How do people survive on minimum wage?

[Againsheila]

Me either, a Big Mac would cost $30 in that scenario.

Really? MW in our state is $9.04 an hour, our Big Macs cost a lot less than $9.00. I think there is something wrong with your knowledge of economics. In fact, our Big Macs cost $4.20 while Big Macs in Australia cost $4.94.

Daily chart: The Big Mac index | The Economist

If that is the case then there is no way in hell the minimum wage for an Australian fast food worker is $17 per hour.
BTW, a Big Mac sandwich only is $3.29. The MEAL with fries and medium beverage is $5.09 That is at the Mickey D's right down the street here.

That's what I thought, but I was going with the chart...

 

[koshergrl]

Cannot work. Here's why. If min wage is pushed up ward, the people who's wages are not moved upward are penalized wiht higher consumer prices. So as the lowest wage rises, the others do not.
Of course in the real world, min wage increases always hurt the lower skilled workers.
Easy...If a hardware store owner has say two full time, three part time and three min wage high school kids that work in the afternoons and weekends.
If the min wage was increased by 50 cents per hour. That store owner will have to absorb an instant increase in his expenses. His lowest end labor now costs $1.50 per hour more. Now, the part timers and full timers will have to be given raises because of thei loyalty and for reasons of equity. They also receive 50 cent raises. Now that payroll is costing another $3.50 per hour. Also, with the increase in wages comes an increase in worker's compensation premiums because those rates are tied to the income level of the employee. Social Security becomes more costly...Taxes rise as well.
What the store owner will do is make a choice. He can raise his Prices. UNlikely given the existence of local competition. He can reduce the hours of the high school kids. Or he can keep the same hours for just TWO of the kids.
The result is the same no matter which path is taken.
All because the busy body federal government at the behest of YOU demanded business simply "pay them more"...This is what is referred to as an "unfunded mandate"..
See unlike many socialist democracies, we here in the US save for certain industries, offer NO government subsidy to business.
In countries such as France, Germany, the UK heavily subsidize businesses.

Then why does this work in Australia, where we get a pay rise every 12 months, but it can't work in the US? The adults in the US are earning as much as a 15 year old minimum wage worker here! There is something seriously wrong with that, and something has to change.

The minimum wage has to rise eventually. As the cost of living rises, their wages stay the same, meaning it becomes more and more difficult to survive on such wages.

The minimum wage in the US must have risen in the last ten years, surely? I would find it hard to believe if it hadn't!

Uh, yeah...it raised to $7.25 in 2009. It goes up fairly regularly. My state currently has an $8.80 minimum wage.

I think min wage was something like $3.00 when I started working.

Federal Minimum Wage Rates, 1955

 

[Noomi]

Cannot work. Here's why. If min wage is pushed up ward, the people who's wages are not moved upward are penalized wiht higher consumer prices. So as the lowest wage rises, the others do not.
Of course in the real world, min wage increases always hurt the lower skilled workers.
Easy...If a hardware store owner has say two full time, three part time and three min wage high school kids that work in the afternoons and weekends.
If the min wage was increased by 50 cents per hour. That store owner will have to absorb an instant increase in his expenses. His lowest end labor now costs $1.50 per hour more. Now, the part timers and full timers will have to be given raises because of thei loyalty and for reasons of equity. They also receive 50 cent raises. Now that payroll is costing another $3.50 per hour. Also, with the increase in wages comes an increase in worker's compensation premiums because those rates are tied to the income level of the employee. Social Security becomes more costly...Taxes rise as well.
What the store owner will do is make a choice. He can raise his Prices. UNlikely given the existence of local competition. He can reduce the hours of the high school kids. Or he can keep the same hours for just TWO of the kids.
The result is the same no matter which path is taken.
All because the busy body federal government at the behest of YOU demanded business simply "pay them more"...This is what is referred to as an "unfunded mandate"..
See unlike many socialist democracies, we here in the US save for certain industries, offer NO government subsidy to business.
In countries such as France, Germany, the UK heavily subsidize businesses.

