$15 minimum wage...I know I'm poking the bear, but...

[Gravekeeper]

The biggest problem with the US Federal minimum wage is that unlike other western countries it is not subject to automatic increases to keep pace with inflation or cost of living. Adjusted for inflation the minimum wage has been going down since the late 60s and is now something like 30% lower than it was in 1968 ( which was, sadly, the year that minimum wage peaked in the US ).

While the productivity of a single employee has increased immensely. If the minimum wage kept pace with the increase in employee productivity it would need to be over $20 an hour. US employers have been getting more and more from their work force while paying them less and less.

Which is especially assholish of the fast food industry in particular who largely operate on a national or international scale. While only paying out whatever the lowest possible is per local or federal law. When all the numbers show they could hike their entry level wage to $15 tomorrow with only a negligible impact on business.

I've yet to see an argument against raising the minimum wage that was anything except bullshit and fear mongering about Jerbs(tm) and Job Creators(tm). Typically from the mouths of people cashing checks from the corporations in question.

McDonald's lobbyists for instance are the ones that "educated" Congress on the dangers of raising the minimum wage too fast and how it would threaten "small businesses". >.>

[NecCat]

I've yet to see an argument against raising the minimum wage that was anything except bullshit and fear mongering about Jerbs(tm) and Job Creators(tm). Typically from the mouths of people cashing checks from the corporations in question.

McDonald's lobbyists for instance are the ones that "educated" Congress on the dangers of raising the minimum wage too fast and how it would threaten "small businesses". >.>

I have no argument against raising the minimum wage to a proper living wage, but I really do think that raising the minimum wage too fast would threaten small businesses significantly. Not really retail, or any other business that relies on paying the majority of their staff minimum any way, because all the competitors would be affected equally, and not for business that pay well above minimum, but for business that rely on staff making small amounts above minimum.

I started typing out why, but it got really long. Lets just go with, wages at my company start around 13$/hour, average around $20/hour and max out at around $30/hour. Wages are 35% of our costs, and our company grosses around 4% annual profit.
Increase the lowest wages to a new minimum of 15$, don't increase anything else and we would lose about 1/2 our staff right off the bat. Working for 15$ at Tims or something, easier work, less stress, easier life, why would they stay here. We would also have a hard time hiring new staff for the same reason.
Increase all the wages at the same percentage as the minimum goes up to retain staff and pricing would have to go up a minimum of 11% for the company to break even. That's a big jump, and our current minimum wage is already around 11$, in the US it would be even worse, theirs is $7.25 currently, making 15$/hour a huge jump percentage wise.

So how much do you increase wages, or pricing? Put pricing up too high, you lose a majority of your customers. Try to keep wages lower, keeping pricing competitive, lose a lot of staff. Large business can afford to lose money for a time until they sort out proper sales points and wages. A small business with small margins and an inability to 'float' unprofitable times for only a year or so could be out of business before they find the wages and pricing they should use.

All that said, I have seen nothing in any area where minimum wage is rising to indicate it will rise instantly, or even very quickly. Going up by $1 or $1.50 per year should give all business time to adjust and work on costs/wages/pricing accordingly.

[Racket_Man]

Nothing wrong with a starter wage, but when companies are slashing rungs on the ladder and don't give cost of living raises, the idea of a starting wage is kind of laughable.

.

OR do as my pizza franchise has chosen to do NOT give ANY raises to most hourly employees for the last 5 or 6 years.

We used to get raises (although not very much but still we got merit increases if warranted once a year) along with other "benefits" such as decent health affordable insurance, vacations if you averaged 20+ hours a week over the calendar year, free on-shift meals, off shift discounts, paid holidays for Xmas and Thanksgiving (if that was your regular day of work), etc.

that has all gone away in the last 5 - 7 years with little hope of them coming back.

[mjr]

Frankly, the profit a company makes, and what people are earning above the min-wage points, are IMO, irrelevant to the discussion. (Especially the first part).

Disagree. That's part of the entire thing. At least that's what we're told by advocates. That corporations who have high profits (from a dollar perspective) are somehow "greedy"...

