The minimum wage increase: The good, the bad, the unknown

[Freewill]

I am not disagreeing with you but wouldn't an increase in wages and the obvious resultant inflationary pressure hurt the poor even more?

Some of the poor, yes, because they would see hours cut, some job losses and slower hiring at the low end.

This will be a trade-off, and the betting is that the more liquid economy will ultimately create more jobs in the long run.
.

Again, how does a company cut hours and stay in business? The implication is that companies are just keeping people employed because they are cheap, is this true?

I am not arguing with you I really just don't see that happening.

Well, it depends on the economics of the business. Some businesses can get away with it through increased productivity, some would have to introduce automation, some would have to scale back/revise operations overall.

We're talking about a wide spectrum here, because businesses all have different percentages of workforces that would be affected, and different percentages of payroll vs. other costs.
.

Again, not arguing just discussing. Your first paragraph, why wouldn't a company be doing those very things regardless of the MW?

Take yourself for example, or at least what I think. You have an office I assume with a secretary. I assume your secretary makes something over the MW. Now we can assume she/he (must be PC) serves a function. If nothing else screens your calls because you are busy all day with clients, or posting on Internet web sites.

Let's just say she makes 2 dollars over the MW which is 10 dollars. MW is raised to 15 dollars meaning she now has receive a 20 percent wage increase. Where does that 20 percent come from?

Yep, fair points.

It's essentially a domino effect: Regardless of where a business is on the efficiency scale, they'll all do the same thing: First they'll look at ways to increase productivity, from software to automation to simply expecting employees to do more in the same amount of time (and there will be a LOT of that). Once they've determined what that accomplishes, next they'll look at operational efficiency, i.e., various internal systems. Then maybe they'll look at streamlining or eliminating redundant or lower-profit products and services. Maybe squeeze vendors a bit more. Then they'll have to look at hours, layoffs and/or slower hiring.

Career tip: I'll bet there will be a surge in demand for business efficiency consultants!

And also remember, I don't think we'd see that immediate jump all the way. Businesses would have some time to absorb incremental increases.
.

If I were a cold hearted industrialist I would be already doing everything you say.

Efficiency experts have been around for years, seldom do they have a big impact over the long haul. That was my experience. At my place of employment they had an efficiency "expert" come in. What he basically ended up doing is making us a slave to a schedule he created that made us schedule 120 percent. Which doesn't work out when people call off sick or emergent work. Took about 1 year until we went back to business as usual. I am sure it cost the company big money. Nice guy though.

 

[Mac1958]

Some of the poor, yes, because they would see hours cut, some job losses and slower hiring at the low end.

This will be a trade-off, and the betting is that the more liquid economy will ultimately create more jobs in the long run.
.

Again, how does a company cut hours and stay in business? The implication is that companies are just keeping people employed because they are cheap, is this true?

I am not arguing with you I really just don't see that happening.

Well, it depends on the economics of the business. Some businesses can get away with it through increased productivity, some would have to introduce automation, some would have to scale back/revise operations overall.

We're talking about a wide spectrum here, because businesses all have different percentages of workforces that would be affected, and different percentages of payroll vs. other costs.
.

Again, not arguing just discussing. Your first paragraph, why wouldn't a company be doing those very things regardless of the MW?

Take yourself for example, or at least what I think. You have an office I assume with a secretary. I assume your secretary makes something over the MW. Now we can assume she/he (must be PC) serves a function. If nothing else screens your calls because you are busy all day with clients, or posting on Internet web sites.

Let's just say she makes 2 dollars over the MW which is 10 dollars. MW is raised to 15 dollars meaning she now has receive a 20 percent wage increase. Where does that 20 percent come from?

Yep, fair points.

It's essentially a domino effect: Regardless of where a business is on the efficiency scale, they'll all do the same thing: First they'll look at ways to increase productivity, from software to automation to simply expecting employees to do more in the same amount of time (and there will be a LOT of that). Once they've determined what that accomplishes, next they'll look at operational efficiency, i.e., various internal systems. Then maybe they'll look at streamlining or eliminating redundant or lower-profit products and services. Maybe squeeze vendors a bit more. Then they'll have to look at hours, layoffs and/or slower hiring.

Career tip: I'll bet there will be a surge in demand for business efficiency consultants!

And also remember, I don't think we'd see that immediate jump all the way. Businesses would have some time to absorb incremental increases.
.

If I were a cold hearted industrialist I would be already doing everything you say.

Efficiency experts have been around for years, seldom do they have a big impact over the long haul. That was my experience. At my place of employment they had an efficiency "expert" come in. What he basically ended up doing is making us a slave to a schedule he created that made us schedule 120 percent. Which doesn't work out when people call off sick or emergent work. Took about 1 year until we went back to business as usual. I am sure it cost the company big money. Nice guy though.

