Are these projected median wage numbers adjusted for the minimum wage increase itself? According to the Bureau of Labor Statistics my home city has a current median wage of $18.81. The current minimum wage is $9 an hour. Wouldn't a MW hike to $15 an hour drastically raise the median wage as well?
3
Here's a thought from high minimum wage Australia - paying your workers a living wage - enabling them to actually enjoy life with their kids, and make life more pleasant for folk in their community as well - may make their jobs more attractive than the prospect of selling drugs or turning to a life of crime
but hey - what would all those private prison and security corporations do if they had no customers ... that might threaten their private profits - time for them to donate more to the conservative SuperPACs I guess.
but hey - what would all those private prison and security corporations do if they had no customers ... that might threaten their private profits - time for them to donate more to the conservative SuperPACs I guess.
35
The people favoring this increase have never owned a small business, operated a restaurant, or had a factory which had to compete with China.
It is always easy to support giving someone else's money away.
It is always easy to support giving someone else's money away.
20
Anything that puts more money into the hands of working families and allows them to live a life with some prospect of advancement is fine with me. A higher minimum wage will decrease the number of working poor relying on food stamps and subsidized housing to make up the difference in income, reducing the amount of government in their lives. What's not to like?
12
Why should we even have a minimum wage? Be like Switzerland and do not have any. Where do they get this magical $15 an hour? Why not $50 or $100 or $1000 an hour?
9
Some school districts may have to pay their teachers more.
13
The average worker in the US produces ~$67/hr in GDP, and earns an hourly wage of ~$16/hr, $51/hr goes to 'the boss'.
How controlled are we by the rich? Well, we're fighting for decades over a couple bucks an hour while they take home $51/hr. from each worker.
The fake liberals can also have a share of the blame, they scream about the minimum wage, but also support the most regressive taxes, i.e., sales tax, excise tax, the lottery, etc., and also use the court system to fine and fee the poor further into poverty.
Join the radical center; raise the minimum wage and cut regressive taxes, the higher tax base from better wages and the lower need for social services with less people in poverty can compensate for lost tax revenue.
How controlled are we by the rich? Well, we're fighting for decades over a couple bucks an hour while they take home $51/hr. from each worker.
The fake liberals can also have a share of the blame, they scream about the minimum wage, but also support the most regressive taxes, i.e., sales tax, excise tax, the lottery, etc., and also use the court system to fine and fee the poor further into poverty.
Join the radical center; raise the minimum wage and cut regressive taxes, the higher tax base from better wages and the lower need for social services with less people in poverty can compensate for lost tax revenue.
13
Not all members of the management and owner class can truly fit the definition of the “capitalist” class. The independent shopkeeper, restaurant owner, and individual franchisee, when their draw (including benefits, which may be nonexistent) is divided by actual hours at work, may well be grossing well below minimum wage before taxes. It’s not at all unusual to see a conscientious and ethical restaurant owner taking home less than his or her line cooks and perhaps even dishwashers, at least until the eatery becomes truly profitable. (This does not include, of course, those who commit wage theft or otherwise fail to pay tipped minimum+the shortfall (e.g., the supplement the law says they should pay to tipped workers to bring them up to regular minimum wage---those owners are unethical).
Perhaps the minimum wage in a particular city should initially be a percentage of the median wage--and if it were the same percentage nationwide it would more accurately reflect the cost of living in that area. Once the new higher minimum wage has had a chance to raise the standard of living in a particular city, the percentage could be revisited.
However, the salaries and bonuses of top-level executives should not be factored into the calculation.
Perhaps the minimum wage in a particular city should initially be a percentage of the median wage--and if it were the same percentage nationwide it would more accurately reflect the cost of living in that area. Once the new higher minimum wage has had a chance to raise the standard of living in a particular city, the percentage could be revisited.
However, the salaries and bonuses of top-level executives should not be factored into the calculation.
1
Increased wages for fast food workers
= Increased cost for fast food
= decline in fast food consumption
and decrease in escalating obesity epidemic
Sounds like a win-win to me.
= Increased cost for fast food
= decline in fast food consumption
and decrease in escalating obesity epidemic
Sounds like a win-win to me.
7
Decline in fast food consumption also means failing businesses and unemployed fast food workers.
13
With countries, states, counties and cities around the world instituting and changing minimum wages there should be some scary documentation of job loss associated with the minimum wage.
Perhaps the fact that it takes twelve man hours to skin a cat no matter the hourly wage, the option is to use twelve hours or buy new labor saving equipment or train workers to be more efficient or stop skinning cats.
Usually they do not stop skinning cats as " there are more than one way to skin a cat ". All of the other options are a benefit to the economy.
Perhaps the fact that it takes twelve man hours to skin a cat no matter the hourly wage, the option is to use twelve hours or buy new labor saving equipment or train workers to be more efficient or stop skinning cats.
Usually they do not stop skinning cats as " there are more than one way to skin a cat ". All of the other options are a benefit to the economy.
2
I know what it means for me -- I can get married.
6
As long as there are executives, and high level managers making well over $100,000 they can find it in their budget to pay the workers more money.
8
We should've tried to start making 15/hr. the minimum wage some years ago. Because by the time it actually gets there it'll be redundant. Start pushing for 20 now for that will take at least another 10 years, at least, to reach.
Where I live, economists have determined that one needs 25 an hour TODAY.
Where I live, economists have determined that one needs 25 an hour TODAY.
8
"Where I live, economists have determined that one needs 25 an hour TODAY."
What independent non partisan support do you have for this assertion?
What independent non partisan support do you have for this assertion?
3
You mean those brilliant economists who predicted 15 out of the last 3 recessions, but missed 3 or 4 giant financial crashes?
I don't consider these predictions and theories to be of any value whatsoever.
I don't consider these predictions and theories to be of any value whatsoever.
11
This chart makes clear that the President's proposed $10.10 national minimum wage would work in every one of the top 25 cities, while a few should be in the $15 range.
Strong majorities nationally support this change. But the Congress no longer represents the majority of Americans. It represents the money interests who pay to play.
I am thinking we should look at the sports stadium model and name seats in Congress after companies they represent. Big companies would be expected to buy a whole state delegation.
Strong majorities nationally support this change. But the Congress no longer represents the majority of Americans. It represents the money interests who pay to play.
I am thinking we should look at the sports stadium model and name seats in Congress after companies they represent. Big companies would be expected to buy a whole state delegation.
12
The article makes a one great case for having states (as opposed to federal labor laws) control minimum wages. The economies of various cities are wildly different - this article only discusses large cities, and even among those samples there is a wide range of economic characteristics that would make the minimum wage more or less positive for the area. The types of industry, prices of basic goods /cost of living and real estate are other factors that would affect the impact of minimum wage. We should be allowing states (and even specific localities, like New York) to work out what would work best for themselves. A federal minimum wage hike, as is being pitched broadly, will certainly help a large constituency but it could devastate others.
4
In all these decades, there has not been one study -- not one -- following a minimum wage increase that showed harm to the economy. Not one. In fact, what studies show is that a local economy immediately benefits with each minimum wage increase. Yet, the writer doesn't mention this. The writer instead uses a very basic chart to compare proposed minimum wage increases to median wages that means ... what? Not a thing. Don't hint at possible downsides when there haven't been any-- none -- in the very long history of minimum wage increases in this country.
9
There are dozens of peer reviewed academic analysis showing raising the minimum wage has adverse impacts on employment. So you commentary is false.
http://americanactionforum.org/research/how-minimum-wage-increased-unemp...
http://americanactionforum.org/research/how-minimum-wage-increased-unemp...
11
Non partisan Congressional Budget Office (relying on peer reviewed academic research) estimated a loss of 500,000 jobs if the Federal minimum wage is raised to $10.10 an hour. There summary conclusion.
"Summary
Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly."
https://www.cbo.gov/publication/44995
"Summary
Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly."
https://www.cbo.gov/publication/44995
7
And yet, we keep on reading about these cities that raised their minimum wages, or whole states, and they are doing great economically. Seattle, New York City, the entire state of California (where they actually -gasp! - raised taxes) are all doing better than the states that did not...and are also doing a lot better than the states that cut taxes for the rich.
Oh, and a quick look at the S&P 500 index, mapped against the amount of the minimum wage shows that within 18 months after every single increase in the minimum wage, the S&P500 was up.
From this, you might infer that paying people more on the bottom rung of the ladder actually does more for the economy than helping the people on the top. Go figure.
Oh, and a quick look at the S&P 500 index, mapped against the amount of the minimum wage shows that within 18 months after every single increase in the minimum wage, the S&P500 was up.
From this, you might infer that paying people more on the bottom rung of the ladder actually does more for the economy than helping the people on the top. Go figure.
4
Mr Scheiber,
What am I misunderstanding about how you're calculating your ratios?
I would have assumed when you talk about the ratio of minimum to median, based on $15 for the minimum and in SF for instance, $25.27 for the median, that the resulting ratio would be 15 : 25.27. But that's nowhere 0.47.
You say something about a 2% annual increase in median wages, but that gets you to something like 15 : 28, still nowhere near 0.47. What's up?
What am I misunderstanding about how you're calculating your ratios?
I would have assumed when you talk about the ratio of minimum to median, based on $15 for the minimum and in SF for instance, $25.27 for the median, that the resulting ratio would be 15 : 25.27. But that's nowhere 0.47.
You say something about a 2% annual increase in median wages, but that gets you to something like 15 : 28, still nowhere near 0.47. What's up?
4
That is my question also.
"Miami... where the most recent median-wage reading is actually under $15 ($14.93), has a minimum-to-median ratio at a staggering 0.8."
Huh? Shouldn't that ratio be, 1.00 (.99533)?
Huh? Shouldn't that ratio be, 1.00 (.99533)?
This idea is nothing but political pam aimed at the low income voter.
It is not the minimum wage that is the issue, it is the fact that there are no more jobs for the greater mass of people.
When I was a boy there were untold number of storefront dress shops with immigrant women or 1st generation women sewing garments. The all belonged to the ILGWU. "Look for the union label" was the slogan in TV & Radio.
Those jobs as an example are all gone. Why? because people wanted cheeper priced goods that were available from 3rd world countries. People were not wise enough to realize that these jobs were supporting their neighbors. They bought imports and these jobs disappeared. Just one example. Same goes for small machine shops, local manufacturing. Look at Yonkers, NY. Otis Elevator, Alexander Smith Carpet Co. Blocks and blocks of factories that are now storage facilities. Every time you look at a self storage facility in an old building, just think of the hundreds of jobs that were there and are now overseas.
What were need is to bring these jobs home, but that is not going to happen because of these great free trade agreements.
It is not the minimum wage that is the issue, it is the fact that there are no more jobs for the greater mass of people.
When I was a boy there were untold number of storefront dress shops with immigrant women or 1st generation women sewing garments. The all belonged to the ILGWU. "Look for the union label" was the slogan in TV & Radio.
Those jobs as an example are all gone. Why? because people wanted cheeper priced goods that were available from 3rd world countries. People were not wise enough to realize that these jobs were supporting their neighbors. They bought imports and these jobs disappeared. Just one example. Same goes for small machine shops, local manufacturing. Look at Yonkers, NY. Otis Elevator, Alexander Smith Carpet Co. Blocks and blocks of factories that are now storage facilities. Every time you look at a self storage facility in an old building, just think of the hundreds of jobs that were there and are now overseas.
What were need is to bring these jobs home, but that is not going to happen because of these great free trade agreements.
15
Seems like the problem is that the median wages are too low. A $15 per hour minimum wage would produce much lower ratios had median wages kept up with inflation, and with increases in productivity, that occurred over the last 30+ years. Both wage figures need to go up substantially. Wake up corporate America. PS: Voters too!
8
Regardless of how much an employee costs -If a business can survive without that particular employee - then they are already doing so.
There simply are not any businesses left in the US of A that currently employ more people than the absolute minimum needed. Companies are making profits at an all-time high level, not the least because that portion of the corporate income that used to go to labor has been pared down to an irreducible minimum - by cutting salaries, gutting benefits, and reducing staffing levels to the lowest level possible that will that the corporation stay in business.
Because of this (extremely) sad fact, forcing tightwad bosses to pay more for their help is not going to put anyone out of work.
What an increase in the minimum wage WILL do, however, is get injected directly back into the local economy by the workers earning it. We might also see a reduction in the load on the taxpayers, if the new wage scales are high enough to be an actual living wage.
There are people who insist that 'but the business will be forced to increase their prices'... (since, obviously, no corporation is ever going to return to the more modest levels of profitability that were the norm 30 to 60 years ago)...to which I can only say "Fine! Then their CUSTOMERS will be paying for those workers' medical care, foodstuffs and housing, instead of the Taxpayers."
There simply are not any businesses left in the US of A that currently employ more people than the absolute minimum needed. Companies are making profits at an all-time high level, not the least because that portion of the corporate income that used to go to labor has been pared down to an irreducible minimum - by cutting salaries, gutting benefits, and reducing staffing levels to the lowest level possible that will that the corporation stay in business.
Because of this (extremely) sad fact, forcing tightwad bosses to pay more for their help is not going to put anyone out of work.
What an increase in the minimum wage WILL do, however, is get injected directly back into the local economy by the workers earning it. We might also see a reduction in the load on the taxpayers, if the new wage scales are high enough to be an actual living wage.
There are people who insist that 'but the business will be forced to increase their prices'... (since, obviously, no corporation is ever going to return to the more modest levels of profitability that were the norm 30 to 60 years ago)...to which I can only say "Fine! Then their CUSTOMERS will be paying for those workers' medical care, foodstuffs and housing, instead of the Taxpayers."
20
Your premise isn't entirely correct. To be crass, in many cases employees are just another process input (business is a numbers game). There are usually multiple ways of getting a job done. When the price goes up on an input cost (be it energy, materials, infrastructure, labor, etc.) the balance shifts and decisions are made away from that option toward another. More expensive labor is a boon to technology and automation. Slowly but surely there are job loses, not because a company was keeping around someone they didn't need. I'll let the experts debate the macro impact but the micro impact is that people will get replaced because they were beneficial at $9 but not at $15.
