Nice retirement for a sweet, humble, smart Wal Mart couple

[Spare_change]

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

 

[HenryBHough]

Glancing back through all pages it appears that there are TWO primary liberal takes on the couple:

1. Disbelief that they could have accomplished what was attributed to them.

2. Disgust that they were able to do it.

The rest? Pretty much scattered....

 

[EdwardBaiamonte]

Glancing back through all pages it appears that there are TWO primary liberal takes on the couple:

1. Disbelief that they could have accomplished what was attributed to them.

2. Disgust that they were able to do it.

The rest? Pretty much scattered....

I'd say the liberal takes are:

1) as brainwashed marxist fools we hate Walmart as the symbol of exploitative Republican capitalism so won't beleive that people who work there can have have easy, comfortable lives, and easy comfortable retirements that 90% of humanity would love to have.

2) Walmart employees have it far worse than those who work outside in winter or inside cleaning the nation's 400 million toilets!.

 

[Andylusion]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

The solution is to simply STOP subsidizing low wages. Don't do it.

No, wages going up in other countries will solve nothing.

There is this strange belief system that if only wages in China go up, then the iPhone will be made in the US and everyone will have jobs.

Listen very carefully.... That is *NEVER* going to happen. China has a population of 1.3 Billion people and rising. Not in a hundred years, is the supply and demand of labor going to raise wages in China enough to match the US. India has 1.2 Billion.

If you wait for wages in China and India to reach US levels with a mere 210 Million people, you are crazy. It's not happening.

Second, besides that, even IF wages did climb to US levels, you are still not going to have those jobs come back to the US. We in the US ATTACK our corporations and businesses. The moment someone provides a significant number of jobs, we attack them like cannibals. We fine them, regulate them, tax them, and everything else. In China and India, they actually LIKE corporations and jobs and business. There is no way that any company is going to bring back those jobs in this hostile anti-business attitude we have here in the US. It's not worth it.

Thirdly, even *IF*... and that's a huge massive *IF*.... IF wages rise massively in China and India, and even IF we reduce taxes, reduce regulations, and stop attacking the job creators in the US........

They are still not going to hire tons of workers to manufacture iPhones and such in the US. It will *NEVER* happen. At the best, they will have a completely automated factories, pumping out iPhones in mass manufacturing machines. It will not be built by hand, by happy employees working 40 hour weeks. It's not going to happen.

You want to bring back domestic employment.... lower taxes... lower regulations... eliminated the minimum wage... and cut the legal red tape, and lawsuit happy lawyers.

But no one wants to do that. Instead you want to sit around and hope China and India cut off their own feet? Not going to happen. Even if China and India did harm their economies, we'd simply outsource to other countries. Those jobs are simply not coming back. Not happening.

 

[Flopper]

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

 

[Flopper]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

The solution is to simply STOP subsidizing low wages. Don't do it.

No, wages going up in other countries will solve nothing.

There is this strange belief system that if only wages in China go up, then the iPhone will be made in the US and everyone will have jobs.

Listen very carefully.... That is *NEVER* going to happen. China has a population of 1.3 Billion people and rising. Not in a hundred years, is the supply and demand of labor going to raise wages in China enough to match the US. India has 1.2 Billion.

If you wait for wages in China and India to reach US levels with a mere 210 Million people, you are crazy. It's not happening.

Second, besides that, even IF wages did climb to US levels, you are still not going to have those jobs come back to the US. We in the US ATTACK our corporations and businesses. The moment someone provides a significant number of jobs, we attack them like cannibals. We fine them, regulate them, tax them, and everything else. In China and India, they actually LIKE corporations and jobs and business. There is no way that any company is going to bring back those jobs in this hostile anti-business attitude we have here in the US. It's not worth it.

Thirdly, even *IF*... and that's a huge massive *IF*.... IF wages rise massively in China and India, and even IF we reduce taxes, reduce regulations, and stop attacking the job creators in the US........

They are still not going to hire tons of workers to manufacture iPhones and such in the US. It will *NEVER* happen. At the best, they will have a completely automated factories, pumping out iPhones in mass manufacturing machines. It will not be built by hand, by happy employees working 40 hour weeks. It's not going to happen.