Yeah, "consultants" are often people who couldn't keep a steady corporate job, truth be told.


.

 

[Mac1958]

And just to make things as ambiguous and confusing as possible:

Three studies of L.A. minimum wage boosts reach different conclusions


.

 

[Conservative65]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

 

[Conservative65]

You forgot to mention a couple of the negatives likely to occur with an increase in the MW.

One...it will result in higher unemployment of those unskilled, because many small business owners will not be able to afford the higher wage costs.
Two...it will result in higher use of automation, in an effort to eliminate or reduce the high cost of labor...resulting in yet more unemployment for the unskilled.

A higher MW is a jobs killer, but in America today good intentions far outweigh the facts.

If I owned a small business the first thing I do is hold a company meeting announcing the raise in minimum wage.
the second thing I do is tell Pedro that I have to let him go because of it.....

There you have it Libs!

Reality.....ain't it a bitch...

Several (fill in the blank with names) would be gone. Those that had proven to be better employees would get to stay, get a raise, and be expected to perform at a higher level. The end result would be the same bottom line as currently exists.

 

[Seawytch]

Minimum Wage Mythbusters

Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt restaurants.

Not true: In California, employers are required to pay servers the full minimum wage of $9 per hour — before tips. Even with a 2014 increase in the minimum wage, the National Restaurant Association projects California restaurant sales will outpace all but only a handful of states in 2015.



Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would lead to restaurant job losses.

Not true: As of May 2015, employers in San Francisco must pay tipped workers the full minimum wage of $12.25 per hour — before tips. Yet, the San Francisco leisure and hospitality industry, which includes full-service restaurants, has experienced positive job growth this year, including following the most recent minimum wage increase.

Have you, as I assume a non-resident of CA, gone to a restaurant in CA? Their prices, compared to other parts of the country, are outrageously high. Sure they stay in business because it is not like there are many alternatives to eating.

I live in the bay area. Eat out often.

 

[NYcarbineer]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

You're an idiot. You should move to China, or Cambodia.

 

[NYcarbineer]

I'm amazed that conservatives would eat food prepared by a person they consider almost sub-human.

 

[NYcarbineer]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

I wonder how many conservative men married to a stay at home mom would be willing to tell their spouse that she is so useless with her cooking, cleaning, childcare, and other household duties that if she got cash for her efforts it's only worth about 3.50 an hour.

 

[SAYIT]

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

 

[NYcarbineer]

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

That is not the main reason Walmart's profits have fallen.

 

[Freewill]

Minimum Wage Mythbusters

Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt restaurants.

Not true: In California, employers are required to pay servers the full minimum wage of $9 per hour — before tips. Even with a 2014 increase in the minimum wage, the National Restaurant Association projects California restaurant sales will outpace all but only a handful of states in 2015.



Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would lead to restaurant job losses.

Not true: As of May 2015, employers in San Francisco must pay tipped workers the full minimum wage of $12.25 per hour — before tips. Yet, the San Francisco leisure and hospitality industry, which includes full-service restaurants, has experienced positive job growth this year, including following the most recent minimum wage increase.

Have you, as I assume a non-resident of CA, gone to a restaurant in CA? Their prices, compared to other parts of the country, are outrageously high. Sure they stay in business because it is not like there are many alternatives to eating.

I live in the bay area. Eat out often.

Pay a lot too. Except I was told there is a resident card that gets those who live there a discount.

 

[Freewill]

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

That is not the main reason Walmart's profits have fallen.

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

That is not the main reason Walmart's profits have fallen.

Correct!!!! Obama's lousy recover along with the massive debt is the main reason.

 

[Conservative65]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

I wonder how many conservative men married to a stay at home mom would be willing to tell their spouse that she is so useless with her cooking, cleaning, childcare, and other household duties that if she got cash for her efforts it's only worth about 3.50 an hour.

They can't because the role a stay at home mom has is far more than those things. Sad how you equate RAISING kids with such things. Raising them is far more than that and worth far more than that if you put a price on it. Only a retard Liberal would make those things out to be the same.

 

[Conservative65]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

You're an idiot. You should move to China, or Cambodia.

Tell you what, when you can move me, I'll go.

When a low skilled worker gets paid a wage higher than their skills are worth, they're overpaid.

Tell me how much you think a toilet scrubber, trash emptier, and floor sweeper skills are worth.

 

[Brain357]

A perfectly rational & reasoned post by Cecilie1200 on another thread has inspired me to belch out the following thoughts on the almost inevitable minimum wage increase. Warning, no simplistic, binary, shallow bumper sticker sloganeering ahead. I'm hopeful they'll be kept to a minimum on this thread (he says, not holding his breath).