8
Interesting analysis .. Then perhaps the proper adjustment would be to set minimum wage to 0.6 of current median wage .. And then to use local metro inflation rate to adjust rate up on an annual basis .. Or something like that .. Could help rural areas recruit biz as they might move to obtain lower wage 'rates' .. At the very least excellent food for thought .. Thanks!
3
$7.25 an hour is equal to $14,500 a year if one works 40 hours per week. Who can live on this...ANYWHERE in America?
Nobody can.
Raise the minimum wage to a livable wage. $15 an hour is $30,000 per year, that is livable in many areas of the country.
These wages will go directly back into the economy, as opposed to being siphoned off and invested or simply stashed in off-shore accounts.
Nobody can.
Raise the minimum wage to a livable wage. $15 an hour is $30,000 per year, that is livable in many areas of the country.
These wages will go directly back into the economy, as opposed to being siphoned off and invested or simply stashed in off-shore accounts.
36
Multi-millionaires will cry out how unfair and unreasonable a $15 wage is while making $4000 an hour. Often with stock that is taxed nominally at 15%, not the 20-33% in income tax paid by working and middle classes. The wealthy have had it ONLY their way since 1981: lower taxes-income and capital gains, offshoring of good jobs, hiding income, over-valuation of the MBA that has led to the obsession with wealth and not knowledge. No wonder we are falling behind China.
26
The Perspective - "Multi-millionaires will cry out how unfair and unreasonable a $15 wage is..."
No, they will just raise the price of what they are selling so they do not decrease their profit. Enjoy that $20.00 Big Mac.
No, they will just raise the price of what they are selling so they do not decrease their profit. Enjoy that $20.00 Big Mac.
7
what about workers who make a lower wage that don't work in the food industry ? do they not deserve a living wage example workers who pick our fruit and vegetables make slave wages and no benefits . how is it decided that only food workers deserve a living minimum wage why not everyone
9
This comment board needs to think about these points:
1) a $15/hr minimum wage and a living wage are not the same thing. Even at $15 an hour for a fulltime 35 hour workweek (40 hours minus 5 unpaid hours for lunch/meals) families of 3 or more would still be eligible for food stamps in New York. So don't kid yourself - people will still be relying on subsidies.
2) Minimum wage was never meant to support a family. Even back in 1977, minimum wage was well under the poverty threshold. It was meant as a second income, or for teens. You've heard this before, and it's absolutely true. Why? Because these jobs require virtually no skills.
3) The tragedy is not that minimum wage won't support a family (yes, it should be recalibrated to catch up to inflation) but that WE ARE TRYING TO MAKE minimum wage support a family. The real crisis is the prevalence of crummy jobs while our government - both parties - lets middle income, living wage jobs walk right across our borders. And everyone who wants to tax specific low-skill industries is giving our leaders a pass on NOT addressing the core issue of an economy based on crummy jobs.
4) You will hurt one of the job-growth industries. It's no secret - those unemployment numbers have been falling largely because of an increase of service jobs, especially between 2010 and 2014. A massive minimum wage hike risks damaging the very industry - food service - that is driving down unemployment.
1) a $15/hr minimum wage and a living wage are not the same thing. Even at $15 an hour for a fulltime 35 hour workweek (40 hours minus 5 unpaid hours for lunch/meals) families of 3 or more would still be eligible for food stamps in New York. So don't kid yourself - people will still be relying on subsidies.
2) Minimum wage was never meant to support a family. Even back in 1977, minimum wage was well under the poverty threshold. It was meant as a second income, or for teens. You've heard this before, and it's absolutely true. Why? Because these jobs require virtually no skills.
3) The tragedy is not that minimum wage won't support a family (yes, it should be recalibrated to catch up to inflation) but that WE ARE TRYING TO MAKE minimum wage support a family. The real crisis is the prevalence of crummy jobs while our government - both parties - lets middle income, living wage jobs walk right across our borders. And everyone who wants to tax specific low-skill industries is giving our leaders a pass on NOT addressing the core issue of an economy based on crummy jobs.
4) You will hurt one of the job-growth industries. It's no secret - those unemployment numbers have been falling largely because of an increase of service jobs, especially between 2010 and 2014. A massive minimum wage hike risks damaging the very industry - food service - that is driving down unemployment.
31
I doubt many people are truly willing to pay more SIMPLY to subsidize a higher minimum wage. That's not to say most people would not like to see a higher minimum wage. Now, if the higher minimum wage is accompanied by a better product, there's not going to be a problem. After all, people will pay much more for a good burger than one that's simply made very quickly (compare the price of a Shake Shack cheeseburger to a Wendy's or McDonald's cheeseburger). I would also guess that employees at somewhat higher end burger places are paid a higher wage than McDonald's, Burger King, etc. But... if McDonald's raises wages to $15/hr and pushes the cost of that raise onto customers without providing a better product, it's doomed to failure. McDonald's can't sell a $5 basic cheeseburger because people can get a better burger at a competing restaurant. It's not that people hate McDonald's workers. It's just that they are not providing a product justifying a higher price. Comparing burgers to burgers, whoever is flipping the patties at higher end restaurants is also performing a more skilled task than whoever is doing it at McDonald's. The silver lining is that if low-paying, low-end fast food restaurants cannot compete, it may be that higher end places will expand to fill the void as the cheaper locations go under. Whatever jobs are lost MAY actually be regained elsewhere. The franchise owners will be ruined of course (but no one really seems to care about them anyway).
11
If the price of beef were to go up tomorrow, which is something it does quite often, and Shake Shack or McDonald's raised their prices accordingly, which is something they do quite often, would it make their hamburgers better? The answer is no. So, what would you demand an increase in quality if the price of labor were to go up and prices rose accordingly?
3
I'm not sure that's a fair comparison. Consider Spirit Airlines, a notoriously cut rate airline versus, say, Delta Airlines (I know the airlines are all a bit annoying to deal with, but trust me, Spirit is CUT RATE). Spirit Airlines is very cheap, but Delta Airlines has a much better product, for the sake of argument, k? If the price of fuel goes way up, hedging aside, both companies pass the price on to their customers and the net change between them in terms of pricing is for value received is zero. However, what if Delta is paying its employees more than Spirit (again, let's simplify this and forget that it's a unionized workforce) AND providing a better service? That means that if there is a sudden wage increase, Delta will have to raise its prices less than Spirit. This means that if you fly Spirit, you will be getting less value for your dollar than at Delta. Now when we're talking about $10 on a $600-900 ticket, maybe it's not a big deal. Shake Shack is already paying a STARTING wage of $10-11/hr, obviously McDonald's tends to be a bit lower. If we're talking about the difference between a $1 burger and a $5 or $6 burger, people are going to want to know why, if it's going to cost almost as much, they should not spend that money for a Shake Shack burger. The good news is, maybe Shake Shack IS better and deserves to live while McDonald's dies. The better restaurant can expand and replace the jobs lost. Again, small franchise owners are ruined, but hey...
1
Perhaps the Tip will once again be a matter of choice and not mandatory in order to subsidize an employee who is not making a living wage or a business's bottom line that refuses to pay a living wage. Guest can enjoy a meal without the psychological pressure to pay more.
4
$15 minimum wage equals more automation at the fast food places,higher prices,etc.
7
Since two thirds of Americans are overweight to obese, fast food being more expensive would not be a bad thing.
What used to be a once a week treat has become a once a day treat, because food prices are one of the few things that have not gone up with inflation.
What used to be a once a week treat has become a once a day treat, because food prices are one of the few things that have not gone up with inflation.
1
The real question is: are Americans prepared to pay for $15 an hour burgers and fries? If not, the fast food industry is going to take a huge hit, and the loss of lots of jobs.
9
And some other business will steal their business and take their best workers.
That is how it should be.
The fast food industry, like cable television, needs to adapt to the needs and wants of society and both are far behind the curve.
That is how it should be.
The fast food industry, like cable television, needs to adapt to the needs and wants of society and both are far behind the curve.
I for one will pay the extra 50C. Will you ?
I think that the rise of minimum wage to 15$ would greatly benefit everyone considering that the current minimum wage of around 7.30$ is not a living wage, especially for a young adult trying to deal with school and having a job without having to worry about paying large sums of student debt in the future. With a minimum wage of 15$, they would at least be able to pay off their student debts at an earlier time and it would reduce the stress put on people when they have a lot of money due. the current minimum wage also does not help pay for rent or a house unless you're juggling more than one job which just adds to stress. A higher minimum wage would benefit so many people and I don't understand why people would oppose it. Thats just basically saying that you don't want people to have a living wage.
Katie - "...considering that the current minimum wage of around 7.30$ is not a living wage,"
Minimum wage has never been the benchmark of a "living wage." It's a place where people START their working careers, hence the term minimum wage.
Minimum wage has never been the benchmark of a "living wage." It's a place where people START their working careers, hence the term minimum wage.
7
At $15/hr. both entry level and part time work for youth will disappear. If I am paying this wage I am hiring older, more mature workers with proven track records. I am not hiring an inexperienced young worker. This will especially hurt minority youth who are presently underserved in the employment market. Where will young people go to gain experience, skills and strong work habits/work ethic if entry level jobs are not available to them? Nowhere. The saying is old, yet true. The road to hell is paved with good intentions.
9
Where did they work 40 years ago, when the jobs paid minimum wage, but those wages bought much more than it does today?
The only people who are against this idea are the owners, who have been paying their workers slave wages for decades.
The only people who are against this idea are the owners, who have been paying their workers slave wages for decades.
2
The article notes a higher min. wage would have a smaller impact in relative terms in cases of high real estate costs. Higher min. wages might act as a subtle downward driver on commercial rents as business owners might demand them in certain situations given higher labor costs. So low wage workers could breathe a little bit easier, and the real estate industry would become a teensy weensy leaner.
When they earn $15.00 per hour will they get my order right?
11
Support serious improvements in public education (rather than further cuts) and they just might.
1
Will it mean that people on welfare will finally get off the dole and fend for themselves without taxpayer money? Or will there be another in a long series of excuses why welfare rolls continue to grow and public housing keeps sprouting up everywhere you look?
10
I would encourage many who are dreaming about $15/hour to instead do your homework with regard to corporate health care benefits for part time employees before you serve me that next coffee.
1
"What a $15 Minimum Wage Would Mean for your City"
To most minimum wage workers, $15 an hour sounds like a brilliant idea... and for an economically stable city, I am sure it is. But since when is it a good idea to have federal laws that apply to EVERYONE if there are very few cities that could sustain a higher wage? What about the places where work is hardly existent and the median wage is almost $15 itself? It just doesn't make sense to have this turned into a nationwide law- no matter what year it is. If the United States is ever to become an economic and work force utopia, then by all means, increase minimum wage! However, while West Virginia is still sitting at a 7.4 percent unemployment rate, let's allow minimum wage workers to gain experience and find another job if they want to make a little more. As another entry pointed out, since when is it the work forces' right to be provided with the minimum living standard? LABORERS should be making there way up, not the minimum wage.
To most minimum wage workers, $15 an hour sounds like a brilliant idea... and for an economically stable city, I am sure it is. But since when is it a good idea to have federal laws that apply to EVERYONE if there are very few cities that could sustain a higher wage? What about the places where work is hardly existent and the median wage is almost $15 itself? It just doesn't make sense to have this turned into a nationwide law- no matter what year it is. If the United States is ever to become an economic and work force utopia, then by all means, increase minimum wage! However, while West Virginia is still sitting at a 7.4 percent unemployment rate, let's allow minimum wage workers to gain experience and find another job if they want to make a little more. As another entry pointed out, since when is it the work forces' right to be provided with the minimum living standard? LABORERS should be making there way up, not the minimum wage.
1
The federal government has been increasing minimum wage hikes since the 1940s, and guess what, the country hasn't fallen to pieces. If the government didn't step in, then the government (meaning, we, the taxpayers) would be subsidizing every company out there. Corporations are living off the government dole right now -- with taxpayers making up the difference in food stamps, etc., for wages they refuse to pay their workers to be able to afford a decent meal on their table. Corporations keep their profits; we pay the bill. Why don't you get that?
1
I just wonder if increasing the minimum wage will encourage workers to improve their job skills. Things like actually listening to a customer, and how to make change of a dollar.
7
Too many High School students are still able to find summer employment. The $15 an hour wage will solve that problem.
5
The real value of much low skill labor is a lot closer to $5 than to $15. any move to pay above real value leads to gradual job loss. By allowing 30 years of destructive currency manipulation by China with no countervailing tariff we have assured ourselves of a lower standard of living over the long haul in a world where TV's are now cheaper than paint.
8
The minimum wage of $15.00 and hour is an excellent idea. However, everyone with something to sell from food to shelter; medicine and even the price of a bus ride will go up on their prices in order to get part of that $15.00. The problem is many on Social Security make less than the $15.00 liveable wage and will now have to do without the things they need. President Obama must ensure that those who are on social security and making less than the minimum wage be bought up to the liveable wage so they can purchase food and medicine as the prices increase.
I think you are confusing Social Security payments with wages. Social Security was never intended to replace income; it was meant to be a minimum of income for retired Americans.
2
Not to mention Social Security was never intended to be the sole support of a retiree, but was supposed to be part of a three-legged stool of Social Security, pensions, and personal savings.
Few people, except for public servants and union members, have pensions, but most people do have personal retirement plans.
That many people have reached retirement age without saving for retirement is unfortunate, but since the majority of their working years were during boom years, it appears they lived above their means.
Few people, except for public servants and union members, have pensions, but most people do have personal retirement plans.
That many people have reached retirement age without saving for retirement is unfortunate, but since the majority of their working years were during boom years, it appears they lived above their means.
1
Job Losses?
How about we talk about the unsustainable business model which requires a work force paid less than a living wage and reliant on Government Subsidy (Food Stamps) or "private" assistance (Soup Kitchens and Food Pantries) just for subsistence, and still falls prey to economic traps.