You want to bring back domestic employment.... lower taxes... lower regulations... eliminated the minimum wage... and cut the legal red tape, and lawsuit happy lawyers.

But no one wants to do that. Instead you want to sit around and hope China and India cut off their own feet? Not going to happen. Even if China and India did harm their economies, we'd simply outsource to other countries. Those jobs are simply not coming back. Not happening.

Wages have been increased rapidly in China, 14% in one year. In India wages increased at a 10% rate in 2014. Maybe what you don't understand is wages between foreign and US workers don't need to reach parity. Only if there is a very significant difference in wages between US and a foreign country does a business supplant US labor with foreign labor. There are significant transition and operating costs including language, training, taxes, government stability, monetary rates, and management control.

At one time low cost Japanese labor was valued by American industry but today with the minimum wage in Japan nearly the same as in the US, no one goes to Japan for cheap labor. The same thing will happen in China and India. It will just take time.

Increasing the wages of low income workers in the US is critical to the solution of most of America's major problems, crime, government deficits, and education. It's really a tough nut to crack. Simply paying government subsidies is not the answer. Nor is a pep talk to the poor to pull yourself by your bootstraps and work harder. Nor is just raising minimum wage a solution. What is needed is real work that people with low skill levels can do and earn sufficient income to support themselves and their family without government support.

 

[Spare_change]

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

If you look closely at the relationship between minimum wage increases and inflation, you will see that there is a concordant increase about 5 years out - it takes that long for the impact to ripple up through the wage structure, which, in turn, drives inflation, when all other factors are adjusted out. It's easy to compare the same year, or even the next year, since the impact isn't felt - you need to look further out and then remove other factors.

Do the other factors have a larger impact? Probably - though I can find no data to support that.

 

[Flopper]

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

If you look closely at the relationship between minimum wage increases and inflation, you will see that there is a concordant increase about 5 years out - it takes that long for the impact to ripple up through the wage structure, which, in turn, drives inflation, when all other factors are adjusted out. It's easy to compare the same year, or even the next year, since the impact isn't felt - you need to look further out and then remove other factors.

Do the other factors have a larger impact? Probably - though I can find no data to support that.

5 years for a minimum wage increase to effect inflation rate? I think not. An employer is not going to wait 5 years to raise prices to match an increase in labor cost. Look at the 1991 and 1997 minimum wage increases. Inflation was down 5 years after the increase. The increases in 2007, 2008, and 2009 saw no increase in inflation in the following 5 years. Minimum wage increases may well contribute to the inflation rate but the contribution is so small that other factors mask it.

 

[Mac1958]

Glancing back through all pages it appears that there are TWO primary liberal takes on the couple:

1. Disbelief that they could have accomplished what was attributed to them.

2. Disgust that they were able to do it.

The rest? Pretty much scattered....

Yup.

Funny thing is, this just isn't all that unusual, but they REALLY don't want to hear THAT.

I suspect it's just because they worked at Wal Mart, where people are forced to work against their will for slave wages, chained to the wall in case they try to escape, unable to do anything for themselves.

.

 

[EdwardBaiamonte]

Minimum wage increases may well contribute to the inflation rate but the contribution is so small that other factors mask it.

dear, higher wages don't cause inflation because higher wages don't create more money. Do you understand??

Only the Fed can cause inflation by creating more money. Do you understand??

 

[Andylusion]

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

And I would disagree with that completely. You are using terrible inflation measurements. The CPI is horrible.

Second, monetary inflation (inflation do to expanding the money supply) will effect everything fairly evenly. That is not the type of inflation that the minimum wage causes.

The minimum wage inflation generally effects those areas of the economy where you have extremely low wages.

So we would expect to see that the cost of fast food would be highly affected by the minimum wage laws. Do we? Yes we do. Fast food prices have drastically increased between 2006 and 2010. The price of a chipotle burrito in 2006 was about $4.75, and today it's $6.50 for the same chicken burrito.

Price Increases at McDonalds from 2002 to 2013

You can look through some of the menus this guy showed. And sure enough many of the prices have drastically increased.