First, if we take it out to the 20,000 foot level, an increase in the minimum wage (to, say, $15) will certainly not only squeeze profits in a low-margin industry and ultimately increase retail costs, but it will necessarily set off a chain reaction of higher wages and costs right up the salary scale. It won't just be an increase in wages at the lowest end, which appears to be what the clearly informed think.

But here's where it gets interesting - what would that actually look like? Well, there's the good, the bad, and the unknown. I'll (mercifully) keep them all as short as possible, and if the thread goes anywhere, we can expand on them.

The Good: Obviously an increase in the minimum wage will put dollars (deserved or not, from a business perspective) in the hands of low-income workers, increasing their quality of life (theoretically) and provide better stability on the low end of the economic scale. And it would largely mitigate the most reasonable argument proponents of the increase have: In this country, it's absurd that people who work full time still require public assistance. That truly is a form of corporate welfare.

The Bad: As mentioned above, it will set off a chain reaction of salary increases up the scale across the board and increase prices. But more concerning is the fact that it will also lead to hours cutbacks, slower hiring and further momentum towards automation. A business has to protect itself, and unfortunately there are far too many people in this discussion who really don't have the foggiest idea what running a business involves. Further, wage inflation is mitigated somewhat by price inflation, rendering it less valuable.

The Unknown: Here's a discussion I never see. I don't have data to back this up (too lazy right now) but I'm guessing that among the most affected industries and products will be fast food and lower retail cost items. Okay, to make a long story short, perhaps we're then talking quality over quantity. So we might be less likely to buy 3 Big Macs™ and wash them down with an extra super duper size fries; we won't find ourselves buying seven $3 shirts; on the other end, more of us may settle for a 48" mondo big screen teevee instead of a 60" double mondo version. On and on.

I guess what I'm saying here is that proponents of the increase will never bring this up, I suspect because they're afraid it might damage their argument. Still, the "freedom" (there's that word) to cram our homes and mouths with a lot of cheap crap may very well dinged somewhat by this increase.

But is that necessarily a bad thing, really?

Just saying.


.

It is unlikely to go as high as $15. More likely to be $10.10, and economists agree it would be good for the economy:
In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.

Over 600 Economists Sign Letter In Support of $10.10 Minimum Wage: Economist Statement on the Federal Minimum Wage

 

[Brain357]

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

That is not the main reason Walmart's profits have fallen.

Their real problem is much more likely to be Amazon.

 

[LoneLaugher]

It might suck because of government doing all it can to shut it down.....

Excessive regulations.....
Taxes
O Care....
Increase in minimum wage.

On and on ....

And still many Americans try it...Go into business.Start their own company.
Good for them.Despite governments attempts to block them at every turn.

You are struggling with the talking points, bro. Best to be honest.

 

[PoliticalChic]

The minimum wage has been falling for 45 years. Has that made the job situation better in the US?

It has actually put the minimum wage to a more equivalent level to the skills those jobs require. When someone is being paid $7.25/hour for a job that requires $3.50/hour skills, they're overpaid. It's time to get things back in line.

I wonder how many conservative men married to a stay at home mom would be willing to tell their spouse that she is so useless with her cooking, cleaning, childcare, and other household duties that if she got cash for her efforts it's only worth about 3.50 an hour.

And now a short poem about Liberal men:

Women's faults are many,
Lib Men have only two:
Everything they say,
And everything they do.

 

[PoliticalChic]

You and the liberals are smoking crack if you all think it will set off a chain reaction of salary increases, can't squeeze blood out of a turnip...it is trickle up poor...

Yes, it will have to create a chain reaction of salary increases, but companies that don't have the cash flow to handle that (and there will be many) will have to compress its work force (and/or reduce available hours) and institute other cost-cutting measures.

Those who back the increase say it will put more money in consumers hands, which in turn will cause them to spend more, which will (theoretically) put money in the hands of the employers who are having to pay more. What they don't understand is that this won't happen overnight, and low-margin businesses are going to have to react by cutting those jobs and hours.

I did see one study that says that if the increase is not done too quickly it can effectively be absorbed over time, and that was excellent news. And none of the plans I've seen call for an immediate jump to $15, although I suspect most of the minimum wage workers who are screaming for it don't realize that.

The wild card here is automation. Otherwise, the increase is coming, gang, and businesses know it.
.

Many large American corps are already raising their lower wages as are many states and localities. The cost of living varies widely across the country which is why the min wage should be a state and local issue ... not a federal one.

WalMart's minimum wage is now $9/hr and will rise a buck in 2016. Their profits have fallen as a result, as has their stock value.

Target, Costco, Ikea, McD's and a slew of America's largest employers have reacted to market forces by raising the wages of their low earners without gov't meddling.

Automation will continue to make inroads into the low skill/low wage job market, probably at an accelerated pace.

That is not the main reason Walmart's profits have fallen.

This is:
Obama's effect on the economy.