What it comes down to, is that someone working a full time (40hours/week) job should make enough to live without extra assistance at the location the job is at.

So would you be willing to eliminate certain governmental benefits if people made this "enough to live without extra assistance"? And what does "to live without extra assistance" mean? Carrying around a $600 mobile device? Having an expensive cable package?

Or does it mean "I can pay my necessities" (hint: cable/satellite and a $600 mobile device aren't necessities). I'm not talking about living "without dignity", I'm merely talking about living within one's means. If it's about "enough to live without extra assistance" then guess what, you probably shouldn't have cable TV. Period.

Some fake numbers example.
Let's say the minimum wage is 8$ an hour. Economists work out that a living wage would be 12$/hour. The region has a 5% inflation rate, and there is a 10% cap on min wage increases.

Economists? Which ones? Which economic theory do they subscribe to? Is it a mix? Keynesian? Neoclassical? Friedman?

My point there is there is no one general way to view economics

[mjr]

mjr, you have made several points I feel need to be addressed, since they are, to be frank, outright toxic.

Well, I'm not exactly sure how they're toxic, but since you responded in a civil and respectful manner, I'll see if I can address some of them.

1. minimum wage raises causing people that were earning above minimum wage to now be earning minimum. You answered that point yourself in your arguments against a rise in the minimum wage. If your job doesn't pay you what you think is worth it, then either request a raise (if you really are worth more, then, by your reasoning, it should be obvious that you are worth the higher wage and the employer should be willing to give you a raise.)

I understand what you're saying here. But you and I both know that even if the raise were granted it might not be commiserate.

Let's use an example. Jim has been working at MegaCorp for 10 years, and worked his way up to $17/hour. And let's say that the $15/hour MW is enacted.
Now, Joe gets hired, fresh out of school, for $15/hour. Jim, who has been working at megaCorp for 10 years now makes approximately 13% more than Joe, who just got hired. So now, Jim goes to his boss (who has to go up the proverbial ladder and get things approved) and asks for a raise, saying that he has 10 years experience, is a hard worker, and so forth.

Jim might want 10 or 15%, but his boss comes back and says the company will only approve 2%, which would put Jim at about $17.34/hour. Do you think that's commiserate?

That, and are you seriously saying that, to allow people earning slightly above minimum wage to have an ego trip, people should be forced to live in a situation where they can barely put food on the table?

Not at all. If this is about "doing what's right" (which it appears to be, and "what's right" is subjective), then wouldn't it be "right" to give other employees a bump, too?

Because I can't, in all honesty, call that a moral choice.

You don't have to. And this isn't really about morals. Most companies and corporations are actually amoral. The people running them have morals, but the entities themselves (just like economic schools of thought) are amoral.

2. minimum wage is for starter jobs for people leaving school. To answer this, I'll point out that the US Department of Labor site, Here mentions that 89% of those on minimum age are over 20.

This: http://www.bls.gov/cps/cpsaat44.htm

Counters what you said. It shows that 3.9% of hourly workers 16 and over are making at or below minimum wage. 9.4% between 16 and 24, and 2.9% of those 25 and up.

4. people asking for cuts in hours when wages increased. IIRC, first of all, the issue was a rise to $11, not $15. Second, the reason they wanted to keep their benefits was that, at $11, thye would be both unable to afford private rented accommodation, and too rich for subsidised accommodation. In short, the actual issue was that the rise was at exactly the wrong level: just enough for the workers to be ineligible for welfare, but too low to actually live on.

I'm sympathetic, I really am, because I was actually in a similar situation when I was younger. There were many times when we were literally one paycheck from losing our residence, or having a utility shut off, or losing car insurance, or whatever.

My mother was divorced, and it was her, me, and my sister. Thankfully, I was old enough to work, and did so. Did it probably cost me something in the long run? Possibly. But I did it.

My sympathy in the situation above goes only so far, though.

5. Job Losses. I'm not going to say it won't happen- though please bear in mind that there are companies that would use the minimum wage increase as an excuse for already-planned job losses- or that would cut jobs simply to make it look like it caused a bigger issue than it did

I think you underestimate me a little. I'm under no illusion that this won't happen. Some will be legit, some won't. There won't be any real way to tell for sure. It's also extremely possible that it will spur another round of what I've heard dubbed "creative destruction".