By the way, not only have prices gone up, but in many cases the serving sizes go down. I was slightly surprised to discover that my local pizza shop used to sell 15" pizzas for $14.59. Now they sell 14" pizzas for $14.59.

Wendy's has decreased the size of their soft drink cups. Used to be 40 oz, now they are 32 oz. Same price, smaller size.

The current inflation index system, doesn't calculate those differences.

Lastly, there is a mitigating effect on minimum wage inflation. Namely.... the replacement of workers with kiosks. Again, I work at a company that makes kiosks, and the printers that kiosks use. Back in 2005-2006, none of the movie theaters I went to had kiosks.

Today, if you walk into a movie theater, there is usually (my experience), one single person in the booth, and the rest of the registers are empty. Instead, you have a dozen kiosks.

Replacing workers with kiosks, mitigates the inflationary effect of the minimum wage.... obviously.... because you are not paying the minimum wage. Your labor costs actually go DOWN because you lay off the workers, and replace them with kiosks.

And we've seen this all over the place. There's a little Get-N-Go quick mart near where I work, and they have a little grill in the back, where you could buy a burger or whatever, right in the shop.

Well, they remodeled 2012, and when I walked in, all the servers were gone, and in their place, 3 kiosks. Now there is one guy, that cooks all the food. You punch in your order at the kiosk, and he whips it up, and says "order 25 ready". Instead of 4 or 5 people, now there is only ONE. So of course the prices have not increased as dramatically as the minimum wage, because they are not paying 5 people anymore, they are paying ONE. The other 4 people are now unemployed. They don't have jobs anymore.

So I would argue that prices have risen quite a bit, and the amount they have not kept up in direct correlation to the minimum wage, is because they have laid people off and replaced them with machines.

 

[Flopper]

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

And I would disagree with that completely. You are using terrible inflation measurements. The CPI is horrible.

Second, monetary inflation (inflation do to expanding the money supply) will effect everything fairly evenly. That is not the type of inflation that the minimum wage causes.

The minimum wage inflation generally effects those areas of the economy where you have extremely low wages.

So we would expect to see that the cost of fast food would be highly affected by the minimum wage laws. Do we? Yes we do. Fast food prices have drastically increased between 2006 and 2010. The price of a chipotle burrito in 2006 was about $4.75, and today it's $6.50 for the same chicken burrito.

Price Increases at McDonalds from 2002 to 2013

You can look through some of the menus this guy showed. And sure enough many of the prices have drastically increased.

By the way, not only have prices gone up, but in many cases the serving sizes go down. I was slightly surprised to discover that my local pizza shop used to sell 15" pizzas for $14.59. Now they sell 14" pizzas for $14.59.

Wendy's has decreased the size of their soft drink cups. Used to be 40 oz, now they are 32 oz. Same price, smaller size.

The current inflation index system, doesn't calculate those differences.

Lastly, there is a mitigating effect on minimum wage inflation. Namely.... the replacement of workers with kiosks. Again, I work at a company that makes kiosks, and the printers that kiosks use. Back in 2005-2006, none of the movie theaters I went to had kiosks.

Today, if you walk into a movie theater, there is usually (my experience), one single person in the booth, and the rest of the registers are empty. Instead, you have a dozen kiosks.

Replacing workers with kiosks, mitigates the inflationary effect of the minimum wage.... obviously.... because you are not paying the minimum wage. Your labor costs actually go DOWN because you lay off the workers, and replace them with kiosks.

And we've seen this all over the place. There's a little Get-N-Go quick mart near where I work, and they have a little grill in the back, where you could buy a burger or whatever, right in the shop.

Well, they remodeled 2012, and when I walked in, all the servers were gone, and in their place, 3 kiosks. Now there is one guy, that cooks all the food. You punch in your order at the kiosk, and he whips it up, and says "order 25 ready". Instead of 4 or 5 people, now there is only ONE. So of course the prices have not increased as dramatically as the minimum wage, because they are not paying 5 people anymore, they are paying ONE. The other 4 people are now unemployed. They don't have jobs anymore.

So I would argue that prices have risen quite a bit, and the amount they have not kept up in direct correlation to the minimum wage, is because they have laid people off and replaced them with machines.