And don't forget the affordable housing crisis, which is getting to be a major problem in some places.
Quit publishing propaganda for right wing viewpoints until you write regularly about those issues. things Republican Legislators refuse to even admit are problems. Currently somewhere around 30-40% of the American labor force are economic serfs, with no path into the middle (working) class prosperity our society aspires to.
How about we talk about the unsustainable business model which requires a work force paid less than a living wage and reliant on Government Subsidy (Food Stamps) or "private" assistance (Soup Kitchens and Food Pantries) just for subsistence, and still falls prey to economic traps.
And don't forget the affordable housing crisis, which is getting to be a major problem in some places.
Quit publishing propaganda for right wing viewpoints until you write regularly about those issues. things Republican Legislators refuse to even admit are problems. Currently somewhere around 30-40% of the American labor force are economic serfs, with no path into the middle (working) class prosperity our society aspires to.
8
This is the wrong question. The correct question is what does having a tiny ruling hereditary aristocracy of billionaires do to our city, state and country. Our ancestors fought to get rid of the aristocrats but they have snuck back in claiming to represent the natural economic order, just as before the 18th century aristocrats claimed they too represented the natural order of man.
14
Guillotine sales are making a comeback, I heard.
4
As a business owner, I do not disagree with paying a livable wage, on one condition. The American consumer should not be able to benefit from end-runs around American wage, safety, and environmental standards by being able to buy cheap stuff from Asia were the rules are dramatically lower.
If American businesses have to pay "full value", American consumers should as well.
If American businesses have to pay "full value", American consumers should as well.
65
I couldn't agree more. I buy American made products whenever I can. That means buying fewer items but getting better quality and it means keeping my money here in the U.S. where it belongs.
If you mention the name of your business I'd be happy to become a customer if I'm in a position to do so.
If you mention the name of your business I'd be happy to become a customer if I'm in a position to do so.
2
$15 an hour minimum wage is a great way to give people more money, but also a great way to increase the standard of living. In the end, increasing the minimum wage will cause costs to increase, causing a raise in prices and people in these position will find themselves paying in close to the same position but making more money. Plus it is a great way to try to get real wages to inch up, considering they haven't moved much, overall, since the 1990s at the latest.
1
Middle class wages, inflation adjusted, have been stagnant for four decades since the Reagan Revolution, where the tax cuts for the wealthiest 1% (of which he was a member, coincidentally) were supposed to lead to more jobs and the wealth was supposed to 'trickle down' to the rest of us.
We are still waiting.
We are still waiting.
2
If I was an employer forced to pay $15 minimum to my employees, the first thing I would do is look to hire the best new, smarter, alert, more ambitious, neater, experienced employees to replace the current ones. And guess what will happen - better, formerly $14/hr employees will take a step up, and the $9 employees will be fired.
26
If you're a business owner and hiring second-rate workers, that's your problem - not the minimum wage.
Try hiring in NYC. you need to chat with owners of real service businesses before posting glib comments.
2
So you are saying that your business will do better if it pays better and can attract better employees? And what is to stop you from doing that today?
1
This kind of analysis does not give an accurate picture. Renters (most minimum wage earners rent and not own) will see increase in housing expense. I would go further and say housing units owners are among those most anxious to see a raise in minimum wage! Minimum wage earners along with others in the wage range will also be impacted due higher costs at fast food and chain outlets. If you expect that the extra income will bring greater freedoms and joys, not quite.
3
Not that I dislike seeing anyone get a fairer wage for their work, but this seems like a typical government band-aid that ignores the structural problems affecting large numbers of workers today: (1) cyclical layoffs to reduce overhead and satisfy corporate shareholders, (2) technological upheavals that have put people out of work or drastically lowered the price of a day's work, and (3) the offshoring of jobs to cheaper labor markets. I have the uneasy feeling this whole program is something politicians will use to pretend they are addressing the issues we're facing.
Not to mention the fact that a higher minimum wage could have the unintended consequence of spurring these corporations on to replace these workers with robots that much faster.
Not to mention the fact that a higher minimum wage could have the unintended consequence of spurring these corporations on to replace these workers with robots that much faster.
14
What might really happen
1) Employers will hire fewer employees thus the lines will get longer everywhere and so would be that frustrating wait for our turn to order.
2) Automation will replace actual workers at a much faster rate and uneducated workers might be the ultimate losers.
3) Cost of Fast food will no longer be affordable to the financially vulnerable.
4) Many small businesses will close as they would become nonviable.
5) Crime will increase as those legally employed fast food workers will now be jobless and potential to commit crime increases.
6) Kids will no longer get those summer jobs
1) Employers will hire fewer employees thus the lines will get longer everywhere and so would be that frustrating wait for our turn to order.
2) Automation will replace actual workers at a much faster rate and uneducated workers might be the ultimate losers.
3) Cost of Fast food will no longer be affordable to the financially vulnerable.
4) Many small businesses will close as they would become nonviable.
5) Crime will increase as those legally employed fast food workers will now be jobless and potential to commit crime increases.
6) Kids will no longer get those summer jobs
10
Wrong on all counts. This is just more crackpot wishing by a right wing alarmist:
1) Employers will hire fewer employees thus the lines will get longer everywhere and so would be that frustrating wait for our turn to order.
Wrong: When low income people earn more they will create more demand (because they spend every cent they earn) and therefore employers will need to hire additional employees to handle the increased demand.
2) Automation will replace actual workers at a much faster rate and uneducated workers might be the ultimate losers.
Wrong: This assumes that employers have robots hidden away in some secret closet that they will open at the first sign that they have to pay people a living wage. This is just a silly argument.
3) Cost of Fast food will no longer be affordable to the financially vulnerable.
Wrong: A few additional cents for a Big Mac won't dampen demand to the point where people will stop buying them. This is just another bogus argument.
4) Many small businesses will close as they would become nonviable.
Wrong: The government could provide small businesses with a tax credit to offset the minimum wage increase.
5) Crime will increase as those legally employed fast food workers will now be jobless and potential to commit crime increases.
Completely wrong: This one is too idiotic for a rational response.
6) Kids will no longer get those summer jobs
Wrong: A carve out could be made for short term temporary jobs for people under age 18.
1) Employers will hire fewer employees thus the lines will get longer everywhere and so would be that frustrating wait for our turn to order.
Wrong: When low income people earn more they will create more demand (because they spend every cent they earn) and therefore employers will need to hire additional employees to handle the increased demand.
2) Automation will replace actual workers at a much faster rate and uneducated workers might be the ultimate losers.
Wrong: This assumes that employers have robots hidden away in some secret closet that they will open at the first sign that they have to pay people a living wage. This is just a silly argument.
3) Cost of Fast food will no longer be affordable to the financially vulnerable.
Wrong: A few additional cents for a Big Mac won't dampen demand to the point where people will stop buying them. This is just another bogus argument.
4) Many small businesses will close as they would become nonviable.
Wrong: The government could provide small businesses with a tax credit to offset the minimum wage increase.
5) Crime will increase as those legally employed fast food workers will now be jobless and potential to commit crime increases.
Completely wrong: This one is too idiotic for a rational response.
6) Kids will no longer get those summer jobs
Wrong: A carve out could be made for short term temporary jobs for people under age 18.
8
Prove it. We've been subjected to these scary myths for years and none of it ever comes true.
Hard to say who is right or wrong on most of your points -no real controlled research. But on #2 you are wrong While they might not have any "hidden robots" They might have hidden plans for automation investments/off shoring that are now more feasible
1
I don't quite get the statistics. But do they obscure the real issue? Isn't this just about whether businesses--often the biggest ones--are prepared to reach slightly deeper into their pockets to pay workers at the bottom of the food chain, most often minorities, a barely subsistence-level wage? Invariably, for doing the right thing, they will "pass along" their so-called operating costs to the consumer, lest their profit margins dip ever so slightly. Wage increases, no matter how paltry, are long overdue. So are reforms in corporate compensation policies.
3
Curious as to what you mean by "reforms in corporate compensation policies." Who is going to do the reforming? These are (for the most part) private companies and the United States Government has no business telling private businesses how to run their operations. If these companies are publicly owned (on the Stock Exchange) then the shareholders should certainly know what the CEO's are earning. But as for our government, it is none of their business.
On the subject of minimum wage: I believe there should be an increase. However, I am not sure that $15.00 per hour minimum wage is sustainable. Maybe in the large metropolitan cities but elsewhere in the Country probably not.
On the subject of minimum wage: I believe there should be an increase. However, I am not sure that $15.00 per hour minimum wage is sustainable. Maybe in the large metropolitan cities but elsewhere in the Country probably not.
1
"...the United States Government has no business telling private businesses how to run their operations."
Funny, corporate America has near total control of the political process, yet they've managed to convince some that corporate managers should not have to amend their practices at the request of the government for the good of the majority the citizens.
Funny, corporate America has near total control of the political process, yet they've managed to convince some that corporate managers should not have to amend their practices at the request of the government for the good of the majority the citizens.
2
Rosie: Corporations have to have corporate charters within the communities they operate. People seem to have forgotten this, but we the people, I.e., the Government, can have a say in how corporate entities operate....if they wish to continue doing business in our communities. If not, we can revoke their charters. In theory, at least.
It is fairly clear that raising the minimum wage to $15/hour for ALL hourly wage jobs would be unsustainable in some, perhaps many, cases. It would unquestionably lead to layoffs, cuts in hours, and possibly even the closing of companies - and I'm not talking about just those companies that might do so "because they can." A small business, with a small profit margin, simply could not absorb such an increase - even some mid-sized companies might not be able to.
I believe that, if it were possible to calculate, minimum wage should be tied to a combination of (i) the profit margin of the company, and (ii) the "need" for such increases vis-à-vis the demographics of a given municipality (i.e., the more expensive the municipality, the higher the minimum wage). This would make minimum wage increases fair to all stakeholders.
I believe that, if it were possible to calculate, minimum wage should be tied to a combination of (i) the profit margin of the company, and (ii) the "need" for such increases vis-à-vis the demographics of a given municipality (i.e., the more expensive the municipality, the higher the minimum wage). This would make minimum wage increases fair to all stakeholders.
1
"It would unquestionably lead to layoffs, cuts in hours, and possibly even the closing of companies..."
This is one of the favorite scare tactics of the rich: make people afraid of change by putting out bogus arguments like this one. If a $15 minimum wage were implemented gradually (as they all are going to be), these scary things wouldn't occur and the individual who wrote this post knows that. Second, in 1993 when the minimum wage was raised to the current amount it represented a lot more than $15 in today's money and unemployment wasn't through the roof.
This is one of the favorite scare tactics of the rich: make people afraid of change by putting out bogus arguments like this one. If a $15 minimum wage were implemented gradually (as they all are going to be), these scary things wouldn't occur and the individual who wrote this post knows that. Second, in 1993 when the minimum wage was raised to the current amount it represented a lot more than $15 in today's money and unemployment wasn't through the roof.
4
U.S. GDP growth from 93-98 was significantly stronger than in the current environment. You're example doesn't hold water.
2
There were a lot fewer people on the planet in 1993. There is far more surplus labor capacity today than 20-plus years ago.
And with the UN just out with an even more dire projection for population growth -- as many as 13 billion humans by 2100 -- I don't see low-skill workers exactly gaining clout. I see people fighting for $3/hour jobs and reminiscing about the good old days when Granny earned a whopping $8 an hour AND had clean water to drink.
And with the UN just out with an even more dire projection for population growth -- as many as 13 billion humans by 2100 -- I don't see low-skill workers exactly gaining clout. I see people fighting for $3/hour jobs and reminiscing about the good old days when Granny earned a whopping $8 an hour AND had clean water to drink.
2
Forcing the fast food industry to pay arbitrarily high wages will accelerate the industry's move to fully automated restaurants, I.e. Robots doing everything.
I wouldn't be surprised if secretly the ff industry want this to happen because robots are never late, don't quit, don't steal, require no training, and are not subject to labor laws. Up until now the economics may not have made sense but soon will with the high minimum wage.
There will still be a need for some employees but far fewer than now. The irony is the companies will become far more profitable while the majority of workers will lose their jobs.
Free market works but only when it is truly free. The dogooders with their government intervention do the poor more harm than good.
I wouldn't be surprised if secretly the ff industry want this to happen because robots are never late, don't quit, don't steal, require no training, and are not subject to labor laws. Up until now the economics may not have made sense but soon will with the high minimum wage.
There will still be a need for some employees but far fewer than now. The irony is the companies will become far more profitable while the majority of workers will lose their jobs.
Free market works but only when it is truly free. The dogooders with their government intervention do the poor more harm than good.
9
I've said it before, and I'll say it again:
If you can't afford to pay your employees a living wage, then you don't have a viable business model. It is not the job of American taxpayers to subsidize your commercial failure.
If you can't afford to pay your employees a living wage, then you don't have a viable business model. It is not the job of American taxpayers to subsidize your commercial failure.
23
This argument makes no sense.
It is possible, even likely, that a small business can have a viable business model and make money while paying different employees different amounts.
Each employee's pay is based on the skills they bring to the business and the supply/demand of their labor.
Not every employee provides $15/hour of value to a business.
It is not necessary that every employee (particularly teens or young workers with few marketable skills) should be paid a "living wage".
Many of these employees are not the primary breadwinners of their families.
Requiring the business to pay $15/hour for something that does not bring $15/hour of value to the business is just a invitation to get rid of that worker.
If a worker wants to earn $15/hour, they need to *deserve* it, by bringing the right set of skills to the business. The better question is: how do we increase workers' skills most economically, not how can we force businesses to pay employees more than they are worth.
It is possible, even likely, that a small business can have a viable business model and make money while paying different employees different amounts.
Each employee's pay is based on the skills they bring to the business and the supply/demand of their labor.
Not every employee provides $15/hour of value to a business.
It is not necessary that every employee (particularly teens or young workers with few marketable skills) should be paid a "living wage".
Many of these employees are not the primary breadwinners of their families.