7. how much is too much profit? well, to be frank? when you are making a profit by not paying your workers enough to live on unless that work truly ridiculous hours- I calculated it once, and it's physically impossible to both earn enough to scrape by on minimum wage, and get enough sleep- then any profit is too much.

That answers the question, but it doesn't. A lot of people tend to look at dollars when they think profits. What do you think Wal-Mart's profit margin is, by percentage? It's around 3%.

https://www.aei.org/publication/the-...t-5x-too-high/

But remember, some of that is because of the value of stock that people have.

But consider: I did a quick Google search, and Wal-Mart has approximately 2.2 million employees.

If their net income was $16 billion, and you distributed that net income evenly to all 2.2 million employees, it would give them all about a $7,272 raise.

Ergo, if a WM employee currently makes MW (most don't, by the way, they make above that), that would bump them to $11.25/hour, assuming a full time 40-hour workweek. That's $23,392/yr., approximately $1,949.33/month. And WM at that point would be at a ZERO profit. Which I'm sure stockholders and shareholders wouldn't like -- at all.

Not only that, but according to this:

http://blogs.wsj.com/corporate-intel...nagers-office/

The average Wal-Mart hourly worker (not including management) already makes $11.81/hour. Above what I noted previously.

But let's consider: Even at that rate, that's $24,564.80/year, or approximately $2,047/month. So again: Is $24.5K livable? Especially considering the numbers I gave earlier, and if you consider a two-income household, that's $49,129.60 per year (approximately $4,094/month), assuming 2080 hours for each person. I supported a family of three for a while on $45K (sole income earner), and that was with bills, rent, groceries, etc. So two people, splitting rent, should be OK on $49K, wouldn't you think? That does, of course, put aside arguments such as savings, retirement, and so forth, but I think you understand what I'm trying to say.

But let's throw in two weeks vacation. So that gives 2,000 hours available (8 hours per day). At $11.81 per hour, that's $23,620. In a two income household, where both people make the same (we're assuming, here), that's $47,240. Assuming 2,000 hours worked (allowing 2 weeks vacation).

The big problem is most of these jobs aren't full time jobs. If you cut the hours down to 30 per week, you get $18,423.60/year, or approximately $1,535.30 per month. So I think that the issue in a lot of cases is hours (hence, people having to work two jobs), not necessarily pay.

In short, I find it despicable you can honestly argue that people should be forced to worry about starving just because some people aren't much better off.

Hey, I provided solutions. Everyone, for every job, makes the same amount of money. Takes care of the issue, right? The cashier makes the same as the CEO. Solved.

Or what about my other solution? Just let the government look at each job, and decide how much each job is "worth", and have the government set the prices? That'd be fair, wouldn't it?

And as I asked Jetfire, if this "living wage" were to be granted, would you be in favor of limiting/reducing/eliminating certain benefits that are available? I'm just wondering. Since, you know, not as many people would then be needing them...

Just asking.

[KabeRinnaul]

Hey, I provided solutions. Everyone, for every job, makes the same amount of money. Takes care of the issue, right? The cashier makes the same as the CEO. Solved.

Or what about my other solution? Just let the government look at each job, and decide how much each job is "worth", and have the government set the prices? That'd be fair, wouldn't it?

Look. I know you really, really like dragging this exact same strawman out over and over every time the subject of minimum wages comes up, but please, drop it. Minimum wage increases in no way suggest the adoption of pure socialism nor a planned economy, unless you honestly think the only options are a complete laissez-faire free market or a Soviet-style planned economy.

And as I asked Jetfire, if this "living wage" were to be granted, would you be in favor of limiting/reducing/eliminating certain benefits that are available? I'm just wondering. Since, you know, not as many people would then be needing them...

Just asking.

They wouldn't need to be reduced, because fewer people would need them, and would drop from the programs in the end.