There is no evidence that the cost of living has gone up due to minimum wage increases. It is logical to assume that minimum wage increases contributes to the overall increase in prices but the amount of that increase can't be determine. No matter how you look at it, the increase in inflation is significantly lower that minimum wage increases.

Again there is no way of knowing how employers will handle an increase in labor cost. Employers can only layoff employees if it will not significantly reduce revenue.

A good example of how employers plan to handle a large increase in minimum wage can be found in Seattle which passed a resolution to raise minimum wage 50%. Ivars, a chain of 26 restaurants announced that they will pass along the increases to customers but will instigate a no tipping policy. Another chain, Dick's Hamburger announced they will not be increasing prices because most of their employees already make the new minimum wage. Neither restaurant will be reducing benefits. No restaurant has announced cutbacks in staff. Other employers say they are planing to handle the increase in wage cost by a combination of cost reductions and revenue increases. Surprisingly, most businesses support the increase in minimum wage. A poll of frequent restaurant diners said they will not reduce dinning out even if all costs are passed on to the customer.

The bottom line is that minimum wage increases will raise the wages of some low income workers reducing dependence on government support and giving them a little larger share of the nations wealth. The current federal proposal will raise the wages of very few workers. Even with the ripple of effect, 75 to 85% of the workers will see no change in wages.

 

[EdwardBaiamonte]

The bottom line is that minimum wage increases will raise the wages of some low income workers reducing dependence on government support and giving them a little larger share of the nations wealth.

Higher wages or costs mean higher prices. The folks who work at WalMart shop at Walmart so no net benefit is possible. A liberal will be too stupid to understand so walk into the same swinging door a million times in his life.

 

[hipeter924]

Retirement savings can last, unless your health turns for the worse and you can't afford the medical bills. Going to work till I drop rather than retire, as I don't see the point of being idle anyway.

 

[Andylusion]

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.

First of all, a corporation does not have "the goodness of your heart". It exists for one singular purpose - to maximize the profits for those who own it. Nothing more - nothing less. Can you imagine the reaction if I were to stand up in front of the next stockholders' meeting and announce that, normally, you would have received $11.55 per share dividends this year, but because I felt the workers needed better wages, you will not receive any dividend, and for those of you representing mutual funds, 401(k)s, etc., you need to go to your consumers and tell them you lost money for them this year? Oh, by the way, all those retired people depending on my stock to fund their retirement program will have to go hungry next year.

You are, of course, right that there is not a linear actual increase in wages up the pay scale - in fact, it's much more damaging than that. If a corporation were to increase its unskilled labor wage base by 10%, that percentage tends to stay the same - though, not necessarily, equal - but the ramifications are amazing. For example, I increase the unskilled labor base by 23% (your number), it is inconceivable that I won't have to increase all the other labor rates. While it won't be 23%, it will be 12% or 10% or 8%. 8% of an engineer's salary (assume 80K) is significantly more damaging. It is not a linear scale - it is an exponential scale that will devastate the corporation's competitive position. THAT is how the market gets inflated.

People look at the minimum wage law in a tunnel - they consider the impact on the labor base, and nothing else. They need to,instead, look at the unintended consequences of such an action.

The problem isn't a low minimum wage. Minimum wage jobs are intended to be for those entering the job market with no marketable skills - teenagers, etc. I think I can say, probably without exception, that there are no minimum wage jobs that require you to bring skills to the table - instead, those jobs are the ones that you get paid while you learn marketable skills.

The problem is that there is a segment of our labor pool that have no skills, but yet have families to raise. I'm sure we have all noticed that the average age of the fast food worker has increased significantly over the past two decades. Adults and seniors are taking positions originally intended for teenagers, and those positions were never intended to be lifestyle support.

Companies pay for skills - if you don't have them, you don't get hired. Then, you are forced to go to minimum skilled positions - which pay minimum wage.

There was a recent article in the paper about trying to live on minimum wage. To prove how bad it is, they interviewed a fast food worker in Los Angeles. She said that she had been working at McDonald's, and her pay had only increased to $9.35/hour. She was a single mother trying to raise three kids. Pretty tough deal - no doubt. But, she said this through an interpreter. She had come from Mexico, found a job at McDonalds, and had worked there for six years.

