Can we talk about pros/cons of raising the US Federal minimum wage?

[Guest]

1 minute ago, Bootsie said:

What do you think is incorrect?  That in the past the government set a minimum wage so that someone working on those jobs was able to sustain a family and it isn't being done now?  Or, do you mean that most of the people who are working at minimum wage jobs are trying to support a family on that minimum wage?  Or, something else?

I mean that a lot of people who are not pimply-faced teenagers earning pizza money absolutely need their minimum wage job, which is the opposite of what the person making this argument thinks. I don’t know that I would say most...I don’t know what the percentage actually is. Is just think it’s many more people than the usually comfortably-paid person making this argument realizes. 

[City Mouse]

One problem that I see with increasing the federal minimum wage is that it does not take into account the differences in the cost of living in different areas.

My DD makes $11.00 at her job as an “essential worker”. She has worked a ton of overtime in the last year.when her w-2 arrived a few weeks ago, she shared her amount of  total income for last year. While it isnt a lot by anyone’s standards, I compared her income to the income requirements to qualify for government assistance, and for a single person she made $10,000 above the income limit. She is making a decent living at her entry level, no education required job.
 

While she would sure like to get paid more, where should the limits be drawn? Does the government need to guarantee her enough income to be able to take a big vacation each year? She has a car (paid for) and her own apartment. I think we still pay her auto insurance because we have a family plan and taking her off doesn’t save us much. She has started a retirement account, and pays her own medical bills. She is about to age out of our medical insurance and qualifies for subsidized insurance through our state’s marketplace. While she does not have an extravagant lifestyle at all, it is fine for the choices she had made. I don’t think that the benefit of increasing her wages to $15 hr is worth the cost increases to the consumer or business owner. By our state’s standards, she would have to be a family of 4 to get any government assistance at her income.

That being said, I don’t think that $11 hr wage, or even $15 per hour, is a livable wage in places like California or New York City. I think that individual states need to have a state minimum wage that accounts for the cost of living in that state. So maybe I could support a Federal minimum wage of like $10 which states should increase as needed.

[Bootsie]

2 minutes ago, Quill said:

I mean that a lot of people who are not pimply-faced teenagers earning pizza money absolutely need their minimum wage job, which is the opposite of what the person making this argument thinks. I don’t know that I would say most...I don’t know what the percentage actually is. Is just think it’s many more people than the usually comfortably-paid person making this argument realizes. 

I don't have the exact statistics in front of me.  But, over 1/2 of those people who are working in minimum wage jobs live in households in the top 50% of the income distribution.  About 1/2 of minimum wage workers are under 25 years of age.  And over half of minimum wage workers work part-time (less than 35 hours per week.)

[Carol in Cal.]

3 minutes ago, City Mouse said:

One problem that I see with increasing the federal minimum wage is that it does not take into account the differences in the cost of living in different areas.

My DD makes $11.00 at her job as an “essential worker”. She has worked a ton of overtime in the last year.when her w-2 arrived a few weeks ago, she shared her amount of  total income for last year. While it isnt a lot by anyone’s standards, I compared her income to the income requirements to qualify for government assistance, and for a single person she made $10,000 above the income limit. She is making a decent living at her entry level, no education required job.
 

While she would sure like to get paid more, where should the limits be drawn? Does the government need to guarantee her enough income to be able to take a big vacation each year? She has a car (paid for) and her own apartment. I think we still pay her auto insurance because we have a family plan and taking her off doesn’t save us much. She has started a retirement account, and pays her own medical bills. She is about to age out of our medical insurance and qualifies for subsidized insurance through our state’s marketplace. While she does not have an extravagant lifestyle at all, it is fine for the choices she had made. I don’t think that the benefit of increasing her wages to $15 hr is worth the cost increases to the consumer or business owner. By our state’s standards, she would have to be a family of 4 to get any government assistance at her income.