Requiring the business to pay $15/hour for something that does not bring $15/hour of value to the business is just a invitation to get rid of that worker.
If a worker wants to earn $15/hour, they need to *deserve* it, by bringing the right set of skills to the business. The better question is: how do we increase workers' skills most economically, not how can we force businesses to pay employees more than they are worth.
We should adopt a dynamic minimum wage county by country, set at 50% of the median salary. This will keep things balanced in each region, while preventing the minimum wage from stagnating, as it has for the past many years.
$15 per hour, why so low? An apartment in Manhattan costs an awful lot of money, god forbid unskilled entry-level workers live in (gasp!) the suburbs.
Housing is so expensive because the City's rent control scheme allows the winning families to have a below market apartment for life. People in the right place at the right time have housing so cheap they would never give it up, even after they've prospered and own a second home in Florida.
Part-timers will get cut, no teenagers will be hired and robot kiosks will replace the workers who thought they'd get $15/hour. Most businesses know the 'progressive' politicians just want someone else to pay for benefits so they can take the credit at the voting booth in November. Bah!
Housing is so expensive because the City's rent control scheme allows the winning families to have a below market apartment for life. People in the right place at the right time have housing so cheap they would never give it up, even after they've prospered and own a second home in Florida.
Part-timers will get cut, no teenagers will be hired and robot kiosks will replace the workers who thought they'd get $15/hour. Most businesses know the 'progressive' politicians just want someone else to pay for benefits so they can take the credit at the voting booth in November. Bah!
8
I never realized how simple it all is.
As always the experts pay no attention to that great group of people who already make $15 per hour. In so doing not only would you have a group that would now earn $15 an hour but you also have to increase the wages of those who already make $15 an hour.
The New York Times' reporters and economists they quote pay no attention to this yet it is something that is absolutely is of great impact two small business owners and their viability.
The New York Times' reporters and economists they quote pay no attention to this yet it is something that is absolutely is of great impact two small business owners and their viability.
4
And so your answer is for me to continue to subsidize Walmart's millionaire investors? Pathetic.
You business is not 'viable' if your workers need public support to survive.
I often hear, that jobs like walmart, fast food etc. Are entry level jobs. No, their not, not anymore. Our economy has been out sourced, these are the jobs now. The real answer is to start making things here again, but it doesn't look like that's going to happen, even the so called socialist Obama, loves trade agreements.
The only answer is to make these jobs pay more, I'm sick and tired of my tax dollars going to support the Waltons and other low wage employers.
We have to provide their employees, with food stamps, medicade and a host of other benefits. So as a guy, who is conservative on a lot of issues. I say raise that wage. We know the Republicans answer, "Let them eat cake" the Democrat answer is to do nothing about the pay, but keep giving them more Government benefits, neither plan is feasible.
The only answer is to make these jobs pay more, I'm sick and tired of my tax dollars going to support the Waltons and other low wage employers.
We have to provide their employees, with food stamps, medicade and a host of other benefits. So as a guy, who is conservative on a lot of issues. I say raise that wage. We know the Republicans answer, "Let them eat cake" the Democrat answer is to do nothing about the pay, but keep giving them more Government benefits, neither plan is feasible.
5
A local TV station is running repeats of 1970s "Let's Make a Deal" game shows and I've amused myself by plugging some of the mfg suggested retail prices into the BLS inflation calculator.
Do you think today's Americans would pay $1,000 for a four-piece set of Samsonite luggage? $4,000 for a 24" TV set? $900 for a wristwatch? $280 for an electric blanket? $1,200 for a dishwasher? $2,000 for a gas barbecue grill? $200 for four pairs of double-knit slacks? All those made-in-the-USA products cost that much in today's dollars -- that is why people were so excited to win items that we take for granted as part of a basic household now. If we want to go back to paying top dollar for these purchases, I am sure the factories employing people at union wages plus health benefits and pensions would spring right back up again.
If we want $25 DVD players and Old Navy cheapo apparel and dishwashers that cost a fraction of what they did in 1974, then good luck "making things here again."
Do you think today's Americans would pay $1,000 for a four-piece set of Samsonite luggage? $4,000 for a 24" TV set? $900 for a wristwatch? $280 for an electric blanket? $1,200 for a dishwasher? $2,000 for a gas barbecue grill? $200 for four pairs of double-knit slacks? All those made-in-the-USA products cost that much in today's dollars -- that is why people were so excited to win items that we take for granted as part of a basic household now. If we want to go back to paying top dollar for these purchases, I am sure the factories employing people at union wages plus health benefits and pensions would spring right back up again.
If we want $25 DVD players and Old Navy cheapo apparel and dishwashers that cost a fraction of what they did in 1974, then good luck "making things here again."
5
When the workers at the McDonalds near Centennial Park in Nashville, TN, can deliver an order with the correct contents, then maybe they deserve $15.00. However that's still much. Maybe $10.00/hr. Prison guards here in TN make $15.00/hour. Is working at McDonalds the same as working as prison guard? No. If McDonalds employees get $15.00, then the prison guards should get $30.00. In fact I believe if the minimum wage is artificially raised to $15.00/hr, then all wages/salaries should be raised proportionately. That's only fair. And we want to fair, don't we?
8
Isn't that the real impetus behind the movement to raise the minimum wage?
1
"When the workers at the McDonalds near Centennial Park in Nashville, TN, can deliver an order with the correct contents, then maybe they deserve $15.00."
Or maybe part of the reason they can't be...bothered to get your order right is because the fast-food caste* doesn't get paid nearly enough for this...work. Let them eat jails, you say.
Anyway, until McDs are forced (because they'd clearly never do so out of the kindness of their hearts) to pay a living wage, they can help boost morale (and service) by not making (not-so-)veiled threats to replace them with more kiosks, like http://www.bloomberg.com/news/articles/2015-08-04/we-tried-mcdonald-s-ne..., and all the money they don't spend on kioskery might even go toward other things--like, well, wages.
*Yes, "caste". The word "class" does not convey nearly as well the pervasive and lasting blow to worker opportunity that bad employers give.
Or maybe part of the reason they can't be...bothered to get your order right is because the fast-food caste* doesn't get paid nearly enough for this...work. Let them eat jails, you say.
Anyway, until McDs are forced (because they'd clearly never do so out of the kindness of their hearts) to pay a living wage, they can help boost morale (and service) by not making (not-so-)veiled threats to replace them with more kiosks, like http://www.bloomberg.com/news/articles/2015-08-04/we-tried-mcdonald-s-ne..., and all the money they don't spend on kioskery might even go toward other things--like, well, wages.
*Yes, "caste". The word "class" does not convey nearly as well the pervasive and lasting blow to worker opportunity that bad employers give.
Yeah, so let's continue to keep all of our wages flat into eternity and let the entire economy which depends on consumer spending collapse. That'll be the victory we all deserve.
So, the cities with lots of high income people can afford this. No surprise. This argues for more high income people. It also points out the fact that bringing in tons of low skill immigrants is a problem, particularly when there are high skill immigrants who would like to come. Finally, having lots of kids while working minimum wage jobs is a problem. Whatever the minimum wage, you should be delaying kids and honing your skills so you can get a better job and then have kids.
5
I wonder what the asking price for minimum wage is going to be in 20 years from now? $25, perhaps? What about 30 years from now? My money is on the robots!
lulu.com/michaelclayton
lulu.com/michaelclayton
3
The minimum wage in 1968 was worth about $10 in 2012 dollars and the economy didn't collapse. Why are you afraid tha it if goes up gradually to $15 that we will have armegeddon?
1
Who's gonna fix the robot though, my money is on a $100 per hour technician.
We are talking about the mathematics and ignoring the basic social issues pertaining to low wages mainly no or little educated children and youth who has no future both economic or social. ( Chicago and its neighboring Indiana areas is a great example )
Also we are not calculating the cost of running medicaid and bother social programs for the destitute group without again any plan for them to come out of it.
I guess as a society we have managed to keep a huge part of the disapora who get used to Govt and Church and local pantry provided "help" and they in turn feel less ashamed to use food stamps to buy luxury products which they really got used to. They are not to be blamed.
We as a society to get the blame and more so the Corporations that manage to keep them there with meager wages and get "cheap" labor in return and that remain cheap for more than 200 years now .. first via Indentured servitude and now as economic downtrodden !
Also we are not calculating the cost of running medicaid and bother social programs for the destitute group without again any plan for them to come out of it.
I guess as a society we have managed to keep a huge part of the disapora who get used to Govt and Church and local pantry provided "help" and they in turn feel less ashamed to use food stamps to buy luxury products which they really got used to. They are not to be blamed.
We as a society to get the blame and more so the Corporations that manage to keep them there with meager wages and get "cheap" labor in return and that remain cheap for more than 200 years now .. first via Indentured servitude and now as economic downtrodden !
1
Our government is allowing hugee companies making billions in profits to pay slave wages. This is wrong. On top of that, our economy is barely functioning due to the fact that too few people have money to spend, even on basic living needs.
An economy shouldn't be a game of "survival of the fittest".
An economy needs to be designed to allow for a stable society and culture.
America's god is money, built on a foundation of greed, corruption, and and selfishness.
Most countries in the world work on the same formula - a few at the top have the lions share of the money, and the rest get by as best they can.
The U.S. Is no better, and in many cases worse.
How many homeless people does it take to create a billionaire?
An economy shouldn't be a game of "survival of the fittest".
An economy needs to be designed to allow for a stable society and culture.
America's god is money, built on a foundation of greed, corruption, and and selfishness.
Most countries in the world work on the same formula - a few at the top have the lions share of the money, and the rest get by as best they can.
The U.S. Is no better, and in many cases worse.
How many homeless people does it take to create a billionaire?
15
The fast food industry has two important economic externalities that the free market is not able to effectively manage: (1) half of the workers receive government assistance and (2) the low nutritional value of the food (along with poor eating habits in general) increase the cost of society's spending on healthcare for those patrons. From an economic standpoint, a necessary role for government intervention in markets is to help best control for market externalities.
To that end, the tipping point is NOT the point at which wage growth begins to hamper or erode job growth as some here suggest. It IS the tipping point at which individual businesses may escalate complaints to their local elected representatives. But the REAL tipping point, the point to limit the needed government intervention, is a function of both a diminishing labor demand from employers AND diminishing returns on externalities such as poverty amongst that class of workers. In other words, the loss of some fast food jobs may be undesirable to the affected individuals, but you want to find the point where that harm is still outweighed by (1) the effect of wage growth amongst the remaining workers and (2) diminished reliance by those workers on government assistance programs.
I have limited sympathy for the success of a business model that is entirely dependent on what some have described as subsistence wages. But to be sure, this is a tough problem and the solution could easily be misapplied.
To that end, the tipping point is NOT the point at which wage growth begins to hamper or erode job growth as some here suggest. It IS the tipping point at which individual businesses may escalate complaints to their local elected representatives. But the REAL tipping point, the point to limit the needed government intervention, is a function of both a diminishing labor demand from employers AND diminishing returns on externalities such as poverty amongst that class of workers. In other words, the loss of some fast food jobs may be undesirable to the affected individuals, but you want to find the point where that harm is still outweighed by (1) the effect of wage growth amongst the remaining workers and (2) diminished reliance by those workers on government assistance programs.
I have limited sympathy for the success of a business model that is entirely dependent on what some have described as subsistence wages. But to be sure, this is a tough problem and the solution could easily be misapplied.
3
The problem being ignored by this discussion, and in most discussions, is the hollowing out of the middle. While I'm not against raising wages for those at the bottom, the problem is the loss of jobs in the middle, the good industrial jobs that for a variety of reasons have disappeared and not been replaced by anything comparable. Yes, there are a lot more service sector jobs now, but those either are low wage and low skill, or office jobs that require a college degree that many can't afford to get. Trying to make up for the lost middle by raising wages for fast food workers is not likely to be sustainable in terms of employment not being adversely affected, and in terms of these workers being able to obtain the middle class life that Detroit auto workers used to have. We, as a nation, need to create a new middle and provide the training necessary for the workers.
14
The 'rising tide that lifts all boats' has to come from the bottom, not the top, as it only works if everyone has a boat.
Not the same size boat, but at least a life boat.
50% of the population does not have even that, while the .01% has yachts the size of the Queen Mary, with unused life boats aplenty.
Not the same size boat, but at least a life boat.
50% of the population does not have even that, while the .01% has yachts the size of the Queen Mary, with unused life boats aplenty.
1
So fast food employees are paid not through private enterprise but through city taxpayers? I never knew that. Before anyone starts looking at raising the minimum wage & what it would mean for your municipality, look at the profits these conglomerates make in one quarter & then sharpen your pencils. More importantly, will anyone remember the numbers crunched 10 years from now when they can't remember what they had for dinner last Thursday?
1
So the left wants to expand benefits for the poor and deride those same benefits as corporate subsidizes. Not every job is intended to be a full time "living wage" job. Some are entry level positions for part time, young and unskilled workers to obtain work experience and begin progressing in there careers. Those people will have fewer jobs (requiring even more government assistance for them) as they are replaced by higher skilled people and technology. This is s total job killer for the young and unskilled.
5
Raising the minimum wage for fast food workers must be the 1 percenters favorite anti-poverty program. Since 1 percenters seldom eat at McDonalds, it costs them nothing. Instead of raising income taxes on the rich to help the working poor, raising the minimum wage for fast food workers shifts the burden to other working poor and the middle class.
13
Isn't it justice if the people pushing the increase in the minimum wage bear its consequences?
Both should be done.
And it is the .001% who owns companies like McDonald's and Walmart.
FYI: The six heirs to the Walmart fortune have a net worth as much as nearly half of all American households.
And it is the .001% who owns companies like McDonald's and Walmart.
FYI: The six heirs to the Walmart fortune have a net worth as much as nearly half of all American households.