You have to sympathize with her - until you realize that she has no other marketable skills. She has made no attempt to upgrade her marketability. In six years, she hasn't even bothered to learn to speak English!! Is it McDonalds' fault she only makes $9.35, or is it hers? Why would you ask McDonalds so subsidize her?

A good post, although I disagree with some of your ideas. If minimum wage increases were a major cause of inflation, then we should expect to see some dramatic increase in inflation which we have not see.

• Minimum wage was increase by 40% between 2006 and 2009. The cumulative increase in inflation during this period was 6.4%.
• The increase prior to that was 11.8% in 1997. The inflation that year was 3.04%, 1.67% in 1998, and 1.57% in 1999.
• The prior increase in minimum wage was 11.8% in 1991. The inflation rate for that year was 5.6%, 2.6% in 1992, and 3.2% in 1993.

Now, I'm not saying minimum wage increase has no effect on inflation. What I am saying is that other factors far out weight the effect of the increase on inflation. The contribution that minimum wages makes to inflation occurs primarily in the year it goes into effect and the following year. From the data, one can see that the inflation rate is significantly lower than the minimum wage increase and over the long term inflation due to minimum wage increases are insignificant isolated blips.

And I would disagree with that completely. You are using terrible inflation measurements. The CPI is horrible.

Second, monetary inflation (inflation do to expanding the money supply) will effect everything fairly evenly. That is not the type of inflation that the minimum wage causes.

The minimum wage inflation generally effects those areas of the economy where you have extremely low wages.

So we would expect to see that the cost of fast food would be highly affected by the minimum wage laws. Do we? Yes we do. Fast food prices have drastically increased between 2006 and 2010. The price of a chipotle burrito in 2006 was about $4.75, and today it's $6.50 for the same chicken burrito.

Price Increases at McDonalds from 2002 to 2013

You can look through some of the menus this guy showed. And sure enough many of the prices have drastically increased.

By the way, not only have prices gone up, but in many cases the serving sizes go down. I was slightly surprised to discover that my local pizza shop used to sell 15" pizzas for $14.59. Now they sell 14" pizzas for $14.59.

Wendy's has decreased the size of their soft drink cups. Used to be 40 oz, now they are 32 oz. Same price, smaller size.

The current inflation index system, doesn't calculate those differences.

Lastly, there is a mitigating effect on minimum wage inflation. Namely.... the replacement of workers with kiosks. Again, I work at a company that makes kiosks, and the printers that kiosks use. Back in 2005-2006, none of the movie theaters I went to had kiosks.

Today, if you walk into a movie theater, there is usually (my experience), one single person in the booth, and the rest of the registers are empty. Instead, you have a dozen kiosks.

Replacing workers with kiosks, mitigates the inflationary effect of the minimum wage.... obviously.... because you are not paying the minimum wage. Your labor costs actually go DOWN because you lay off the workers, and replace them with kiosks.

And we've seen this all over the place. There's a little Get-N-Go quick mart near where I work, and they have a little grill in the back, where you could buy a burger or whatever, right in the shop.

Well, they remodeled 2012, and when I walked in, all the servers were gone, and in their place, 3 kiosks. Now there is one guy, that cooks all the food. You punch in your order at the kiosk, and he whips it up, and says "order 25 ready". Instead of 4 or 5 people, now there is only ONE. So of course the prices have not increased as dramatically as the minimum wage, because they are not paying 5 people anymore, they are paying ONE. The other 4 people are now unemployed. They don't have jobs anymore.

So I would argue that prices have risen quite a bit, and the amount they have not kept up in direct correlation to the minimum wage, is because they have laid people off and replaced them with machines.

There is no evidence that the cost of living has gone up due to minimum wage increases. It is logical to assume that minimum wage increases contributes to the overall increase in prices but the amount of that increase can't be determine. No matter how you look at it, the increase in inflation is significantly lower that minimum wage increases.

Again there is no way of knowing how employers will handle an increase in labor cost. Employers can only layoff employees if it will not significantly reduce revenue.