That being said, I don’t think that $11 hr wage, or even $15 per hour, is a livable wage in places like California or New York City. I think that individual states need to have a state minimum wage that accounts for the cost of living in that state. So maybe I could support a Federal minimum wage of like $10 which states should increase as needed.

This is actually pretty much we have now.  A federal minimum wage and locally high minima.

[MercyA]

1 hour ago, Quill said:

I agree with the sentiment but I wonder how true that is for certain low-margin work. Grocery stores springs to mind. My understanding is that margins are tight in the grocery business and you have to account for large losses. If the store is known for low prices (i.e., Aldi), how does that work? 

My dad managed a small-town grocery store for many, many years. The profit margins are very tight--1 to 2%.

The owner of the store is generous to a fault. He keeps on employees who frankly *should* be fired because he says, "What would they do if I let them go?" He hired at least one shoplifter and at least one ex-con and once people start there they often stay until they are elderly. 

That said, he is unwilling to hire on many full-time employees because he would have to give them benefits, and he depends largely on high school workers for bagging and stocking. I honestly don't know what would happen to the store if the minimum wage was raised to $15 an hour. I would not be surprised if it would have to close.

Times have changed so much. My dad started working there as a bagger, hired by the current owner's father because my dad was a teen with a wife and son. Within about seven years, my dad was able to buy land and have a house built. I imagine that would be *really* hard for a low-level employee to do today, especially with only one parent working full-time. 

Something has to change. People should be able to buy food, pay for housing, take care of medical expenses, and save some too with a full-time blue-collar job. There's something wrong and almost indecent that they can't do that now. I don't know what the answer is.

[Carol in Cal.]

3 minutes ago, Bootsie said:

I don't have the exact statistics in front of me.  But, over 1/2 of those people who are working in minimum wage jobs live in households in the top 50% of the income distribution.  About 1/2 of minimum wage workers are under 25 years of age.  And over half of minimum wage workers work part-time (less than 35 hours per week.)

Around here, though, people piece together those jobs pretty commonly.  So, for instance, a couple might have (between the two of them) 1 full time job and 2-3 parttime ones, none paying much more than minimum wage, just to get by.  So citations of part time proportions are misleading in that kind of example.  

[Annie G]

57 minutes ago, happysmileylady said:

 

 

I would be open to an idea of perhaps a second minimum wage for low level party time entry positions, the sorts of jobs that teens, parents looking to bring in additional income, seniors just wanting to do a job, etc....those sorts of positions should exist and if someone doesn't NEED the income to support themselves, it shouldn't be required for the employer to provide such a level of income for a job that really doesn't take all that much work.  

I’m completely against this idea. There are teens saving for a car or college, or even contributing to the household income. There are housewives or seniors who want to work part time, maybe even just to get out and feel useful.  Or maybe they’re looking to supplement Social Security or whatever.  It’s wrong to pay them less just because they don’t ‘need it’ to live.  If that’s the benchmark, why pay anyone a high salary? they don’t ‘need’ that much. 
 

[fraidycat]

I found this talk interesting and thought-provoking awhile ago. I'll have to rewatch it to discuss details, though.

 

This is a gazillionaire arguing that $15 minimum wage is the best way to grow and maintain a strong economy. 

 

Edited March 3, 2021 by fraidycat
Explanation

[Pawz4me]

38 minutes ago, Carol in Cal. said:

Actually, isn’t the current proposal for less than that?  I thought I saw somewhere that it topped out a $12 once they realized that $15 was DOA.

I've not read anything about the current proposal being lowered from $15 to $12. I'm not saying it hasn't been, just that I haven't seen anything about it. Nor have I heard anything about the proposed $15 being "DOA." I don't even know what that means? The proposal to raise the minimum wage was removed from the Covid relief bill currently wending its way through congress because the senate parliamentarian said that it would violate senate rules to include it in that bill. 

[Wheres Toto]

19 minutes ago, Bootsie said:

I don't have the exact statistics in front of me.  But, over 1/2 of those people who are working in minimum wage jobs live in households in the top 50% of the income distribution.  About 1/2 of minimum wage workers are under 25 years of age.  And over half of minimum wage workers work part-time (less than 35 hours per week.)