Then why does this work in Australia, where we get a pay rise every 12 months, but it can't work in the US? The adults in the US are earning as much as a 15 year old minimum wage worker here! There is something seriously wrong with that, and something has to change.

The minimum wage has to rise eventually. As the cost of living rises, their wages stay the same, meaning it becomes more and more difficult to survive on such wages.

The minimum wage in the US must have risen in the last ten years, surely? I would find it hard to believe if it hadn't!

Uh, yeah...it raised to $7.25 in 2009. It goes up fairly regularly. My state currently has an $8.80 minimum wage.

I think min wage was something like $3.00 when I started working.

Federal Minimum Wage Rates, 1955

Thanks for the link!

So, if minimum wage goes up on a regular basis, why not just increase it by a larger amount, and hold off raising it again for a few years? The prices would go up, but with no increase in the min wage, they should stay the same until such time it is raised again - would that be right?

 

[koshergrl]

Why raise it at all?

 

[Noomi]

Why raise it at all?

You don't think minimum wage should be raised? It has to go up, in order to keep up with rising costs of living!

 

[Barb]

So why shouldn't those who want the floor raised for the lowest paid (incidentally, they are, more often than not, also the hardest, most dangerous, and least desirable jobs) lobby to do so?

 

[Againsheila]

Cannot work. Here's why. If min wage is pushed up ward, the people who's wages are not moved upward are penalized wiht higher consumer prices. So as the lowest wage rises, the others do not.
Of course in the real world, min wage increases always hurt the lower skilled workers.
Easy...If a hardware store owner has say two full time, three part time and three min wage high school kids that work in the afternoons and weekends.
If the min wage was increased by 50 cents per hour. That store owner will have to absorb an instant increase in his expenses. His lowest end labor now costs $1.50 per hour more. Now, the part timers and full timers will have to be given raises because of thei loyalty and for reasons of equity. They also receive 50 cent raises. Now that payroll is costing another $3.50 per hour. Also, with the increase in wages comes an increase in worker's compensation premiums because those rates are tied to the income level of the employee. Social Security becomes more costly...Taxes rise as well.
What the store owner will do is make a choice. He can raise his Prices. UNlikely given the existence of local competition. He can reduce the hours of the high school kids. Or he can keep the same hours for just TWO of the kids.
The result is the same no matter which path is taken.
All because the busy body federal government at the behest of YOU demanded business simply "pay them more"...This is what is referred to as an "unfunded mandate"..
See unlike many socialist democracies, we here in the US save for certain industries, offer NO government subsidy to business.
In countries such as France, Germany, the UK heavily subsidize businesses.

Then why does this work in Australia, where we get a pay rise every 12 months, but it can't work in the US? The adults in the US are earning as much as a 15 year old minimum wage worker here! There is something seriously wrong with that, and something has to change.

The minimum wage has to rise eventually. As the cost of living rises, their wages stay the same, meaning it becomes more and more difficult to survive on such wages.

The minimum wage in the US must have risen in the last ten years, surely? I would find it hard to believe if it hadn't!

Uh, yeah...it raised to $7.25 in 2009. It goes up fairly regularly. My state currently has an $8.80 minimum wage.

I think min wage was something like $3.00 when I started working.

Federal Minimum Wage Rates, 1955

You'll notice using your link, that in 1968 using 1996 constant dollars mw was $7.21 an hour. In 2007 it was $4.41 an hour. more than 1/3 less spending money. They didn't even bother posting the 1996 constant dollars for 2008 and up.

For all of you that grew up in the 60's and 70's and bragged about how you made it work on mw, I want you to think about trying to make it work with more than 1/3 less than you made back then. Would it have worked?

 

[Foxfyre]

So why shouldn't those who want the floor raised for the lowest paid (incidentally, they are, more often than not, also the hardest, most dangerous, and least desirable jobs) lobby to do so?