Or, why not drop all of our current welfare programs and institute a minimum income and single-payer health care? Frankly, it would probably be more effective than our current patchwork system while costing us less. Plus it would play nicely with your fondness for hyperbolic comparisons to socialism.

[mjr]

Look. I know you really, really like dragging this exact same strawman out over and over every time the subject of minimum wages comes up, but please, drop it. Minimum wage increases in no way suggest the adoption of pure socialism nor a planned economy, unless you honestly think the only options are a complete laissez-faire free market or a Soviet-style planned economy.

I'm using it as a rhetorical device. All I hear about is how it's unfair that some people make significantly more than others. So I'm tongue-in-cheek remedying the problem.

They wouldn't need to be reduced, because fewer people would need them, and would drop from the programs in the end.

I'm talking about the availability of said programs. Maybe make the criteria a bit more stringent.

[mjr]

Why do you give a shit that other people get paid?

Do you mean "that" or "what"?

I don't care that others get paid.

As far as "Why do (I) care what other people get paid?", I could ask the same question.

[Jetfire]

And as I asked Jetfire, if this "living wage" were to be granted, would you be in favor of limiting/reducing/eliminating certain benefits that are available? I'm just wondering. Since, you know, not as many people would then be needing them...

Just asking.

Well, if a "Living Wage" was met, then a number of those programs WOULD be reduced/limited and/or eliminated just by the fact that more people would be earning enough that they wouldn't qualify for those programs any more.

So in that case, I would support reducing those programs. We probably wouldn't be able to eliminate them, since not everyone will be working 40hours/week, or even working at all. But the number of people on those programs would be less. (And many of those programs could probably then be combined/retooled to better server the needs of those people).

As for what the definition of a living wage is, that is up to the Law makers to iron out, in consultation with statisticians and economists. While there are numerous schools of thought on various economic theory, I'm sure that the lawmakers and lawyers, statisticians and economists could work out something that is mostly workable; as those types usually do. It's never perfect; but few would argue it would be worse than what we would have now.

For me, I'd qualify a "Living Wage" as a wage that, after 40 hours of work a week, you can afford:
* Enough basic food for that week. (So not 7 days worth of Filet Mignon, but not 7 days of Ramen either)
* A simple living space. (Not a penthouse suite; ideally somewhere above the slum level)
* Covering the weeks worth of utilities for that space. (Basic Cable and Basic Internet would fall here too)
* Transportation for the week. (Whether by a basic car, or by public transit)
* A small amount for a slush fund, clothing, miscellaneous stuff, entertainment, education, savings, etc...

And to address your strawman of the 600$ cellphone: No, a new 600$ cell phone would not be a basic need. But a basic phone (or way to communicate) would be a necessity nowadays. MinWage by itself should not be enough to afford the latest iFruit. But if someone skimped their meals, made their accommodations stretch by sharing an apartment or living with family, worked extra hours or a second job, all so they COULD get the latest iFruit, then all the better for them.

I know the values are hazy; but I'm not an expert. Most people would recognize what the basic needs a person needs to satisfy to function in this society; the minimum wage should be set so those necessities are met by the standard work week.

[mjr]

Well, if a "Living Wage" was met, then a number of those programs WOULD be reduced/limited and/or eliminated just by the fact that more people would be earning enough that they wouldn't qualify for those programs any more.

So in that case, I would support reducing those programs. We probably wouldn't be able to eliminate them, since not everyone will be working 40hours/week, or even working at all. But the number of people on those programs would be less. (And many of those programs could probably then be combined/retooled to better server the needs of those people).

Fair assessment, Jetfire. But I honestly don't think that most of the people advocating a "living wage" would also be in favor of reducing the programs. The goalposts would just be moved, I believe.

Though I may encourage "financial literacy" classes -- for everyone. You'd be surprised at how many "high income" people don't have good financial literacy.

And to address your strawman of the 600$ cellphone: No, a new 600$ cell phone would not be a basic need.

I disagree that it's a strawman, but we are in agreement that it is not a "basic need".

But a basic phone (or way to communicate) would be a necessity nowadays.

This is basically what I have...and I make over $70K a year.