Do you have a source for this?   It doesn't seem to hold around here.

NJ minimum wage goes up to $12/hour this year, then by $1/year until it hits $15.   I think our minimum wage has pretty much always been higher than the federal (and most even entry level retail jobs paid more than minimum wage anyway).   

I run a small business.  I currently have one employee and plan to hire another later this year.

[Annie G]

4 minutes ago, happysmileylady said:

I think we have a fundamental difference of perspective because I think it's wrong to pay for a job based on what the person doing the job needs to live.  I think the job should pay according to how much is actually required.

 

I am currently a single mom of 3 kids who aren't even teenagers looking to supplement social security survivors benefits.  I am ALSO looking into more long term financial prospects but for my immediate future I just don't need much more and.....I don't want to be paid for more work than I am doing just because it costs more for an apartment in Cali than it does for the house I moved into a week ago here in Indiana.  

Oh I didn’t say whether I think every job should pay a living wage. That’s another question altogether. I merely said two people doing the same job should be paid the same, not that teens or senior citizens should be paid less. 
The cost of living differences across the US do make a federal minimum wage tricky- that’s why so many states already set their minimum higher than the federal minimum.  I agree it should be higher than $7.25. 

[Carol in Cal.]

9 minutes ago, Pawz4me said:

I've not read anything about the current proposal being lowered from $15 to $12. I'm not saying it hasn't been, just that I haven't seen anything about it. Nor have I heard anything about the proposed $15 being "DOA." I don't even know what that means? The proposal to raise the minimum wage was removed from the Covid relief bill currently wending its way through congress because the senate parliamentarian said that it would violate senate rules to include it in that bill. 

Dead On Arrival.  Meaning that it was vanishingly unlikely to pass.

But my original belief could well be wrong.   I have not been following this that closely.

Edited March 3, 2021 by Carol in Cal.

[Carol in Cal.]

3 minutes ago, Plum said:

 

Yes. That’s what Target did. Everyone feels good going to Target over Walmart because they treat their employees better and we’re already at a $15 minimum wage. Yay for them. 
News came out that team leaders (that’s their name for non-salary department managers) suddenly weren’t working full-time anymore. Well that’s not cool. To paraphrase an interview I saw with the CEO he said they raised the wage so they can get more applicants which is code for choose better employees. 

Back in the day I worked my way up from cashier to electronics team lead. Next stop salaried manager. Together Dh and I were able to live off of that. If they had raised my hourly wages and then cut my hours down to not having to pay for my benefits, that would have had me leaving.
I ❤️ 🎯 but they just posted huge earnings. I do hope they started paying their team leads for full time again. 

Yes, and benefits costs were significantly raised by the ACA.  Also, the ACA penalized employers that were offering better than normal medical insurance.  

I think having good accessible medical insurance is a great good thing, but again, anytime you make a big change in the labor laws, it has unintended results, not all of which are good.

[Carol in Cal.]

One thing that might help an increase in federal minimum wage be more palatable is to allow a lower amount during initial training, with a specific time deadline (so that companies could not claim that employees are in initial training forever.). 

The barrier to entry for small businesses to hire people is often a combo of having to pay a lot during training, a net loss for that period, and having employees leave for greener pastures once they are trained.   

[Carol in Cal.]

Just now, Plum said:

When I worked at Target I had a lovely retiree working for me. She was a workhorse and I would have scheduled her for 40 hours a week if I could but then she would go over and her SS would get penalized. She wanted to work and get out of the house. She didn’t need the money. She can’t just not take it though. 
the problem I see with this scenario is restricting retirees hours, not a problem with the wage itself. 

Once they reach full retirement age, though, that SS penalty goes away.  So that period of penalization is at most 5 years long.

[Bootsie]

10 minutes ago, Wheres Toto said:

Do you have a source for this?   It doesn't seem to hold around here.

