40 year old with children to feed doesn't need a 'starter' job, he needs a living wage.

Over here we scale the minimum wage according to age - so a 'starter' job is only a starter job for those at the start of their working life. It's still shit and far too low - and there is growing pressure for the living wage, rather than just a minimum wage.

And if paying a living wage means you can't afford to hire the staff you need, then your business model is broken, your business is not really solvent it is just pretending to be, with the shortfall resting on the backs of people who can't afford to say no.

And yeah - it will probably put up prices of cheap burgers - but that's ok, because if working people are earning that bit more then they'll be able to afford those slightly more expensive burgers.

And if the people who run those burger bars and cheap shops are worried that they won't be able to employ enough people, because it will put the prices up and customers won;t be able to afford what they're selling, then they should be supporting decent welfare payments for those who aren't in work. Because damn near every penny of that welfare gets spent on their products.

Instead, though we (I include the UK in this) opt for a race to the bottom - wages stagnate, and benefits are slashed, so prices have to be slashed to bring in customers, and the low prices mean that wages have to stay low, and so on, and so on. And as low as those wages go, there will always be a pool of people who will take those jobs, because they have no other option if they want to remain fed and housed - and so there is no competition driving wages up.

Meanwhile, at the other end of the scale, remuneration and bonuses go through the roof, and are justified with the idea that in order to hire the best you have to pay high.

There is very little evidence that minimum wages damage employment levels. Very few companies are unable to hire the staff they need because they have to pay a couple of dollars more per hour. It just means they have to find their savings elsewhere. As long as there is no minimum wage and no benefits to speak of, then there is no incentive to look at less palatable savings - it is always easiest to skimp on the workforce.

I think I've seen enough evidence. I could be wrong. This is one of those things where the truth is hard to find, because the sources we read will tell us the story we like to read. Still, the first Google result for "minimum wage unemployment" is this:

http://dailycaller.com/2014/03/31/st...-unemployment/

Well yeah, it's a righty website writing about a vaguely righty organization's study, but it's just math they're doing in that study, and people could check their math.

But can they be sure it was the minimum wage and not other economic factors working in parallel?

I was trying to find, but couldnt - there was an article about a month ago which seemed to show evidence to the contrary.

The thing is - a 1.48 % increase in unemployment to me seems less damaging overall than huge swathes of employed people not being able to afford food.

Also worth considering - is that a permanent increase in unemployment? Or is it a temporary rise immediately following introduction of the requirement that then settles back down as the minimum wage becomes accepted as the norm?

So when states have some unique industry like fishing, which runs into unique problems like government limits/empty nets, driving the unemployment rate for that state higher than it's neighbors, that's an effect caused by minimum wage? I don't think so. There are too many factors contributing to the state rate to be saying it's cause and effect.

$2.63? :eyebrow: $3.61? :eyebrow: Before taxes. :facepalm:

Not an unbiased source, but it brings together lots of studies (including a 2013 study by the University of Chicago:

http://www.raisetheminimumwage.com/pages/job-loss

Let's get it out of the way -- I think there should be a minimum wage set by government. I think it's society sending a signal to the markets that workers should not be taken advantage of, which is always a danger, and here is a level we have kind of agreed on, below which we think you're kinda sorta taking advantage.

Also, I brotherylove you D, don't ever change.

~ with that outta the way ~

I agree that the new labor situation will put pressure on things other than workers. Everything is connected. Perhaps in our mythical business, the owners will not buy the new oven this year. Maybe they will take a lower wage themselves. Maybe they will raise the price of their burgers. Maybe they will do with one less cook. Maybe they will cook more hours themselves. Maybe they will have customers with more money who will absorb the price increase. Maybe with that new money they will hire more workers at the new wage.

Stop, all the possible outcomes are overwhelming!

Everything is connected. When you say "It just means they have to find their savings elsewhere" you have personalized a model business that jibes with how you want and expect it to work.

We like to imagine that business, because these models that appeal to us. And they do help us to think about what's involved.

But there are hundreds of thousands of business models out there, each one making hundreds of decisions every day. How do we know if our model business has anything to do with reality?

Here's another model: imagine one person in an office in a major city, running a very large Excel spreadsheet, and saying wow: if we automate the drinks machine we pay $25000 per store, but we save $11000 in labor each year, and using the present value calculation with low inflation we will turn a profit in first quarter 2018.

But even that is a cartoon of the economy, and a model that jibes blah blah blah.