MinWage by itself should not be enough to afford the latest iFruit. But if someone skimped their meals, made their accommodations stretch by sharing an apartment or living with family, worked extra hours or a second job, all so they COULD get the latest iFruit, then all the better for them.

That example, though, shows a certain level of sacrifice that I'm not sure a lot of people (in general) would be willing to exercise.

I know the values are hazy; but I'm not an expert. Most people would recognize what the basic needs a person needs to satisfy to function in this society; the minimum wage should be set so those necessities are met by the standard work week.

I understand the point here. The problem, as I stated in another post, is sometimes the hours and not necessarily the pay. If you're making $20 per hour, but only working 20 hours a week, that doesn't do you a lot of good, does it? And it may not be your fault you're working those hours. You (in a general sense) may have asked to work more hours, and maybe there's a slow period, or the type of work just doesn't warrant it.

[Jetfire]

Fair assessment, Jetfire. But I honestly don't think that most of the people advocating a "living wage" would also be in favor of reducing the programs. The goalposts would just be moved, I believe.

Though I may encourage "financial literacy" classes -- for everyone. You'd be surprised at how many "high income" people don't have good financial literacy.

Well two proponents in quick succession agreed that those programs would be better allocated in other ways, once a living wage is established. Certainly there are some folk who would advocate to leave it all the same; each side has the extremists. I suspect most would be fine with letting those programs be reduced/reallocated based on the new needs.

And yes, Financial Literacy classes should be mandatory for everyone. I'm a firm proponent that all high schools should have a mandatory "Independent Living" course that covers basic home ec (Cooking, sewing, laundry), simple home and vehicle care and maintenance, and financial literacy. Basically everything a young adult will need to know once they become independent.

I disagree that it's a strawman, but we are in agreement that it is not a "basic need".

This is basically what I have...and I make over $70K a year.

I see it as a strawman for the implication; That just because someone making minimum wage has the latest iFruit, that minWage is too high; when there are other possible explanations. (It was a gift from a richer friend, they scrimped and saved for it, they are buying it on an installment plan, they had a higher paying job when they got it, etc...)

Basically, when it comes to wage arguments, I try to NOT let the examples of 'splurges' affect my view of the basic problem, since most examples are the rare exceptions usually, not the usual case. (Now if you could show that a large percentage of folk on MinWage were splurging on things like the 600$ iFruit, then you would have a good argument for MinWage not needing to be raised)

That example, though, shows a certain level of sacrifice that I'm not sure a lot of people (in general) would be willing to exercise.

And that's why the governments need to show some backbone and make the hard decisions, even if some folk are clamouring for more. (And yes, I realize that is asking a lot of government, especially the current US government). The government needs to make sure they try to fix the root cause (that min wage is out of synch with inflation) and not just put yet another bandaid on it.

The simple fact is, the minimum wage has greatly fallen out of synch with the rate people need to cover the basic necessities of modern life. Ultimately, that is the problem that needs fixing; the 15$/hour is just a rallying point but it is not the ultimate solution.

I understand the point here. The problem, as I stated in another post, is sometimes the hours and not necessarily the pay. If you're making $20 per hour, but only working 20 hours a week, that doesn't do you a lot of good, does it? And it may not be your fault you're working those hours. You (in a general sense) may have asked to work more hours, and maybe there's a slow period, or the type of work just doesn't warrant it.

If you can't match the hours needed, then that's what those benefit programs would be for; hell that's what they are doing now. By raising the minimum wage to a baseline and letting that base rise with inflation, we're taking some of the pressure off the programs; but few people would be naive enough to think the programs would be completely unneeded after all is done.

[Gravekeeper]

Lets just go with, wages at my company start around 13$/hour, average around $20/hour and max out at around $30/hour. Wages are 35% of our costs, and our company grosses around 4% annual profit.

Those numbers don't help much unless you know what percentage of your labour costs are specifically minimum wage workers.

Increase the lowest wages to a new minimum of 15$, don't increase anything else and we would lose about 1/2 our staff right off the bat. Working for 15$ at Tims or something, easier work, less stress, easier life, why would they stay here. We would also have a hard time hiring new staff for the same reason.