A good example of how employers plan to handle a large increase in minimum wage can be found in Seattle which passed a resolution to raise minimum wage 50%. Ivars, a chain of 26 restaurants announced that they will pass along the increases to customers but will instigate a no tipping policy. Another chain, Dick's Hamburger announced they will not be increasing prices because most of their employees already make the new minimum wage. Neither restaurant will be reducing benefits. No restaurant has announced cutbacks in staff. Other employers say they are planing to handle the increase in wage cost by a combination of cost reductions and revenue increases. Surprisingly, most businesses support the increase in minimum wage. A poll of frequent restaurant diners said they will not reduce dinning out even if all costs are passed on to the customer.

The bottom line is that minimum wage increases will raise the wages of some low income workers reducing dependence on government support and giving them a little larger share of the nations wealth. The current federal proposal will raise the wages of very few workers. Even with the ripple of effect, 75 to 85% of the workers will see no change in wages.

Well again, some fast food joints do in fact already pay their employees well above the minimum wage, and it depends on where geographically you are talking about.

For example, high cost places like New York and Boston, of course all of their employees there are paid much more than the minimum wage, simply because it's a high priced environment to begin with.

But here in Ohio, you absolutely can not tell me that the minimum wage hasn't driven up prices, because I can see with my eye balls that they have. I just posted a link showing drastic increases in fast food prices. You can't tell me that the Minimum wage didn't drive up the price of food when in the late 90s, the cost of a chicken burrito was $4.75, and in 2006, the price of a chicken burrito was still $4.75, and then in 2010, after the minimum wage went from $5.25 to $7.25, and now $8.10 here in Ohio, that the price is now $6.50. In a period of 4 years, the price increased almost 40%, when for the past 6 years prior, it didn't increase almost at all.

You even said yourself, that inflation was only about 6.4%, according to your own post. Then how do you explain increases in price of 75% for a Big Mac? Or a 75% increase in price of a Quarter pounder?

The CPI doesn't show such an increase. But that is exactly what we would expect from a minimum wage driven inflation.

Again, in areas where the prices are already sky high, and wages are already higher, then no, we wouldn't see a minimum wage driven inflation. And we don't. Exactly as we would expect.

I don't understand your comment that employers can only lay off people as long as it doesn't effect revenue.

Of course they can. They do that all the time. Look, the average profit margin for a store, is actually very small.
Average Fast-Food Restaurant Has Small Profit Margin

Very very small. Revenue doesn't do diddly jack squat, unless you have profit. No profit, and it doesn't matter what your Revenue is.

Now, if an employer finds that cutting a few people, will allow him to still make a profit, even if at a lower amount of revenue, he'll do it. Pretty easily too. Which is worse.... lower amounts of revenue and profit with fewer employees, or no profit and bankruptcy?

Lastly, it doesn't surprise me that no restaurant chain announced massive layoffs. Most companies do not openly announce they intend to lay people off. In fact, the only companies that generally announce tons of people are being laid off, are those that are required to in Union contracts. GM and Ford will announce such things. You don't generally hear Toyota and Honda doing that.

Additionally, big chain restaurants, don't have to say anything. Remember, most of the stores are individual franchises. When I was working at McDonald's, and they raised the minimum wage in the 90s, McDonald's didn't announce anything. It was the store owner who decided he had to lay three of our employees off, and did so immediately. McD's Corporate wasn't involved in any way.

So it's real easy for "Food Chain Corp" to say that 'we are not going to lay anyone off because of the minimum wage'. Yeah, because they don't have to pay the wages at all. It's the individual store that has to pay the higher priced labor.

Further, which restaurants have said they are going to handle the higher minimum wage? Is it the small independent shops? Or the major chains? See the major chains have the money to handle the new minimum wage better. It's the small independent shops that don't have the massive capital of a major Food Chain Corp, to deal with higher minimum wages.

And we've heard from those people, and they are terrified, and some are leaving.