1
This isn't a reply to the post I clicked on - that was the only way to get the text-box to reopen. This is a note for the moderator or perhaps the author. I just sent a note a moment ago asking how the ratio was calculated. I now see that the graph gives median figures much higher than those in the article. Also higher than predicted by a 2% growth rate in the median for 5 years; or for 6 (as might be expected if the medians quoted were a year old). So I'm kind of assuming that the issue is that the quoted medians are from 2010. I think perhaps that should be mentioned somewhere in the fine print, maybe on the graph. If that's not the case, I think someone should check the math.
1
Interesting, but as the author suggests in the example of Los Angeles, the structure of an area's economy, business costs and jobs matter too. I would say that the current minimum also matters - e.g., a city with a current minimum of $13 is not going to feel a bump to $15 the way a city with a $7 minimum will.
4
People who believe a $15 min wage would put an end to "taxpayer subsidies of businesses" via food stamps and the like might want to think again.
Other than a tiny bit of a food stamps for the truly destitute, all of these "taxpayer subsidies of low-wage" jobs go to people who have chosen to have children despite their inability to command an adequate salary. Childfree low-wage workers get pretty much nothing.
At $30,000 a year (assuming she could get full-time work at $15/hour) a single parent with a couple of kids would still be eligible for many thousands of dollars a year in taxpayer funded subsidies including WIC, SNAP, maybe TANF, Section 8, Medicaid, about $5,000 handout via the Earned Income Tax "Credit," a $1,000/kid child tax "credit," dependent care credit, the USDA school nutrition program, early-childhood education subsidies and more. In my neck of the woods, free bus passes and discounted electric, gas and water bills too. All paid for by productive net taxpayers.
The root of the problem is not wages, it's people having kids they can't afford instead of spending their teens, 20s and 30s improving themselves, getting skills training or education and otherwise boosting their value to prospective employers. If we continue to reward willy-nilly reproduction by the people least prepared to be good parents, we're going to continue to grow an underclass and all the artificial wage controls in the world won't really ameliorate any of the associated problems.
Other than a tiny bit of a food stamps for the truly destitute, all of these "taxpayer subsidies of low-wage" jobs go to people who have chosen to have children despite their inability to command an adequate salary. Childfree low-wage workers get pretty much nothing.
At $30,000 a year (assuming she could get full-time work at $15/hour) a single parent with a couple of kids would still be eligible for many thousands of dollars a year in taxpayer funded subsidies including WIC, SNAP, maybe TANF, Section 8, Medicaid, about $5,000 handout via the Earned Income Tax "Credit," a $1,000/kid child tax "credit," dependent care credit, the USDA school nutrition program, early-childhood education subsidies and more. In my neck of the woods, free bus passes and discounted electric, gas and water bills too. All paid for by productive net taxpayers.
The root of the problem is not wages, it's people having kids they can't afford instead of spending their teens, 20s and 30s improving themselves, getting skills training or education and otherwise boosting their value to prospective employers. If we continue to reward willy-nilly reproduction by the people least prepared to be good parents, we're going to continue to grow an underclass and all the artificial wage controls in the world won't really ameliorate any of the associated problems.
55
Public assistance aside, there has always been an "underclass" that has kids young and has trouble providing for them. That is one of the reasons that those enlisting in the military require assistance, including food stamps - they tend to marry younger, are right out of high school, have kids without having built up a nest egg or have the tenure that commands a higher salary.
1
True, but at $30,000 a year, rather than today's current $15,000 a year, many minimum wage workers will have at least some disposable income and since consumerism is what our economy is based on, it will help the economy overall.
As tiresome as it is to see generation after generation of women have children they cannot afford and live on the dole, it has to be accepted that some people will always take advantage of others and will always be a burden to society. We do not have to like it, but there is nothing we can do about this, as Americans are not willing to see children go hungry on the streets.
Increasing the minimum wage is not going to help the freeloaders amongst us, but it will help the working class person who wants to work and move into the middle class and that is who this wage increase would help.
As tiresome as it is to see generation after generation of women have children they cannot afford and live on the dole, it has to be accepted that some people will always take advantage of others and will always be a burden to society. We do not have to like it, but there is nothing we can do about this, as Americans are not willing to see children go hungry on the streets.
Increasing the minimum wage is not going to help the freeloaders amongst us, but it will help the working class person who wants to work and move into the middle class and that is who this wage increase would help.
So, when you are supporting your kids on $70K per year, and the boss calls you in and tells you that your new assignment is to train the people in Brazil (or India) that will be doing your job next month, and by the way - don't let the door hit you......and you find that every other job that your education qualifies you for has also been sent overseas.....and you end up working minimum wage because that is all that is out there....just what are you supposed to do with the kids that you had when you were making good money?
The idea that boosting your value to an employer will give you some kind of economic security is a fantasy - a fantasy propagated by people who are either ignorant of reality or are willfully denying it. In this country today the smartest thing that a person can do to assure economic security is to choose wisely the people that will birth and raise them.
The idea that boosting your value to an employer will give you some kind of economic security is a fantasy - a fantasy propagated by people who are either ignorant of reality or are willfully denying it. In this country today the smartest thing that a person can do to assure economic security is to choose wisely the people that will birth and raise them.
In more than one European country McDonald's has kiosks where you punch in your order, which gets transmitted to the "cooks". You pay at the kiosk with a credit/debit card.
The only interaction with a worker occurs when your number is called and they hand the order over to you.
The only interaction with a worker occurs when your number is called and they hand the order over to you.
6
As it currently stands, taxpayers are subsidizing the substandard wages of workers with public assistance while CEOs and board members rake in millions. That is not capitalism, it's greed pure and simple. Additionally, workers living paycheck to paycheck can ill afford to purchase the goods and services that will keep our economy afloat. Remaining on this course and paying slave wages has costs, too. What is known is that large income inequality has a destabilizing effect that historically, has brought down empires. So taking the risk of increasing minimum wages for all workers seems a much less risky venture by comparison.
33
Back in the 1930's the US was run by plutocratic oligarchs that were smarter than the ones we have today....they saw that a living wage was a solid deterrent to social and economic and political upheaval, so they allowed it to be required by law.
There are a few billionaires saying that we need to address income inequality, before the people on the bottom start looking for torches and pitchforks. Apparently, they would rather ride in a Tesla than a tumbril. We need more rich people to wise up.
There are a few billionaires saying that we need to address income inequality, before the people on the bottom start looking for torches and pitchforks. Apparently, they would rather ride in a Tesla than a tumbril. We need more rich people to wise up.
I definitely agree with the article that minimum wage should be raised appropriately based on geography. However, I have an issue with the fact that the raise that we are all talking about is over double the current amount. We are talking about very low-skilled jobs here. If everyone would open up one of their intro to economics textbooks, they will see that in most of them, the author(s) describe minimum wage jobs were primarily for young adults/teenagers. There are so many potential careers in the United States that are severely lacking in a proper workforce. What we need in this country are less barriers for people in order to acquire training for a useful skill/trade. Personally, I work as an intern at a major New York law firm. I currently make $15 an hour. And I can easily say that the work/skills that are required at my job is at a completely different level than the skills required at a minimum wage job, like a fast food restaurant or retail store. Double the current minimum wage is warranted for my kind of job. So, my primary concern is if the minimum wage jobs in fast food joints are increased to $15 an hour, then what will happen to all other jobs that are for the aspiring-professional like myself? As a person that graduated a high ranking college and with plans of going to law school, i would feel uncomfortable being paid the same amount as a person working in Macdonalds. There must be others with similar concerns out there...Right?
8
A minimum wage increase would raise other wages, say, not quite doubling yours and even less of a percentage increase the higher the salary, going to zero increase at some level and perhaps a negative increase for the CEO.
1
Yes, that's the obvious textbook reaction. But, my main concern is whether in practice, these higher skilled jobs with hourly wages would begin to hire less and fire more due to an unwillingness to pay that much? I apologize if i didn't make that clear in my previous post.
Ask or demand a raise if you feel demeaned by making the same as a McDonald's worker.
3
Minimum wage jobs are typically filled by immigrants and dreamers. Restricting immigration will decrease the worker supply and wages will naturally adjust to accommodate worker demand. The current Democratic policy is to let everybody in and then mandate an articial minimum wage. Historically the minimum wage is about equal to the cost of a McDonald's value meal. Increase it to $15 an hour and that's what a typical burger, fries, and coke will cost you.
4
Actually Ed, minimum wage jobs are filled by people trying to pay their rent, retirees, people who didn't plan to be retirees but were given the opportunity anyhow, college students trying to reduce debt, as well as immigrants and dreamers. More and more, minimum and just above minimum service entry level jobs are all that exist for recent college grads and people re-entering the workforce. We'd all prefer it to be different, but there you are.
"Increase it to $15 an hour and that's what a typical burger, fries, and coke will cost you."
As well it should. Have you ever seen "the real cost of a hamburger"? Let's start with the 2,000 gallons of water or 20 pounds of grain needed for a pound of beef. Where does that come from?
As well it should. Have you ever seen "the real cost of a hamburger"? Let's start with the 2,000 gallons of water or 20 pounds of grain needed for a pound of beef. Where does that come from?
1
A law can not magically create value. Just because a law says an clerk at McDonald's is worth $15 an hour, does not mean it is the case.
The counter attack will be largely what Wendy's revealed in its Q2 earnings call - reduction in numbers of employees and rapid transition to kiosk-based services and other automated operations.
Goodbye, fast food jobs.
The counter attack will be largely what Wendy's revealed in its Q2 earnings call - reduction in numbers of employees and rapid transition to kiosk-based services and other automated operations.
Goodbye, fast food jobs.
7
Well, a law can magically create "political value," particularly among the less-informed and less critical thinkers in our voting populace today.
5
NY Prof Emeritus writes: A law can not magically create value. Just because a law says an clerk at McDonald's is worth $15 an hour, does not mean it is the case.
By the same logic, shouldn't we question whether CEOs are worth the absurd amounts they're paid simply because they pack their boards with cronies who reward them with overstuffed pay packages?
By the same logic, shouldn't we question whether CEOs are worth the absurd amounts they're paid simply because they pack their boards with cronies who reward them with overstuffed pay packages?
Kiosks do not pay taxes...nor consume any goods. Who will be left to buy things...like Wendy's food, if we quit supporting American workers?
2
Those who lament our inability to pay a nationwide living wage would do well to realize that the cost of living varies along with the median income. A $15/hr wage might be just enough to scrape by in Seattle, but it affords a comparatively luxurious lifestyle in Oklahoma City. I would know: I was making $15/hr in Oklahoma City three years ago -- and, compared to my friends, I lived like a king.
10
Interesting story. What I get out of the numbers, is that cities like L.A.,Miami, Chicago, with heavy tourist trades may very well go to no tip policies or added service fees to afford the raise to minimum wage. Another item to consider is online delivery services like Grubhub, Eater, L.A. Bites, etc. Some already tack on a 15% gratuity fee to the delivery charge- that is likely to increase with the raise in minimum wages.
Math and economic models aren't necessary to demonstrate the sustainability of a living wage. All you have to do is go back a few years to when the minimum wage kept pace with inflation.
The real question is not whether to raise the minimum wage, but why it has been allowed to remain flat.
The only "problem" created by a living wage is the existence of a middle class.
The real question is not whether to raise the minimum wage, but why it has been allowed to remain flat.
The only "problem" created by a living wage is the existence of a middle class.
6
You are confused. The minimum wage has never been a living wage, whether it kept pace with inflation or not. Minimum was $2.30 in Illinois when I started full-time work in 1979. My wage was $3.20/hr and even that ($480/mo after tax) would have been impossible to get by on. It was not uncommon back then to start above the minimum at entry-level because candidates that showed promise were far more difficult to come by. The problem today is supply - too many uneducated workers for too few jobs will keep wages low. Stem the tide of entry-level workers and the minimum wage will rise on its own - simple supply and demand.
I can't see it passing in Georgia. Too many fast food places, thousands of them-- maybe tens of thousands of them in the State. Too many small town Dollar Generals, too.
Next, too much agriculture. Do they get the minimum wage, too? Besides, they're anti-union, anti-worker.
Next, too much agriculture. Do they get the minimum wage, too? Besides, they're anti-union, anti-worker.
1
I'm look forward to seeing different states try this. One of the benefits of having 50 independent states is that it allows for experimentation so we can see what actually happens, as opposed to just listening to the arguments between experts. Isn't that how science works?
Kansas tried cutting taxes in the hope that it would increase tax revenue. It didn't work. Now we know. Not everyone wants to hear the facts if it goes against their ideology, but there are enough curious citizens who do.
The founding of this country was a great experiment. Let's continue this important tradition.
Kansas tried cutting taxes in the hope that it would increase tax revenue. It didn't work. Now we know. Not everyone wants to hear the facts if it goes against their ideology, but there are enough curious citizens who do.
The founding of this country was a great experiment. Let's continue this important tradition.
6
Anything less than a living wage is slavery. Simple. Deal with it.
17
"Slavery" ??!
Did someone forcibly make someone take that less-than-living-wage job?
What you get paid (or are able to get paid) is truly what your productivity is worth. That goes for minimum wage workers as well as the Silicon Valley software programmers getting paid six figures to the professional athletes that get paid 6/7/8 figures to play ONE game of a kid's sport.
If you were worth more, you could get paid more. Simple. Deal with it.
Did someone forcibly make someone take that less-than-living-wage job?
What you get paid (or are able to get paid) is truly what your productivity is worth. That goes for minimum wage workers as well as the Silicon Valley software programmers getting paid six figures to the professional athletes that get paid 6/7/8 figures to play ONE game of a kid's sport.
If you were worth more, you could get paid more. Simple. Deal with it.
5
Define "living wage." Own dwelling or roommates? Filet or beans & rice? Name-brand new apparel or thrift-store? Smartphone?
How many dependents should it support? Should it cover health insurance, education, retirement savings, travel and recreation, utilities, personal care and sundries, food, clothing, shelter and telecommunications subscriptions for all of them? Transportation -- bus or own car? New car or used?
Unless you can get very specific about what constitutes a "living" and who gets to decide, clamoring for "a living wage" is pretty pointless.