That is a problem with your business specifically though. All you're saying is your business is not competitive in the labour market and you would end up underpaying employees for the amount of work they do. The "Won't Somebody Think of The Small Businesses" argument is about the overall lose of jobs as employers go out of business. In your scenario those employees are just finding better jobs. Not becoming unemployed.

Put pricing up too high, you lose a majority of your customers. Try to keep wages lower, keeping pricing competitive, lose a lot of staff. Large business can afford to lose money for a time until they sort out proper sales points and wages.

But see, this is another flaw in this line of argument. People with more money spend more money. Increases in minimum wage always lead to an increase in sales across most sectors. All of the popular arguments against raising the minimum wage seem to assume that the extra money is just going to vanish from the economy entirely.

That's a big jump, and our current minimum wage is already around 11$, in the US it would be even worse, theirs is $7.25 currently, making 15$/hour a huge jump percentage wise.

You should probably have mentioned you're not in the US from the get go. As this whole debate is about the US. Other countries have much different economies and costs of living.

American employers critically underpay the bottom tier of their workforce and the cost of living is much higher in the US thanks to things like for profit health care. If you live in virtually any other developed country you likely have universal healthcare. You don't have the looming threat of going bankrupt because you got sick or broke your arm.

[mjr]

And yes, Financial Literacy classes should be mandatory for everyone.

I wouldn't go so far as to mandate it. I would go for strongly encourage or incentivize.

I see it as a strawman for the implication; That just because someone making minimum wage has the latest iFruit, that minWage is too high; when there are other possible explanations. (It was a gift from a richer friend, they scrimped and saved for it, they are buying it on an installment plan, they had a higher paying job when they got it, etc...)

Ok, I can see it from that perspective. The perspective from which I was presenting it is that a lesser-priced phone would (generally) provide more money for them to use on other necessities.

[Gravekeeper]

So would you be willing to eliminate certain governmental benefits if people made this "enough to live without extra assistance"? And what does "to live without extra assistance" mean? Carrying around a $600 mobile device? Having an expensive cable package?

Ugh, you're really going to go the Welfare Queen route?

The average Wal-Mart hourly worker (not including management) already makes $11.81/hour. Above what I noted previously.

The $11.81/hour figure is what Walmart itself claims. The bottom rung at Walmart is $8.48/hour according to that article. And its the bottom rung we're talking about. They also claim, in the same breath, that only 5,000 in their work force make minimum wage. Hah. Walmart has been historically misleading/dubious when taking about figures related to its employees and wages.

Walmart is the largest private sector employer in the country. It is also the largest beneficiary of public assistance. As its labour force is, in effect, subsidized by the government through social assistance programs. Because they are not paid enough to live on. Walmart employees are the largest group on Medicaid. They're the largest group receiving food stamps.

The average Walmart associate is receiving $1000 in government assistance. You, the taxpayer, are paying for their workforce. Because they won't.

Economists? Which ones? Which economic theory do they subscribe to? Is it a mix? Keynesian? Neoclassical? Friedman?

600 economists including 7 Nobel prize winners petitioned Congress in an open letter to raise the minimum wage last year. -.-

[s_stabeler]

the issue with a lot of the arguments about if a MW rise is affordable or not is that, ultimately, my point is that should a company be allowed to pay workers less than they need to survive on? routinely, not just because a particular worker sucks at budgeting?

In other words, I consider raising the MW to be the equivalent of discovering someone has been underpaid, and raising their wages to the level that it should have been at. Which neatly answers the question about if other people should get a raise. Nope- or rather, not just because MW got raised- because they aren't necessarily underpaid. It also explains why I am unimpressed by claims that businesses will go bankrupt- I consider those businesses to only be solvent by not paying all their bills.

as for the question of hours: you aren't entirely wrong- businesses not letting their workers have enough hours (and it usually IS a business decision, rather than something businesses do because they have to- like businesses limiting hours to avoid paying for health insurance. That's an argument businesses are acting in bad faith, NOT an argument against fixing the problem.)IS a problem, but since MW is now so low compared to COL, it's getting to the stage where it is physically impossible for someone to survive on the MW.