Seattle Magazine Restaurants Why Are So Many Seattle Restaurants Closing Lately

Last month—and particularly last week— Seattle foodies were downcast as the blows kept coming: Queen Anne’s Grub closed February 15. Pioneer Square’s Little Uncle shut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21. Renée Erickson’s Boat Street Café will shutter May 30 after 17 years with her at the helm (though, praise be, original owner Susan Kaplan will expand her neighboring Boat Street Kitchen into the space and continue serving the Boat Street paté, the amaretto bread pudding with butter rum cream sauce and other favorites).

Furthermore, less than a week after he was named a James Beard Semifinalist (Best Chef: Northwest) for his work at northern Italian restaurant Spinasse, Jason Stratton announced he would be stepping down from that restaurant and his others—Artusi and Vespolina—immediately to head to Spain.

What the #*%&$* is going on? A variety of things, probably—and a good chance there is more change to come.
​

Tons of stores closing in Seattle. Could it be the minimum wage? Or maybe just a bad year? Of course, as you and I both know, the $15/hr minimum wage isn't implemented yet. But maybe these stores know something we don't?

Washington Restaurant Association's Anton puts it this way: “It’s not a political problem; it’s a math problem.”

He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs). The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year.

With the minimum wage spike, however, he says that if restaurant owners made no changes, the labor cost in quick service restaurants would rise to 42 percent and in full service restaurants to 47 percent.

“Everyone is looking at the model right now, asking how do we do math?” he says. “Every operator I’m talking to is in panic mode, trying to figure out what the new world will look like.” Regarding amount of labor, at 14 employees, a Washington restaurant already averages three fewer workers than the national restaurant average (17 employees). Anton anticipates customers will definitely be tested with new menu prices and more. “Seattle is the first city in this thing and everyone’s watching, asking how is this going to change?”
​

Did you catch that? The math doesn't add up, and Seattle stores already have fewer employees than the national average.

Now why is it that the people who are actually in business...... can figure this out, but some pro-minimum wage supporters, deny it? Math.... doesn't lie.... doesn't have a partisan agenda.... doesn't have a political party.

The people who are actually in the business... are saying there's a problem. Why won't you listen to them, instead of your politically motivated reports?

 

[LoneLaugher]

Just initiated a 401K rollover for a very sweet couple, both aged 63. They both spent the last 17 or so years working at Wal Mart. Not in corporate, but in regular ol' stores. Stocking shelves, receiving, some management, you name it.

They said "we were just careful with our money, we never had to buy the newest stuff, we lived within our means and stayed humble with our money". That's their big secret.

Totals of their 401K's:
Husband: $287,729.57
Wife: $211,898.10

Separate Roth IRA's at Edward Jones:
Husband: $42,114.52
Wife: $43,001.58

Total retirement portfolio: $584,743.77

After our meeting today, they left for a week-long camping and fishing trip with friends, celebrating the start of their comfy retirement. Just bought a cool new red Honda four-wheel-type thing for the trip. They like driving through streams.

So long Wal Mart, hello striped bass.

.

Where did they work until the age of 46?

Let's say they earned an exceptional $12 per hour each at WalMart. That gives them $48k per year gross. That mans that they took home about $1500 per month for 17 years.

That's 306k between them for the 17 years.

They have magicians for financial advisors while never spending a penny of their WalMart income on living expenses ..or they had some kind of careers prior to working at WalMart or some other income stream in which they earned the bulk of their portfolio.

Your thread is a bogus attempt to claim that a couple working non managerial level jobs at Wal Mart can earn enough to retire comfortably....if only they are "humble". That is bullshit.

Congratulations on staying true to form.

 

[Flopper]

The bottom line is that minimum wage increases will raise the wages of some low income workers reducing dependence on government support and giving them a little larger share of the nations wealth.

Higher wages or costs mean higher prices. The folks who work at WalMart shop at Walmart so no net benefit is possible. A liberal will be too stupid to understand so walk into the same swinging door a million times in his life.

Walmart announced recently that over 500,000 employees about 1/3 of their US workforce will be paid a minimum of $10/hr. Within 3 years they hope to have essential all US employees making at lease $10/hr. If all costs are passed on to the customer, prices will rise 1.4%.

Only a grain truth in your statement. Yes, if all wages go up and it effects all business the same, prices will track wage increases.