How many dependents should it support? Should it cover health insurance, education, retirement savings, travel and recreation, utilities, personal care and sundries, food, clothing, shelter and telecommunications subscriptions for all of them? Transportation -- bus or own car? New car or used?
Unless you can get very specific about what constitutes a "living" and who gets to decide, clamoring for "a living wage" is pretty pointless.
6
The system as a whole forced them to take that job--or starve, homeless. That seems pretty coercive to me. Or do you suggest that people who can't get jobs paying more than the minimum wage have some other option to survive in a capitalist society?
Slavery.
Slavery.
2
As people comment on this article, if they are FOR increasing the minimum wage by decree and law to $15/hr, it would be incredibly enlightening to also state:
1) Do you currently own or run a business where you employ minimum wage workers?
2) If you do, and $15/hr becomes the law, how do you plan to absorb the increased labor cost?
Let's put the rubber to the road - be specific with real-life examples.
(As for me, I grew up in a family-owned mom-and-pop business, and if we had to deal with $15/hr minimum wages today, we would just have to raise all of our prices accordingly and start the wage-and-price-inflation dominoes a-fallin'...)
1) Do you currently own or run a business where you employ minimum wage workers?
2) If you do, and $15/hr becomes the law, how do you plan to absorb the increased labor cost?
Let's put the rubber to the road - be specific with real-life examples.
(As for me, I grew up in a family-owned mom-and-pop business, and if we had to deal with $15/hr minimum wages today, we would just have to raise all of our prices accordingly and start the wage-and-price-inflation dominoes a-fallin'...)
5
True. I see cooking healthy food at home finally, possibly, becoming a reality rather than spending $30 for a fast food meal. So, a net loss of jobs there.
1
All the talk focuses on fast food workers, but I'm curious about how it will play out with everyone else. For example, in Houston, making $20.00/hr is considered alright - it's not great, but it's not bad. And it's a lot better than most. So - if, for example, they raised the minimum wage to $15.00 an hour, how much will they raise everyone else? Someone who was making almost three times the minimum wage is now not even making double. Will their salary suddenly spike as well? I, for one, would not be alright with suddenly only making slightly more than the minimum wage. How does all that work out?
7
It's what I would call the falling domino theory of artificial price-and-wage inflation, Francis. Everyone up the line would then demand to be paid more and guess what? Employers would all then have to raise the prices of their goods and services to cover the increased labor costs, so no one really comes out ahead in the end.
In fact, as at least one other commenter (a 72-year old one) has noted - for those people like seniors and others on a fixed income, they would all be hurt because they would not get "raises" as the prices of goods and services all around them went up to cover this artificial minimum wage increase.
In fact, as at least one other commenter (a 72-year old one) has noted - for those people like seniors and others on a fixed income, they would all be hurt because they would not get "raises" as the prices of goods and services all around them went up to cover this artificial minimum wage increase.
4
actually, someone does come out ahead in the end. if someone formerly making $7.50 an hour now makes $15, their income has risen 100%. Since labor is roughly 1/4 of the cost of a fast food meal, the price of that meal would rise 25% (1/4 of the 100% increase in labor cost). This person now has much greater spending power, but the price of a fast food meal has only risen a relatively small amount. And, because the minimum wage applies to all fast food restaurants in a given market, all restaurants would increase their prices simultaneously, limiting the extent of shifting due to competition. Meanwhile there are many people living in a community who now make $7.50 more per hour and, therefore, have hundreds of dollars more to spend in that community, which is good for the overall economy.
'Seniors' are a far richer segment of the population that the younger generations and they do get COLA adjustments on their Social Security benefits.
I'm curious. Did the author or does research consider at all WHO gets these higher paying minimum wage jobs? Do employers, since they're paying more, seek out better qualified workers, say those with a knowledge of English or even higher education?
In short, does the higher minimum benefit those we typically think of as having these lower wage jobs--high school drop outs and immigrants--or do employers replace these with more educated and skilled workers?
In short, does the higher minimum benefit those we typically think of as having these lower wage jobs--high school drop outs and immigrants--or do employers replace these with more educated and skilled workers?
7
It's very simple: If you're not making your living off of capital investments, you are part of labor and should be fighting vigorously to better the interests of the labor class.
People talk like capitalists are some sort of endangered species and wages are what will drive them to extinction. If a company can't handle pressure from labor for a fair, reasonable wage, I can guarantee another entrepreneur will come along and try to do it instead. If fast food restaurants were to all close shop nationwide tomorrow over $15, does anyone honestly think someone else wouldn't come along and fill that consumer need pretty much instantly?
People talk like capitalists are some sort of endangered species and wages are what will drive them to extinction. If a company can't handle pressure from labor for a fair, reasonable wage, I can guarantee another entrepreneur will come along and try to do it instead. If fast food restaurants were to all close shop nationwide tomorrow over $15, does anyone honestly think someone else wouldn't come along and fill that consumer need pretty much instantly?
99
Your analysis is a little too simplistic.
Fast food restaurants wouldn't "all close shop nationwide tomorrow over $15," but you'd better believe they will find a way to stabilize and minimize their variable labor costs. Think: looking at more automation and self-service.
Notice all of those "order-and-pay-at-your-table" terminal devices at your local sit-down casual restaurants lately? Sure, the automated info gathering speeds some ordering and payment processes as wells as gathering sales metrics directly, but you know it's got to be decreasing the amount of human waitstaff that's necessary, too, don't you?
When people start to articifically price themselves out of the market by demanding more than the productivity they're bringing to the table, you will see more and more technological and automation displacement of these low-skilled workers. And then what are you going to do with them?
Fast food restaurants wouldn't "all close shop nationwide tomorrow over $15," but you'd better believe they will find a way to stabilize and minimize their variable labor costs. Think: looking at more automation and self-service.
Notice all of those "order-and-pay-at-your-table" terminal devices at your local sit-down casual restaurants lately? Sure, the automated info gathering speeds some ordering and payment processes as wells as gathering sales metrics directly, but you know it's got to be decreasing the amount of human waitstaff that's necessary, too, don't you?
When people start to articifically price themselves out of the market by demanding more than the productivity they're bringing to the table, you will see more and more technological and automation displacement of these low-skilled workers. And then what are you going to do with them?
3
Exactly, with the added benefit of the fact that if fast food was not so cheap, perhaps the two thirds of overweight to obese Americans would not eat junk food so often.
2
What makes you think that if a fast food restaurants can't make the numbers work today, that someone will magically make them work tomorrow? It is exactly that kind of magical thinking that permeates leftist economic theory, which is why it fails again and again (see Venezuela, Greece, Cuba, USSR, etc.)
And before you mindlessly tout Sweden, it might be useful for you to consider that WE carry the burden of defending Sweden - and the rest of Europe - and it is WE who carry the burden of keeping the world's shipping lanes open. The entire E.U. military budget is only one third more than the U.S. spends on its navy alone. Those are enormous cost that amount to a subsidy to European Democratic Socialists. As it is said: Socialism works great as long as you don't run out of other people's money.
And before you mindlessly tout Sweden, it might be useful for you to consider that WE carry the burden of defending Sweden - and the rest of Europe - and it is WE who carry the burden of keeping the world's shipping lanes open. The entire E.U. military budget is only one third more than the U.S. spends on its navy alone. Those are enormous cost that amount to a subsidy to European Democratic Socialists. As it is said: Socialism works great as long as you don't run out of other people's money.
I'm a little surprised the article didn't go into an obvious (possible) reason why this ratio may be an effective a way to gauge the resilience of the local economy to a minimum wage increase. I'm in the Seattle area and as our minimum wage approaches $15/hour I'm wondering what those who make $16/hour will feel? Surely they won't be happy making $16... $1/hour above minimum when just a few years earlier they were making $6/hour above minimum.
For cities with a 50% - 60% ratio this provides a cushion --- far enough from the median --- that the actual median won't have to change much as a result. However, LA with an $18/hour median will undoubtedly see its median rise significantly as a result of the minimum becoming $15. In other words... these job losses when the ratios are out of whack... are they from employers reluctant to hire minimum wage workers or are they from losses higher up the wage ladder?
For cities with a 50% - 60% ratio this provides a cushion --- far enough from the median --- that the actual median won't have to change much as a result. However, LA with an $18/hour median will undoubtedly see its median rise significantly as a result of the minimum becoming $15. In other words... these job losses when the ratios are out of whack... are they from employers reluctant to hire minimum wage workers or are they from losses higher up the wage ladder?
1
If those that are already making significantly over the current minimum wage begin to whine when those below are brought up to a decent wage then they are going to kill the initiative and provide corporate opponents with additional ammo. Better they should take the long view and not cave in to base resentment. More money in everyone's pocket means less potential public subsidies, more product demand and perhaps a stronger business climate. And oh, yes, the good feeling that comes with thinking of someone other than yourself. Considering that wages have stagnated for so long, the time will come when your wage rises as well, perhaps at your next annual review.
Germany's minimum wage of EUR 8.50 came into effect in January this year. Before then there was no minimum wage except for a few branches of the economy where the government declared the wages agreed on by unions and employers to be mandatory also for those employers that didn't bargain with the unions. So it's way too early to see what effects the minimum wage has on employment.
2
This data is about cities. I'd assume the ratios would be even more job-destroying in rural and exurban areas with lower cost of living.
A more effective minimum wage strategy for the whole country would be to mandate a minimum wage at 50% of the median wage for a state, or for defined regions or large urban areas. There is no way a single minimum wage can ever be optimal for a continent-sized country of 300 million people.
A more effective minimum wage strategy for the whole country would be to mandate a minimum wage at 50% of the median wage for a state, or for defined regions or large urban areas. There is no way a single minimum wage can ever be optimal for a continent-sized country of 300 million people.
4
The 'tipping point' where the wage increase costs jobs (and hurts workers) must be recognized. The NY Times has pushed for this wage increase on 'ideological grounds' so it is nice to see economists weighing in on the 'true costs and benefits' to workers based upon the ratio to the median wage in a city. I prefer facts over beliefs.
12
"The wide variation in minimum-to-median ratios does seem to recommend some variation when raising the minimum wage."
Yeah - we have a technical term for that phenomenon: we call it free market forces.
Yeah - we have a technical term for that phenomenon: we call it free market forces.
2
I find fault with arguments that are based on median anything because that means is basically an average . 1 person making 1 million dollars can offset a million people making much much less. as I remember correctly , the "average" working person salary across the nation was about 26K last year or so. Great if you live in West Virginia but not so good if you live in california.
raising the minimum wage for people who flip burgers to $15 does what for the guy who went to college ?Did that person then suddenly merit a raise because the floor salaries are raised or did that person just take a hit?
What we need are more rent controls, price controls, because after 72 years on the planet, my observation is that when there are wage increases, everything will go up to take those raises away, and put them into someone else's pocket. That will impact everyone who didn't get that raise--seniors included, especially seniors on fixed incomes.
raising the minimum wage for people who flip burgers to $15 does what for the guy who went to college ?Did that person then suddenly merit a raise because the floor salaries are raised or did that person just take a hit?
What we need are more rent controls, price controls, because after 72 years on the planet, my observation is that when there are wage increases, everything will go up to take those raises away, and put them into someone else's pocket. That will impact everyone who didn't get that raise--seniors included, especially seniors on fixed incomes.
1
@dve, who writes, "Median is basically an average".
Median is NOT an average. Mean is the average. Median is that point at which half or above and half below--it doesn't reflect how MUCH above or below. So your example of one person making $1 million actually doesn't apply.
This is an important distinction, because the rest of your analysis is flawed by it. Median is actually a highly accurate way to characterize numbers with a broad spread, such as wages in a city with great income disparity.
Median is NOT an average. Mean is the average. Median is that point at which half or above and half below--it doesn't reflect how MUCH above or below. So your example of one person making $1 million actually doesn't apply.
This is an important distinction, because the rest of your analysis is flawed by it. Median is actually a highly accurate way to characterize numbers with a broad spread, such as wages in a city with great income disparity.
9
The math is rather confusing. But median doesn't mean average. In the average you take all of the numbers and add them up and divide by the number of people so that a person making $1,000,000 in hour we greatly change the average. The median is made by counting the number of people and taking the middle person and seeing what his or her income is. So a person making $1,000,000 in our wouldn't change the number very much at all. I hope this helps. You could Google the 2 words, median and average, maybe Google would do a better job than I can of explaining it. Just remember that median and average are different and they measured different things.
In fact, you've just described the reason we use the median. The median isn't the average (mean)--it's the number in the middle of the pack. So if the person on top gets another million dollars, it actually doesn't move at all--the middle-ranked person's income, or median, is the same.
2
The best thing about this is that it's a tax that I can avoid.
When the state-mandated wage increases lead (as they inevitably shall) to price increases, I can simply cease to purchase the products in question.
Goodbye fast food!
This whole debate simply ignores the fact that some labor is not worth $15/hr.
When the state-mandated wage increases lead (as they inevitably shall) to price increases, I can simply cease to purchase the products in question.
Goodbye fast food!
This whole debate simply ignores the fact that some labor is not worth $15/hr.
6
Rises in wages do not precipitate rises in prices. There is no way that retailer knows that you have more money in your pocket so he can change prices accordingly.
Matty, have you ever run a business before?
If a retailer charges more after being forced to increase to a $15/hr minimum wage, it's not because he thinks you have more money in your pocket - he's charging more to cover his (arbitrarily legislated) increased labor costs.
How exactly do you think retailers cover their increased costs to stay in business - i.e., when their rent or utility bills go up? They're going to have to raise their prices!
If a retailer charges more after being forced to increase to a $15/hr minimum wage, it's not because he thinks you have more money in your pocket - he's charging more to cover his (arbitrarily legislated) increased labor costs.
How exactly do you think retailers cover their increased costs to stay in business - i.e., when their rent or utility bills go up? They're going to have to raise their prices!
2
You are correct, and some "labor" isn't worth 20 million a year.