Certainly they should be able to organize if they wish to. And there is no problem with labor asking for better wages. But those asking are not the ones who took the risks to start the business. They are not the ones who have to meet the payroll, pay the taxes, pay the utilities, purchase the raw materials and other needed supplies, arrange for transportation, pay for maintenance on the physical property, tools, and equipment, and who lose their shirt and likely a substantial investment if the business fails.

So why should a union be able to demand more wages and benefits than the owner can pay and still make a profit? Why should the union be able to strike and shut down the business to get their way? Even to the point that they harrass and violate the rights of others who would gratefully take the jobs at the wages the strikers refuse to do?

The workers have no right to anything the owner has. They have the right to sell their labor to the highest bidder for that labor, but they have no right to demand that anybody pay or provide them anything.

 

[thereisnospoon]

Why raise it at all?

You don't think minimum wage should be raised? It has to go up, in order to keep up with rising costs of living!

It should be eliminated. It's a job killer.
And I am not buying your assertion that fast food workers in Australia are paid $18 and hour.
I have questions for you..
What is the primary function of a business?
For what reason are businesses created?

 

[thereisnospoon]

Why raise it at all?

You don't think minimum wage should be raised? It has to go up, in order to keep up with rising costs of living!

The best way to keep up with or to beat the cost of living is improve one's skills and/or education. With those things, one can set their own wages by making themselves a stand out candidate for higher skilled and higher paying work. This is the way things operate here.
That's the way it should be. It's the logical path.

 

[thereisnospoon]

That is why I think the US should raise the minimum wage, although I know the majority of you would disagree.

Raising the minimum wage is only marginally effective, though. It's like taking cough syrup to treat pnemonia. The real changes that the country needs are things more ingrained into modern society. Labor is a market just like any other, and prices are set based on demand. But where many on the right (particularly the far right) go wrong is maintaining a perception that the demand is a one way street. It's not just about the demand for labor, it's the demand for income too. And society, in general, has gotten lazy when it comes to its demands on income.

What I mean is this: Nobody gets paid what they are "worth." You get paid what you are convinced to settle for. Employers don't pay you the top dollar they can. They pay you as little as they can get you for. As employees, we have to have a responsibility to advocate for ourselves and to, in turn, try to convince the employer to pay us as much as we can convince them to pay us. So what's happened across the lower and middle classes is that people have been settling for a very long time. In doing so, those toward the top have come to keep an increasingly larger slice of the pie for themselves.

The collective result is that as many people sell themselves short, it becomes more difficult to leverage one's employer to agree to a higher wage for you. Because there are so many people who are willing to do the job at a lower wage. On an individual level, you can try to leverage your employer as much as you want to convince him to grant you a higher wage. But your employer is going to strive to maintain the same approximate ratios as the rest of the market out there. If less income were directed toward the higher ends, and in turn was going toward the lower ends, a true living wage could be able to result at the bottom levels of the pyramid. But until our society as a whole is ready to start being more assertive with things like negotiating our compensation (particularly on the lower ends of the pyramid) raising the minimum wage is only going to be a superficial solution.

"so many people who are willing to do the job at a lower wage. "...
Right there you hit it. Labor is a commodity. If there is high demand ( many applicants) for few positions it's to the favor of business. Switch the roles and the advantage goes to the applicants.
Same applies to the level of skill. There are millions of people that can perform menial or low skill jobs. For those the pay is low. There are fewer people that can perform skilled trades, management or other mid level jobs. The pay for those occupations is much higher because there are fewer qualified people who can do those jobs.
Your pyramid scheme is specious.
Your attempt to promote the zero sum game is dismissed.
No matter how you spin it, taking away from the top levels will NEVER result in the lower levels getting more. Again, labor is a commodity.