NJ minimum wage goes up to $12/hour this year, then by $1/year until it hits $15.   I think our minimum wage has pretty much always been higher than the federal (and most even entry level retail jobs paid more than minimum wage anyway).   

I run a small business.  I currently have one employee and plan to hire another later this year.

Characteristics of minimum wage workers, 2019 : BLS Reports: U.S. Bureau of Labor Statistics

This is the for the age breakout and the percent working part-time.  It is based on federal minimum wage; if you have a state minimum wage, the percentages in your state may be different.  

[BusyMom5]

I do not support a Federal Minimum Wage, regardless of the amount proposed.  Our country is huge, from small town to huge metropolitan areas, and I don't think any Federal amount could ever be fair- for rural or urban citizens.  I do support local and state minimum wages, bc I think they are much more tailored to an areas needs cost of living, and ability of employers to increase pay.  

I live in a rural area.  Our town does not have any chain stores, its mostly mom-and-pop type stores.   The CoL is very low, but most places pay $9-10ish to start for simple jobs like stocking shelves, checkouts, etc.  A few weeks ago as I was driving around, I wondered how many places could survive a $15 minimum wage.  In our area, I think it would result in an overall loss of jobs while the business owner took on more of the jobs themselves rather than growing their business.  Those who think this will hurt Walmart,  Amazon or Target,  you are wrong.  It will hurt Main Street, particularly rural Main Street.  I'll just say I already feel like people in big cities keep trying to force their opinions and policies on rural America, while not understanding how we live.  

I decided to check our Median Teacher Salary.  Its $33K a year- that's MEDIAN, not starting (I think starting is around $25).   If you devide that into 52 weeks, and then 40 hours a week, its less than $16 an hour.  This is what our state csn afford to pay someone with a 4+ year degree- and many support paying a teenager stocking shelves the same amount.  If the teenager makes that, then what should the teacher make?  I think we all agree teachers are underpaid, but should she make an average of $25/hr?  How will we afford it?  Our state has already cut school funding.  

Our small businesses cannot afford it, our government can't afford it, and I do think it will lead to fewer jobs in a lot of areas.  

 

Edited March 3, 2021 by BusyMom5

[happi duck]

It's inhumane, in my opinion, to judge whether a task is worthy of a *living* wage.  All jobs, done well, take some sort of skill/gift.  The jobs society thinks "anyone can do that" still require skill to do *well*.  Anything customer facing needs a ton of skill to do well!

 

[1shortmomto4]

My ds works at Target.  They've been trying to keep ahead of the minimum wage by offering hourly pay at the latest proposed amounts and have been the past few years.  So each time they raise this "wage" the employee's hours are cut.  They tend to make the same (or less) but they are working far less hours.  This helps keep Target from having to cover any kind of medical plan assistance and the employee continues to be underemployed.  He has worked there for 5 years (allowed him to take leave to attend college and come back for breaks and once COVID hit and all the "professional" jobs in his field of interest closed off he has remained there) and over those years each and every time they mandated a pay raise those hours were cut.  At $15 and climbing, in this area of the country those salaries are coming way too close to the new teacher who is required to have a Masters Degree for a license - so at what point is a minimum wage too much versus jobs that require high level degrees but get paid about the same?

[bookbard]

Just to add that in Australia, a teenager gets paid less than an adult. It would go up each year until you are 21. So, casual min wage for an 18yr old is 16.80, for a 21 yr old is $24 (keep in mind, Australian $$). This means McDonalds and similar tend to only hire young people. In our state, there's no minimum age to work, either, but I think 14 is the youngest places will hire. You will definitely see 14yr olds taking orders at KFC - I have never seen an elderly person working in a similar position. It is very, very difficult to get a job if you're an older person. 

However, we do have the great benefit that health care, unemployment benefits and so forth aren't tied to having a job. Which means it's easier to start your own business. Half the local women I know are cleaners with their own business. They all have degrees, let me add, but there just aren't a lot of jobs esp if you need to be free outside school hours. 