However, all wages don't go up when minimum wage rises. Only a small percent of the workforce is directly effected. Although there is an indirect effects, the ripple effect, estimates vary widely from 10% to 25% depending on the size of the increase..

There is also a large variation of the impact an increase in minimum wage has on businesses. In labor intensive businesses where 99% of the workers are working at minimum, there is a significantly increases in operating costs. For businesses that aren't labor intensive or pay high wages, it's insignificant.

All business do not react to increases in labor cost by raising prices or firing workers because they can't. Raising prices or firing workers may often impacts revenues sufficiently that employers look for other means of reducing cost or increasing revenue.

Workers that get's a 10% raise due to an increase in minimum wage aren't going to see a 10% increase in their cost of living or anything close to it because the effect on prices are diluted by many other factors.

 

[EdwardBaiamonte]

Workers that get's a 10% raise due to an increase in minimum wage aren't going to see a 10% increase in their cost of living or anything close to it because the effect on prices are diluted by many other factors.

100% stupid and liberal as always:

1) A Rolls always cost more than a Chevy because costs always determine price.

2) Minimum wage workers want higher wages and with the same intensity so do management and owners and suppliers and customers etc etc. If soviet libturds give minimum wage folks a raise the people who pay for it more intensely want to cover the loss by getting a raise too; so prices go up and no net benefit is possible.

3) Now you know why the folk who get minimum wage stay at the bottom and are always clamoring for more under the liberal notion that you get ahead through lib soviet violence rather than by being worth more.

A soviet liberal simply lacks the IQ to understand capitalism so believes in magical welfare, food stamps, minimum wage, heath care, non-free trade. In short, the libsoviet believes in a 1000 child like soviet interventions.

 

[LoneLaugher]

Workers that get's a 10% raise due to an increase in minimum wage aren't going to see a 10% increase in their cost of living or anything close to it because the effect on prices are diluted by many other factors.

100% stupid and liberal as always:

1) A Rolls always cost more than a Chevy because costs always determine price.

2) Minimum wage workers want higher wages and with the same intensity so do management and owners and suppliers and customers etc etc. If soviet libturds give minimum wage folks a raise the people who pay for it more intensely want to cover the loss by getting a raise too; so prices go up and no net benefit is possible.

3) Now you know why the folk who get minimum wage stay at the bottom and are always clamoring for more under the liberal notion that you get ahead through lib soviet violence rather than by being worth more.

A soviet liberal simply lacks the IQ to understand capitalism so believes in magical welfare, food stamps, minimum wage, heath care, non-free trade. In short, the libsoviet believes in a 1000 child like soviet interventions.

Didn't you read the OP? Low wage workers in 'Murica can retire fat and happy. All they need to do is live like they don't have jobs for 20 years. It's a cake walk.....and then you get to go fishin'!

 

[EdwardBaiamonte]

Workers that get's a 10% raise due to an increase in minimum wage aren't going to see a 10% increase in their cost of living or anything close to it because the effect on prices are diluted by many other factors.

100% stupid and liberal as always:

1) A Rolls always cost more than a Chevy because costs always determine price.

2) Minimum wage workers want higher wages and with the same intensity so do management and owners and suppliers and customers etc etc. If soviet libturds give minimum wage folks a raise the people who pay for it more intensely want to cover the loss by getting a raise too; so prices go up and no net benefit is possible.

3) Now you know why the folk who get minimum wage stay at the bottom and are always clamoring for more under the liberal notion that you get ahead through lib soviet violence rather than by being worth more.

A soviet liberal simply lacks the IQ to understand capitalism so believes in magical welfare, food stamps, minimum wage, heath care, non-free trade. In short, the libsoviet believes in a 1000 child like soviet interventions.

Didn't you read the OP? Low wage workers in 'Murica can retire fat and happy. All they need to do is live like they don't have jobs for 20 years. It's a cake walk.....and then you get to go fishin'!

dear, a couple at Walmart earning $10/hour over an entire career earns $42k/year. That's a no stress 40 hour week while most Americans work much longer and under far more stress. 90% of those who have ever lived on this planet would love the Walmart life. They don't clean any of Americans 400 million toilet bowls.