Ugh, I'm an hour into this, let me just post and walk away.

You're thinking of choirboys. :rolleyes:

The minimum wage only effects the starter job concept, the pimply faced teen learning responsibility at McWenBurg, is misleading. But that's what most people think about when the subject comes up. There is a whole hell of a lot of people working for minimum wage who are not in fast food. Both the fast food and other jobs are no longer a step to something bigger and better because that next step rarely opens up unless somebody dies or gets jailed.


I have no clue if this is accurate or completely from whole cloth, but there is certainly plenty of anecdotal evidence to make it sound reasonable.

Awww Tony, ya know I sisterylove you too :P

One thing to bear in mind though - is that according to those studies I linked to ; three quarters of those on minimum wage work for large companies, not small businesses. Small businesses are more likely to pay a fair wage than large corporations (small indy burger bar rather than McDs)

And its those big corporations that are paying its CEO's billions off the backs of those minimum wage employees...reducing them to nothing more than wage slaves.

How else do you keep the rabble in their place. As soon as they're making a living wage they have extra time to start thinking, and we all know what happens when the rabble start thinking. Boston Tea Party? Ft Sumter? Alamo?

North Dakota is not thinking minimum wage.

Yeah. But, but They'er only hiring only 3 people. Rest is self check out lanes. :angry:

Sounds like amazing pay, but you can't live on those wages in ND because there is almost no housing.

You'd need to tow a camper with some nice insulation for the winter months and find a place to park it and let you hook it up.

I imagine Walmart might be interested in such an arrangement

Heh. The article is making the opposite claim, and the quoted paragraph was provided as counterpoint to the subject of the article.

I don't buy the bullet points pushed by pundits when "raising the minimum wage" is discussed.

One of the current hallmarks of today's economy is "high productivity"

I think that just means that employers are getting more product out of every employee.
But it also probably means they are paying the least amount of wages they can,
and their employees are working about as hard as they can.

If such is the case, employers are not as likely to lay off the workers they have now.
If they did, there were be fewer products and lower profits.

Consider a restaurant, if they laid off waiters/waitresses or cooks,
fewer meals would be served, and profits would go down

Instead, I think they will just pay the new minimum wages, and move on.

Would you pay more for a meal at a place paying very high salaries to their wait staff, Lamp?

Not "employee", but "payroll dollar". There's no such thing as people to The Man, only numbers.

In the short term, profits would go up. Fewer meals wouldn't be served, right off the bat, they'd just take longer to get to the table, people would have to wait to order, etc. When customers stopped coming for those reasons is when fewer meals would be served and profits would drop.

I doubt it. American business isn't like Japanese business - they don't think long term. They see the short term improvement and think it will just continue. Six months later, they fold.

We already do.

Your stance is that minimum wage is "very high salaries" ?

It's a hypothetical.

OK, whatever that means.

It means I'm asking you a leading question as part of a discussion.

OK, my answer is Yes. Go ahead and say whatever you wanted to say.

Sorry, it's an annoying line of conversation, online. I will shorten the transaction.


In your budget, what would you now not pay for, in order to eat there?

It's because you said, "Instead, I think they will just pay the new minimum wages, and move on."

I think the "move on" part is unacceptable. That's what a lot of this thread is about. Can't just throw away one side of the equation.

Now you have paid $10 more for your ribeye at Texas Roadhouse and your server was well-compensated. So far so good. But you can't just "move on", because now there are $10 fewer dollars in your billfold. So, what will you now not pay for, now that you have paid more for a steak?

From your link, what the hell is the difference between the duties of a Host vs a Hostess? Different pay and different pay range. :eyebrow:

UT, I think we have each misunderstood one another.
In my post, by "they" I meant the "employer" would move on.
Obviously the employer has several options ... taking a smaller profit is one, raising meal prices is another, or reducing other costs (menu, portion size, ingredients, etc.) are within the purview of the employer.

The employee has only 2 options... continue at currently offered wage or look for work elsewhere.

Within your meaning, whatever I would do if I had $10 less in my billfold would depend on my level of income and assets.
At some level downwards, I would not be able to pay for the meal.
At some level upwards, $10 would not make any difference at all.

My view of the minimum wage is that a (relatively) small increase in wages can make a much more significant improvement in the life of employees than the same sized decrease in profit will make in the life of the employer.
But all that is for a different posting

It's gender discrimination ;)