 

[thereisnospoon]

Cannot work. Here's why. If min wage is pushed up ward, the people who's wages are not moved upward are penalized wiht higher consumer prices. So as the lowest wage rises, the others do not.
Of course in the real world, min wage increases always hurt the lower skilled workers.
Easy...If a hardware store owner has say two full time, three part time and three min wage high school kids that work in the afternoons and weekends.
If the min wage was increased by 50 cents per hour. That store owner will have to absorb an instant increase in his expenses. His lowest end labor now costs $1.50 per hour more. Now, the part timers and full timers will have to be given raises because of thei loyalty and for reasons of equity. They also receive 50 cent raises. Now that payroll is costing another $3.50 per hour. Also, with the increase in wages comes an increase in worker's compensation premiums because those rates are tied to the income level of the employee. Social Security becomes more costly...Taxes rise as well.
What the store owner will do is make a choice. He can raise his Prices. UNlikely given the existence of local competition. He can reduce the hours of the high school kids. Or he can keep the same hours for just TWO of the kids.
The result is the same no matter which path is taken.
All because the busy body federal government at the behest of YOU demanded business simply "pay them more"...This is what is referred to as an "unfunded mandate"..
See unlike many socialist democracies, we here in the US save for certain industries, offer NO government subsidy to business.
In countries such as France, Germany, the UK heavily subsidize businesses.

Then why does this work in Australia, where we get a pay rise every 12 months, but it can't work in the US? The adults in the US are earning as much as a 15 year old minimum wage worker here! There is something seriously wrong with that, and something has to change.

The minimum wage has to rise eventually. As the cost of living rises, their wages stay the same, meaning it becomes more and more difficult to survive on such wages.

The minimum wage in the US must have risen in the last ten years, surely? I would find it hard to believe if it hadn't!

Explained in previous post.
ANd here is a story on the negative effects on small and mid sized business as a result of Australia's uniquely high minimum wage requirements.
The bullet points....Lower productivity, lower profits and REDUCED work hours.
It's not all a bed of roses. I knew there was a catch. You seem to consider the government mandated minimum wage ot be a panacea. It isn't.
Ans the other issue is you were not entirely truthful now were you.
You stated the min wage for a worker in a Mc Donald's is $18 per hour. NOT so.
In fact the min wage graduates with the age of the worker. 16 year olds is $7.55. 17 year olds min wage is $9.22 and an 18 year old min wage is $10.90.....So are you now going to attempt to convince this board that ALL workers in every Mc Donald's in Australia are over the age of 21?
I bet you, those stores as well as all other low skill wage employers use the younger people and limit the hours of older workers.
I checked around. There is no law that I can find that guarantees a worker be paid for 40 hours per week or however many hours makes up a work week in your country.
ACCI - Revealed: The Hidden Costs To Small Businesses Of Minimum Wage Rises
Here's an interesting statistic.
according to this link...Part-time - Wikipedia, the free encyclopedia
3.3 million of Australia's 10.9 million workers are part time or about 33%.
In the US 18 million of the USA's 140 million workers are part time. That's a little over 13%.
This makes complete sense. With such high wages Australia's businesses use far more part time workers to avoid the unfunded government mandates.
I must assume there are safeguards in place or at least exemptions for small business because if there are none, it would place all small business in a competitive disadvantage.
We avoid allowing government to interfere with the marketplace here. It does occur.

 

[Againsheila]

That is why I think the US should raise the minimum wage, although I know the majority of you would disagree.

Raising the minimum wage is only marginally effective, though. It's like taking cough syrup to treat pnemonia. The real changes that the country needs are things more ingrained into modern society. Labor is a market just like any other, and prices are set based on demand. But where many on the right (particularly the far right) go wrong is maintaining a perception that the demand is a one way street. It's not just about the demand for labor, it's the demand for income too. And society, in general, has gotten lazy when it comes to its demands on income.

What I mean is this: Nobody gets paid what they are "worth." You get paid what you are convinced to settle for. Employers don't pay you the top dollar they can. They pay you as little as they can get you for. As employees, we have to have a responsibility to advocate for ourselves and to, in turn, try to convince the employer to pay us as much as we can convince them to pay us. So what's happened across the lower and middle classes is that people have been settling for a very long time. In doing so, those toward the top have come to keep an increasingly larger slice of the pie for themselves.