"Worth" becomes slippery when you are talking about people at the bottom of the stack. If we acknowledge that we need people to clean our offices and bathroom, flip burgers, and work in child-care centers, how about paying a "living wage?" By a living wage, I mean just eating, paying rent plus the basic bills to keep you off the street, not buying a car, saving money everyone month or sending your kid to college (god forbid, that a wage slave might be able to afford that). Not everyone can or has the ability to work a fast food or child-care job while they study to be a IT technician.
"Worth" becomes slippery when you are talking about people at the bottom of the stack. If we acknowledge that we need people to clean our offices and bathroom, flip burgers, and work in child-care centers, how about paying a "living wage?" By a living wage, I mean just eating, paying rent plus the basic bills to keep you off the street, not buying a car, saving money everyone month or sending your kid to college (god forbid, that a wage slave might be able to afford that). Not everyone can or has the ability to work a fast food or child-care job while they study to be a IT technician.
1
This is a bit simplistic as it ignores the effect on specific groups, those depending on Social Security as a model for one. This SS group is experiencing inflation on items not captured by the CPI indexes. For them, the pleasure of going out to eat occasionally is limited to fast food restaurants.
With targeting increase in wages either the prices or availability will be impact their use, along with eventually super market costs. Let's not ignore that when the minimum goes up, the salary of supervisors and ancillary workers must increase. If these jobs are seen as plumbs, and have any kind of "tenure" this creates its own problem, such as cronyism in hiring which compounds the additional cost to owners.
All of the cost of this minimum wage increase will not be taken from the plutocratic owners.
AlRodbell.com
With targeting increase in wages either the prices or availability will be impact their use, along with eventually super market costs. Let's not ignore that when the minimum goes up, the salary of supervisors and ancillary workers must increase. If these jobs are seen as plumbs, and have any kind of "tenure" this creates its own problem, such as cronyism in hiring which compounds the additional cost to owners.
All of the cost of this minimum wage increase will not be taken from the plutocratic owners.
AlRodbell.com
2
Increasing the minimum wage in certain areas makes sense. For the federal government to have a blanket minimum does not. Why should the minimum wage in Montana be the same as it is in Dallas? It shouldn't. The federal government should stay out of the minimum wage debate and it should be up to local governments to determine what makes the most sense in their region.
5
I would concur the federal government should and has since 1938 establish a national minimum wage and that wage needs to be tied to inflation if only to avoid years of stagnation followed by the silly repetitive debate about raising it. I would also argue that the base federal minimum should be at a level that places a full time worker at that wage level above the point of needing taxpayer subsidized support alternatively any company paying below that level of support should be on the hook for the cost of taxpayer support. In addition there should be clear authority to pay a higher minimum wage in high cost areas just like MacDonalds charges higher prices in New York than elsewhere. What I do find missing from the discussion is an analysis of what raising the minimum wage would do in $s to the cost of say a Big Mac while holding other cost and profit factors stable. If for example the cost increase is $0.25 who cares but if it's $1.25 maybe I care.
2
Fox news reported yesterday that there was a decline of 1000 fast food workers in Seattle due to the Minimum wage increase. Reality often differs from academic studies. Logic suggests that business owners will reduce expenses where possible and that there is a limit to consumers accepting price increases. Certainly workers need reasonable increases but there will certainly be consequences like automation and job attrition in some low margin industries. Economics 101 texts suggest this outcome . Stay tuned.
4
Any (small or big) business owner doesn't even need Econ 101 to know this, Jim. It's plain common sense.
However, I would bet dollars to donuts that most of the proponents for the $15/hr minimum wage never owned or ran a business themselves, and don't know there is such a thing as having to eke out a profit to stay in business - and yes, be able to keep their employees working.
However, I would bet dollars to donuts that most of the proponents for the $15/hr minimum wage never owned or ran a business themselves, and don't know there is such a thing as having to eke out a profit to stay in business - and yes, be able to keep their employees working.
4
Interesting that the flagship Seattle paper -- the Seattle Times, owned by a conservative -- hasn't reported any such job losses. In fact, right-wing talk show rumors of job losses have been vigorously debunked:
http://www.seattletimes.com/seattle-news/local-facts-no-match-for-nation...
http://www.seattletimes.com/seattle-news/politics/truth-needle-is-15-wag...
http://www.seattletimes.com/seattle-news/local-facts-no-match-for-nation...
http://www.seattletimes.com/seattle-news/politics/truth-needle-is-15-wag...
5
I think I'll wait for other more objective sources using real and not cherry picked data from a somewhat longer time frame to weigh in. Fox News is no more reliable in its own way than other right or left sources.
3
One other factor to consider, labor substitution. At a given price, who is going to get hired? The higher wage allows for selection better qualified employees. Current low skilled mix will tip toward the the likes of under-employed, over-qualified college students, perhaps living subsidized lives at home. Assuming both groups are motivated workers.
Also, outside the tourist trade or unique locations, low paying fast food jobs are often in low income neighborhoods. It is those neighborhood's patrons who will pay for the increased wages. Is the community, on an all-in basis, better off: the worker gets more but the consumer pays more. No new wealth occurs, only a transfer of wealth. Neither good nor bad, just is.
Also, outside the tourist trade or unique locations, low paying fast food jobs are often in low income neighborhoods. It is those neighborhood's patrons who will pay for the increased wages. Is the community, on an all-in basis, better off: the worker gets more but the consumer pays more. No new wealth occurs, only a transfer of wealth. Neither good nor bad, just is.
"Where is the point at which job loss risk exceeds the benefit to workers? There is some evidence that cities and states have managed to absorb increases when the minimum wage is in the neighborhood of 50 percent of the median"
Economists with their head in the clouds. I always laugh when the latest economic report comes out and the phrase "more than expected" or "less than expected" makes its inevitable appearance. The point at which job loss exceeds the benefit to the worker is determined by one thing - when does it cost the employer more to have the worker than what the worker produces. Decreasing automation costs make that even more problematic. A couple of days ago Wendy's discussed possible automation plans to simply replace large numbers of these workers. Instead of trying to make flipping burgers a middle class job, people with burger flipping jobs need to work their way up or get an education.
Economists with their head in the clouds. I always laugh when the latest economic report comes out and the phrase "more than expected" or "less than expected" makes its inevitable appearance. The point at which job loss exceeds the benefit to the worker is determined by one thing - when does it cost the employer more to have the worker than what the worker produces. Decreasing automation costs make that even more problematic. A couple of days ago Wendy's discussed possible automation plans to simply replace large numbers of these workers. Instead of trying to make flipping burgers a middle class job, people with burger flipping jobs need to work their way up or get an education.
3
Instead of risking unemployment and/or inflation by raising the minimum wage, I think it would be better policy to increase taxes and provide more social welfare programs (subsidized housing, transportation networks, medical care, food safety programs, public spaces). Then let wages be set by market forces.
1
Wages are set by the supply and demand for labor, but since both political parties have turned the immigration spigot on full blast for more than four decades, at the behest of their corporate donors, who want to keep wages low, the concept of a 'free market' does not apply.
4
So the government (i.e. all taxpayers) should subsidize large companies so the higher wages do not affect their bottom lines?
2
"Wages are set by the supply and demand for labor"
Ha! There's a good one. Maybe in a textbook perfect world they are, but that would mean that in reality CEO wages are set by the demand for them to sit on your board and do nothing.,
Ha! There's a good one. Maybe in a textbook perfect world they are, but that would mean that in reality CEO wages are set by the demand for them to sit on your board and do nothing.,
1
Why is it that politicians, academics, researchers, reporters, and other talking heads (even commenters here!) never seem to have any actual experience running a business where they have to balance the real-life costs and revenues and try to eke out a profit?
They seem to always miss out on the simple fact that if you arbitrarily raise your labor costs artificially (i.e., by fiat and not due to any real increase in productivity), you're going to either:
A) Raise your prices to cover the increased labor costs, or
B) Keep your prices the same and find some way to squeeze it out of those "excess" profits you've been squirreling away
And yes, for those who decry the obscene excess compensation paid to CEOs, etc. - and I agree much of that, especially the annual raises with no basis in actual direct management impact - well, yes, maybe there is some truth that there is some "squeezability excess" in reserve that can be tapped as mentioned in scenario B above, but for the great majority of small business in America, that just ain't so.
So, enough with all of the sideline theorists already - how about some ACTUAL small business owners stepping up and commenting on how raising the minimum wage to $15/hr is so much the right - and realistic - thing to do?
They seem to always miss out on the simple fact that if you arbitrarily raise your labor costs artificially (i.e., by fiat and not due to any real increase in productivity), you're going to either:
A) Raise your prices to cover the increased labor costs, or
B) Keep your prices the same and find some way to squeeze it out of those "excess" profits you've been squirreling away
And yes, for those who decry the obscene excess compensation paid to CEOs, etc. - and I agree much of that, especially the annual raises with no basis in actual direct management impact - well, yes, maybe there is some truth that there is some "squeezability excess" in reserve that can be tapped as mentioned in scenario B above, but for the great majority of small business in America, that just ain't so.
So, enough with all of the sideline theorists already - how about some ACTUAL small business owners stepping up and commenting on how raising the minimum wage to $15/hr is so much the right - and realistic - thing to do?
15
If you cannot pay your workers a living wage, you do not have a viable business plan.
And, yes, companies like McDonald's and Walmart should raise their prices to cover the increased labor costs. Better that than the taxpayer's make up the difference with food stamps.
And, yes, companies like McDonald's and Walmart should raise their prices to cover the increased labor costs. Better that than the taxpayer's make up the difference with food stamps.
81
Why should they raise prices? The millions they rake in already isn't enough?
1
When did paying wages for any particular job or work get tied automatically to a guarantee (or "right") that those wages had to provide for a minimum living standard?
Look back into your own family's history - for most of us, somewhere along the line, one or more of our forebears came over as a poor immigrant with little to no language skills and maybe no marketable skills other than his or her physical labor to sell.
How many of our forebears (or us, actually) have had to work more than one job at one time or another in our lives to make ends meet? When did it become the employers' obligation to ensure that they were paying us enough to be able to live the lifestyle we desired? They were paying what they considered the job or work to be worth, and if we didn't like it (and if we had more marketable skills and experience) we would go elsewhere to work.
Somehow in this overly-PC society, we have taken the INDIVIDUAL RESPONSIBILITY out of the equation again. If a person is only able to qualify to get a minimum wage job, whose responsibility is that? (And I'm not talking about any developmentally-challenged cases here.)
Education level isn't always what is chaining people to minimum wage employability - I would gladly take a minimum wage worker who has a great work ethic, is responsible, conscientious, willing to learn, and willing and able to take on more complex and responsible tasks and promote that person out of the entry-level minimum wage job pool.
Look back into your own family's history - for most of us, somewhere along the line, one or more of our forebears came over as a poor immigrant with little to no language skills and maybe no marketable skills other than his or her physical labor to sell.
How many of our forebears (or us, actually) have had to work more than one job at one time or another in our lives to make ends meet? When did it become the employers' obligation to ensure that they were paying us enough to be able to live the lifestyle we desired? They were paying what they considered the job or work to be worth, and if we didn't like it (and if we had more marketable skills and experience) we would go elsewhere to work.
Somehow in this overly-PC society, we have taken the INDIVIDUAL RESPONSIBILITY out of the equation again. If a person is only able to qualify to get a minimum wage job, whose responsibility is that? (And I'm not talking about any developmentally-challenged cases here.)
Education level isn't always what is chaining people to minimum wage employability - I would gladly take a minimum wage worker who has a great work ethic, is responsible, conscientious, willing to learn, and willing and able to take on more complex and responsible tasks and promote that person out of the entry-level minimum wage job pool.
26
Why not peg the minimum wage to the cost of living in each community? I wonder if that would be possible.
3
I would imagine they don't do that out of fear of an exodus from areas that have a lower minimum wage.
1
Perhaps some of those prison workers in upstate NY could be replaced with a more diverse work force that would be interested in those good paying, middle class jobs. The displaced prison workers could then take jobs at McDonald's and Walmart and see how they like that! Ha!
1
A higher minimum wage will have no effect on employment as far as employers running with fewer employees. Every successful business knows that it's top controllable cost is labor. They already run with the minimum number of employees.
It might have one possibly unforeseen effect. Higher sales because of higher quality employees. Right now the minimum wage is so low that good workers can't afford to even consider fast food jobs. You can't pay your bills with that wage.
Let me give you an example. You head to a fast food drive through and the cars are backed up so you keep going. The manager is judged by their labor cost so they keep a minimum wage person on the register and a minimum wage person expediting the order. Neither of whom are doing the job well. If the two employees are higher quality and doing their jobs well you don't lose those sales.
It might have one possibly unforeseen effect. Higher sales because of higher quality employees. Right now the minimum wage is so low that good workers can't afford to even consider fast food jobs. You can't pay your bills with that wage.
Let me give you an example. You head to a fast food drive through and the cars are backed up so you keep going. The manager is judged by their labor cost so they keep a minimum wage person on the register and a minimum wage person expediting the order. Neither of whom are doing the job well. If the two employees are higher quality and doing their jobs well you don't lose those sales.
14
Brian
You are ignoring the fact that labor can be replaced by technology. If you don't think jobs will be lost as the cost of labor rises, while the cost of technology falls, I suggest you have a discussion with a fast-food ordering kiosk, Amazon website, an ATM, or an Easy-Pass toll both.
You are ignoring the fact that labor can be replaced by technology. If you don't think jobs will be lost as the cost of labor rises, while the cost of technology falls, I suggest you have a discussion with a fast-food ordering kiosk, Amazon website, an ATM, or an Easy-Pass toll both.
5
The biggest change will be trying not to yell at the robots who have replaced all the $ 15 an hour workers when they get my fast food order wrong. But on the bright side if I do yell at them I won't feel bad for hurting any of their "feelings".
10
The obvious huge problem with this analysis is that it does not and cannot factor in future disruptive technology.
1
I don't understand the obsession with "$10" or "$15". Why not do an "inflation plus" wage? So CPI+2% (or even higher)
Over 10-years, if inflation remains in a -2% to +2% zone, the minimum wage will outgrow the cost of living by 20-30%.