The collective result is that as many people sell themselves short, it becomes more difficult to leverage one's employer to agree to a higher wage for you. Because there are so many people who are willing to do the job at a lower wage. On an individual level, you can try to leverage your employer as much as you want to convince him to grant you a higher wage. But your employer is going to strive to maintain the same approximate ratios as the rest of the market out there. If less income were directed toward the higher ends, and in turn was going toward the lower ends, a true living wage could be able to result at the bottom levels of the pyramid. But until our society as a whole is ready to start being more assertive with things like negotiating our compensation (particularly on the lower ends of the pyramid) raising the minimum wage is only going to be a superficial solution.

"so many people who are willing to do the job at a lower wage. "...
Right there you hit it. Labor is a commodity. If there is high demand ( many applicants) for few positions it's to the favor of business. Switch the roles and the advantage goes to the applicants.
Same applies to the level of skill. There are millions of people that can perform menial or low skill jobs. For those the pay is low. There are fewer people that can perform skilled trades, management or other mid level jobs. The pay for those occupations is much higher because there are fewer qualified people who can do those jobs.
Your pyramid scheme is specious.
Your attempt to promote the zero sum game is dismissed.
No matter how you spin it, taking away from the top levels will NEVER result in the lower levels getting more. Again, labor is a commodity.

And without the increase in immigration, both legal and illegal, the lowest paid workers would be in high demand. The average American has children at less than replacement value and it's been that way since the 70's, meanwhile, the average immigrant has 7.5 kids per family. In fact, Mexicans here have more children than Mexicans in Mexico.

 

[Noomi]

Why raise it at all?

You don't think minimum wage should be raised? It has to go up, in order to keep up with rising costs of living!

It should be eliminated. It's a job killer.
And I am not buying your assertion that fast food workers in Australia are paid $18 and hour.
I have questions for you..
What is the primary function of a business?
For what reason are businesses created?

Would you like me to take a photo of a pay sheet and prove to you that a casual worker at McDonalds, over the age of 21, DOES, in fact, earn over $18 an hour, before tax?

 

[editec]

There's plenty of wealth to go around if it is divided in a fairly reasonably way.

There's enough wealth for the wealthy to continue to be very wealthy, and still enough for the workers to have a decent quality of life.

There is enough wealth, folks.

There just isn't the political will to spread it around.

 

[Foxfyre]

Noomi is correct that the minimum wage in Australia is that high rate and yes, their fast food workers do make that. But Australia is a very large country in land mass with a population of little more than NY State. It enjoys extremely low unemployment because they have tough immigration laws, enforce them diligently, and therefore enjoy full employment at all times. And not all that many folks want to move there, and those who do are expected to be qualified to support themselves and not be 'wards of the state'.

I read somewhere that the average per capita net worth in Australia is something like $350,000 making it one of the highest in the world. It also has very low taxes compared to most developed nations and concentrates welfare benefits on the legitimately poor. And they have an education system that demands that students educate themselves or they are required to attend vocational schools to learn a trade to support themselves. So, with a very low population, strict immigration policies to ensure full employment for its citizens, a population expected and prepared to work and support itself, a welfare system that makes mooching almost impossible, Australia is in a position to dictate a very high minimum wage.

Could that be possible in the United States with our 300+ million people compared to their 21 million? Yes, if we were as diligent in protecting our borders and allowing only immigrants willing and able to support themselves and eliminating our welfare state except for benefits to the truly helpless. Do we have the courage and intelligence to do that? I sure haven't seen it recently. And the debate would still be whether a free market instead of a controlled economy will be the most productive and provide the most opportunity for upward mobility.

 

[Mac1958]

.

Protecting our borders is not politically correct and therefore unacceptable.

.

 

[Foxfyre]

.

Protecting our borders is not politically correct and therefore unacceptable.