That smoothens the effect on businesses and addresses inequality effectively, albeit more gradually. In addition, a $15 minimum wage will need to be increased at some point, or income inequality will again deteriorate, as has happened over the past couple of decades.
Over 10-years, if inflation remains in a -2% to +2% zone, the minimum wage will outgrow the cost of living by 20-30%.
That smoothens the effect on businesses and addresses inequality effectively, albeit more gradually. In addition, a $15 minimum wage will need to be increased at some point, or income inequality will again deteriorate, as has happened over the past couple of decades.
5
If the minimum wage had been indexed to inflation, as it should be, it would be about $13 an hour and all other wages would rise accordingly, not just the wages of the .01%, which are indexed to only the board member's whims.
2
A fast food job, or entry retail job, is not supposed to be a career. The worker needs to get experience, continue with education and training, and seek other employment, not stagnate. This ability to progress has been stymied by tax laws and corporate policies that have moved millions of jobs that would be the next step in a healthy economy to other countries where they are cheaper, and no longer available for stepwise progress in America.
The solution isn't a higher minimum wage, but a more rounded, robust economy, promoted and protected by all of us, rather than shipping our future out of the country.
The solution isn't a higher minimum wage, but a more rounded, robust economy, promoted and protected by all of us, rather than shipping our future out of the country.
34
As long as you aren't arguing against ANY minimum wage (which you might), the question is what should it be. Even if fast food or entry-level retail isn't meant to be permanent, it should at least be livable. The current minimum makes it impossible to pursue further education, etc.
But more to the point -- and it is one on which perhaps we partly agree -- because of the lack of good jobs, many people MUST take a minimum wage job, and they may have families to support. While we are waiting for a better economy -- and since service jobs can't be shipped overseas, why make people suffer? People do better in the long run when they can make ends meet. A $15/hr worker is much MORE likely to leave a fast-good job for something better than a $7.25/hr one, who is more likely to get stuck just trying to get by.
But more to the point -- and it is one on which perhaps we partly agree -- because of the lack of good jobs, many people MUST take a minimum wage job, and they may have families to support. While we are waiting for a better economy -- and since service jobs can't be shipped overseas, why make people suffer? People do better in the long run when they can make ends meet. A $15/hr worker is much MORE likely to leave a fast-good job for something better than a $7.25/hr one, who is more likely to get stuck just trying to get by.
2
It may make sense to let the local economic climate dictate the mandatory minimum wage. But in every case, it should be a living wage. If the cost of living is higher or lower in some cities, then it makes sense that the living wage might vary across the country.
We should also address the permanent part time worker issue. Any worker who is employed for more than, say, 6 months should be automatically converted to full time. Or to say it another way, the employer should only be allowed a small percentage of workers, say 10%, to be part time. The rest should be full time workers with a living wage and basic benefits like paid leave for illness and some minimum vacation.
We should also address the permanent part time worker issue. Any worker who is employed for more than, say, 6 months should be automatically converted to full time. Or to say it another way, the employer should only be allowed a small percentage of workers, say 10%, to be part time. The rest should be full time workers with a living wage and basic benefits like paid leave for illness and some minimum vacation.
4
It seems to me that the entire concept of the minimum wage is rooted in the political argument that employment should be associated with a minimum of human dignity and should not lead to abject poverty. Therefore, it seems that accounting for actual cost of living should be at least a part of how the minimum wage floor is set, though that is easier said than done. However, just going by median wages reflects the local economy, the skill distribution of employees, and the local labor market, but does not take any actual relative costs of living into account.
7
Raise the federal minimum to $13 an hour and index it to inflation. All other wages will rise according, putting more money in the hands of consumers.
The US economy is 75% consumer-based and the .01% cannot buy enough yachts to make up for the fact that 50% of the population has no disposable income.
The US economy is 75% consumer-based and the .01% cannot buy enough yachts to make up for the fact that 50% of the population has no disposable income.
82
"All other wages will rise according, putting more money in the hands of consumers."
You seem to be missing something here. Wages are not going to arbitrarily increase like this without PRICES rising as well. That is an economic fact. So more money will be in the hands of consumers, but that money will be worth less. End result: a circular process where nothing has changed.
You seem to be missing something here. Wages are not going to arbitrarily increase like this without PRICES rising as well. That is an economic fact. So more money will be in the hands of consumers, but that money will be worth less. End result: a circular process where nothing has changed.
3
Why should minimum wages be the same in Montana as San Francisco? Why do people always look to the federal government for help? Minimum wages should be set by states and cities (that know the local economies best), not by Washington DC.
24
It's NOT a "fact." Prices are not gauged to who makes what wage.
Two conflicting thoughts, and I'm not sure how to reconcile them:
1) We're all subsidizing, to one extent or another, those who do not make whatever constitutes a living wage in one's given geography. Those are "hidden" costs and we really need to make them more transparent. (I am not saying "get rid of them.")
2) The race will most certainly be on to replace low-wage earner humans with kiosks and/or robots wherever possible. I've already personally "interacted" with one at JFK airport; the net of it is that much of the burden of ordering and paying shifts to the consumer. Next time I will either eat somewhere else or go hungry.
1) We're all subsidizing, to one extent or another, those who do not make whatever constitutes a living wage in one's given geography. Those are "hidden" costs and we really need to make them more transparent. (I am not saying "get rid of them.")
2) The race will most certainly be on to replace low-wage earner humans with kiosks and/or robots wherever possible. I've already personally "interacted" with one at JFK airport; the net of it is that much of the burden of ordering and paying shifts to the consumer. Next time I will either eat somewhere else or go hungry.
22
American business has been pushing costs out to the consumer (or the the community as a whole) for over a century. Consider how grocery stores used to be operated...with a clerk who got everything for you, and packed it up. Then came supermarkets, where the consumer picked up the merchandise, and now we have self-checkouts, where the consumer scans the merchandise and pays for it themselves.
This process of pushing out costs to the consumer is not going to be slowed by paying substandard wages.
This process of pushing out costs to the consumer is not going to be slowed by paying substandard wages.
When comparing to European countries, include the value of their mandated benefits in the calculations.
21
Also include their staggering high taxes, and VAT on every single purchase.
2
And include their more rational defense budgets which allow them to spend more of their taxes on actual people.
2
@DaveD - While US taxpayers pay for their defense.
We should give it up, and let ISIS invade Europe. We'll see how they handle it.
We should give it up, and let ISIS invade Europe. We'll see how they handle it.
1
I see a major fault in this study. The assumption made was that wages would grow by 2% evenly. However, we know the minimum wage has a significant affect on wages in the lower earnings ranges in general.
Raising the minimum wage forces the wages of jobs that had been slightly higher than the previous minimum to rise as well.
Take an example of the MW at $10 and an employer paying his/her staff at $12. The company felt it necessary to pay 20% higher than the MW to attract and maintain the quality of employee required to run the business. Perhaps the job requires more training. Perhaps the work is harder.
If the MW is raised to $15, that company will have to choose whether to give up offering a wage higher than the minimum or respond by raising their wages, perhaps to $18 (the same minimum plus 20%) .
That is why economists predict that raising the MW would help around 20 million people, even though only around 5 million would be directly affected by the law.
It is therefore inaccurate to use a flat 2% in all cities, since those cities with lower median wages will see significantly more upward wage pressure. The likely outcome is a ratio that remains much more stable than the one predicted in this article as the median wage grows faster in cities where it was lower.
Raising the minimum wage forces the wages of jobs that had been slightly higher than the previous minimum to rise as well.
Take an example of the MW at $10 and an employer paying his/her staff at $12. The company felt it necessary to pay 20% higher than the MW to attract and maintain the quality of employee required to run the business. Perhaps the job requires more training. Perhaps the work is harder.
If the MW is raised to $15, that company will have to choose whether to give up offering a wage higher than the minimum or respond by raising their wages, perhaps to $18 (the same minimum plus 20%) .
That is why economists predict that raising the MW would help around 20 million people, even though only around 5 million would be directly affected by the law.
It is therefore inaccurate to use a flat 2% in all cities, since those cities with lower median wages will see significantly more upward wage pressure. The likely outcome is a ratio that remains much more stable than the one predicted in this article as the median wage grows faster in cities where it was lower.
17
And, of course, those workers making more are not going to be socking their new wages into accounts in the Caymans, they are going to be spending it in the local economy, which will drive up demand, which will cause more businesses to hire more people.
The minimum wage here is about $11/hr (the exact price depends on currency fluctuations). Every fast food worker, like every other worker, has health insurance, paid vacation, sick leave, maternity/paternity benefits, disability, and retirement. New-style GMO's are all but banned and antibiotics are not allowed in healthy farm animals. With all these awful restrictions McDonald's are packed (and significantly tastier). Each store has lots of workers, not unlike the US, and I read the French McD's have the second highest profitability in the world after the US.
Forget the argument this only works in big expensive cities: there are lots of McDonald's in medium and even small villages, scattered all over the country. American's should stop buying the corporate hype: $15/hr. may be too high for some areas but the alternative -- low wages with no vacation, no sick leave, no healthcare, and no disability -- is ridiculous.
Forget the argument this only works in big expensive cities: there are lots of McDonald's in medium and even small villages, scattered all over the country. American's should stop buying the corporate hype: $15/hr. may be too high for some areas but the alternative -- low wages with no vacation, no sick leave, no healthcare, and no disability -- is ridiculous.
158
How's the French economy doing overall? From what I have read, they are not too far behind Greece and Italy in terms of budget issues.
4
France has unemployment over 10%, with youth (under 25) unemployment of 23%.
4
Just to be clear, the French unemployed also get a stipend for their vacation. In case they got too tired looking for jobs that are not available. And how many of your young graduates, educated at taxpayers expense, work in London, the U.S., or Canada, leaving the taxpayers on the hook? That is Socialism. Socialists have a huge problem: they never learn that one has to grow the pie in order to redistribute it.
3
Excellent research and analysis, Mr. Scheiber. Great (and sobering) work. It does seem very clear that the minimum wage, certainly the anemic federal one, is not at a level where we have to worry about possible nasty economic side effects. Professor Reich's honesty is very refreshing and the evidence does suggest places like Miami, Florida would struggle, perhaps mightily, if ordered to adopt a $15 minimum wage in five years time. This is a very difficult issue because many of us want to believe and accordingly enact policies that say, "We're all in this together," which was a big part of the rationale for Social Security, Medicare, the PPACA, etc. The minimum wage, however, doesn't exactly work the same way because living costs can vary so widely in the US, even if it was put into law for many of the same reasons. A $12.50 or $13 federal minimum wage law to take effect in 2020 sounds like a suitable compromise, allowing the more affluent high-median wage cities to continue to set their own standards, but protecting those who live in other locales, too.
4
One great aspect of this article is it explains why a federal minimum wage would be a disaster, having more adverse effects on some parts of the country than others. Yet what it doesn't do is explain the theory behind why a lower minimum-to-medium ratio is a positive thing. (This is simply something posited by a small subset of economists.) Readers should consider: If a lower ratio is better for workers, then why would raising the minimum wage help them, since (ceteris paribus) raising the numerator raises the ratio itself?
The best long term solution to helping unskilled workers is increasing the capital stock (physical and human) so that they will be more productive, and yes, there is well-developed economic theory that supports this point. Forcing firms to pay unskilled workers in excess of their productivity simply ensures their employers will have to let them go, eventually. In the fast-food industry, these policies are ushering in an era of iPad ordering and even more self-service, while providing perverse incentives to firms to favor capital over labor. Why go there?
The best long term solution to helping unskilled workers is increasing the capital stock (physical and human) so that they will be more productive, and yes, there is well-developed economic theory that supports this point. Forcing firms to pay unskilled workers in excess of their productivity simply ensures their employers will have to let them go, eventually. In the fast-food industry, these policies are ushering in an era of iPad ordering and even more self-service, while providing perverse incentives to firms to favor capital over labor. Why go there?
5
automation and overpopulation has killed jobs all over the world, Illegal lmigration are at the highest in europe, is there a fix ?? i don't think so
1
A job that does not pay a living wage with decent benefits hurts society because the rest of us have to pay the difference between the poverty wage and what it actually takes the employee to live. Rent subsidies, food stamps, health subsidies are all taxpayer subsidies to business. As a side note, it is interesting how CEO's who need double digit annual raises making tens to hundreds of millions yearly can apparently not survive on last year's salary, but the worker is supposed to live on a minimum wage that pays the same inflation adjusted wage as in the '60's.
Why not give a living wage a shot and see what happens? You know, real life experience rather than pure conjecture and guesswork. What's the worse that could happen?
If our economic model is unable to pay everyone a living wage with decent benefits it is time to move on to something else. We have already figured out how to give CEO's huge pay raises, now it is time to include the workers who actually make products and provide services.
Why not give a living wage a shot and see what happens? You know, real life experience rather than pure conjecture and guesswork. What's the worse that could happen?
If our economic model is unable to pay everyone a living wage with decent benefits it is time to move on to something else. We have already figured out how to give CEO's huge pay raises, now it is time to include the workers who actually make products and provide services.
183
Sure, but we should tie increases in the minimum wage to decreases in rent subsidies, food stamps, etc. Otherwise, all we are going to do is have the cost of the increased wage AND the cost of these social welfare programs.
8
I disagree with QED. If the wage rise so that the workers no longer need the subsidies, then the funding needed for those subsidies will go down. Therefore the cost to taxpayers of the subsidies will go down.
2
If, with an increase in wages -- minimum, or otherwise, a worker remains within the parameters for rent subsidies, food stamps, etc., then why the cry for decreasing such benefits? "Minimum wage" does not equal "living wage"; and, by the time NYC's $15/hour minimum wage kicks-in (2018), it'll be 'goornisht mit goornisht'.
1
Some day in the future, people will look at this "right" as absolutely obvious, that people need a reasonable wage. Future generations will look at us and wages they way we now look at slavery and women's voting rights.