.

But the price of that poltiical correctness is dilution of the labor pool so that a lot of labor is worth less.

 

[thereisnospoon]

Raising the minimum wage is only marginally effective, though. It's like taking cough syrup to treat pnemonia. The real changes that the country needs are things more ingrained into modern society. Labor is a market just like any other, and prices are set based on demand. But where many on the right (particularly the far right) go wrong is maintaining a perception that the demand is a one way street. It's not just about the demand for labor, it's the demand for income too. And society, in general, has gotten lazy when it comes to its demands on income.

What I mean is this: Nobody gets paid what they are "worth." You get paid what you are convinced to settle for. Employers don't pay you the top dollar they can. They pay you as little as they can get you for. As employees, we have to have a responsibility to advocate for ourselves and to, in turn, try to convince the employer to pay us as much as we can convince them to pay us. So what's happened across the lower and middle classes is that people have been settling for a very long time. In doing so, those toward the top have come to keep an increasingly larger slice of the pie for themselves.

The collective result is that as many people sell themselves short, it becomes more difficult to leverage one's employer to agree to a higher wage for you. Because there are so many people who are willing to do the job at a lower wage. On an individual level, you can try to leverage your employer as much as you want to convince him to grant you a higher wage. But your employer is going to strive to maintain the same approximate ratios as the rest of the market out there. If less income were directed toward the higher ends, and in turn was going toward the lower ends, a true living wage could be able to result at the bottom levels of the pyramid. But until our society as a whole is ready to start being more assertive with things like negotiating our compensation (particularly on the lower ends of the pyramid) raising the minimum wage is only going to be a superficial solution.

"so many people who are willing to do the job at a lower wage. "...
Right there you hit it. Labor is a commodity. If there is high demand ( many applicants) for few positions it's to the favor of business. Switch the roles and the advantage goes to the applicants.
Same applies to the level of skill. There are millions of people that can perform menial or low skill jobs. For those the pay is low. There are fewer people that can perform skilled trades, management or other mid level jobs. The pay for those occupations is much higher because there are fewer qualified people who can do those jobs.
Your pyramid scheme is specious.
Your attempt to promote the zero sum game is dismissed.
No matter how you spin it, taking away from the top levels will NEVER result in the lower levels getting more. Again, labor is a commodity.

And without the increase in immigration, both legal and illegal, the lowest paid workers would be in high demand. The average American has children at less than replacement value and it's been that way since the 70's, meanwhile, the average immigrant has 7.5 kids per family. In fact, Mexicans here have more children than Mexicans in Mexico.

Pay rates for low skill entry level jobs has only been marginally affected by illegal immigration.
Ironic that those on the left who are complaining about the lagging wages of workers will point out that illegal immigrant taking those low level jobs. The left also SUPPORTS open borders or policies that make it easier for illegals to come here and work.
You cannot have it both ways.
Newsflash, there will never be a shortage of low skill workers. Therefore, pay for those jobs will always be lowest on the wage scale.
7.5? From where did you get this number?
Looks like it is false.....Try again.
It's 3.8 and according to this article, is falling.
Hispanic Family Size in USA Shrinking | Population Research Institute.
Sheila, you will NEVER slip any of your home grown statistics by me. I will investigate and challenge every one of them.

 

[thereisnospoon]

.

Protecting our borders is not politically correct and therefore unacceptable.

.

But the price of that poltiical correctness is dilution of the labor pool so that a lot of labor is worth less.

Yes. On the lower ends of the pay scale and skill levels, this is true.
I find it ironic that those on the left are in support of diluting immigration laws or even amnesty.
More confusing is that union leadership also favors open borders.
If anything, unions should be opposed to any condition which has the potential of lowering wages.
The theory is that those on the left believe that Latinos will vote in lockstep for democrats.
The other is union bosses believe these immigrants are potential union members.
Once again, the left exposes itself as a fraud. They claim to have compassion but the reality is they care only for how these people can be used for political advantage.