In short, raising the minimum wage is great, but if you sorted your healthcare situation out (not sure what else is tied to employment in the USA), you might find all sorts of benefits to employment that way. 

[Katy]

There are teens aging out of foster care who have no one to rely on. There are moms stuck in abusive relationships because they don’t have access to a job with a living wage.  Then the same mothers sometimes lose their children to foster care because they cannot get out until they have the type of assistance you get from reunification plans. 
 

When DH & I wanted to adopt but weren’t sure whether to go with foster care or private adoption at first I read an article that said foster care is more ethical because the vast majority of birth mothers would keep their children if it was economically feasible to do so without being doomed to poverty for years to come. I never looked up the sources for that but it rung true enough to me to think, “Yeah, that isn’t fair.”  There should be a living wage, affordable education, and affordable daycare. 

[Bootsie]

4 minutes ago, Katy said:

There are teens aging out of foster care who have no one to rely on. There are moms stuck in abusive relationships because they don’t have access to a job with a living wage.  Then the same mothers sometimes lose their children to foster care because they cannot get out until they have the type of assistance you get from reunification plans. 
 

When DH & I wanted to adopt but weren’t sure whether to go with foster care or private adoption at first I read an article that said foster care is more ethical because the vast majority of birth mothers would keep their children if it was economically feasible to do so without being doomed to poverty for years to come. I never looked up the sources for that but it rung true enough to me to think, “Yeah, that isn’t fair.”  There should be a living wage, affordable education, and affordable daycare. 

The problem from an economic perspective is that setting a minimum wage at a living wage level still does not guarantee access for people to a job with a living wage.  The government can mandate a minimum wage but the government cannot mandate that a job is available (unless the government will hire anyone at at living wage who cannot find a job.)

[Katy]

2 minutes ago, Bootsie said:

The problem from an economic perspective is that setting a minimum wage at a living wage level still does not guarantee access for people to a job with a living wage.  The government can mandate a minimum wage but the government cannot mandate that a job is available (unless the government will hire anyone at at living wage who cannot find a job.)

Of course not. But most businesses will figure out how to pay the minimum if they need the help. Most jobs around here pay $15/hour just because there aren’t enough employees. DH’s company used to require a 2-year degree for factory workers. Not anymore. Some of the factories have billboards advertising $18/hour with a $2,000 sign on bonus if you have a high school diploma, a clean criminal history, and can pass a drug test. I’m in the rural Midwest, an hour from a city anyone outside the state would have heard of. And that’s not including a slow ramp up over the course of 8 years, it’s now.

Saying it will cause job loss is misleading because it will only cause UNSTABLE job loss.

[fraidycat]

Raising wages and cutting hours like the Target story is an asshole-ish thing for companies to do... and yet, gives the worker additional time freedom to get another job, start a side hustle of some sort, or earn a certificate or degree while still making "approximately the same amount".

I still see that as a net benefit. 🤷🏻‍♀️

[Bootsie]

5 minutes ago, Katy said:

Of course not. But most businesses will figure out how to pay the minimum if they need the help. Most jobs around here pay $15/hour just because there aren’t enough employees. DH’s company used to require a 2-year degree for factory workers. Not anymore. Some of the factories have billboards advertising $18/hour with a $2,000 sign on bonus if you have a high school diploma, a clean criminal history, and can pass a drug test. I’m in the rural Midwest, an hour from a city anyone outside the state would have heard of. And that’s not including a slow ramp up over the course of 8 years, it’s now.

Saying it will cause job loss is misleading because it will only cause UNSTABLE job loss.

What do you mean that it will cause unstable job loss?  I am not sure what unstable job loss means.  

Saying that raising the minimum wage will lead to some job loss is in line with economic theory.  

Because manufacturers in your area are paying $15 per hour because of local labor market conditions and worker productivity, does not mean that a firm in a different are with a different labor market and in a different industry will do so.   

[Carol in Cal.]

14 minutes ago, fraidycat said:

Raising wages and cutting hours like the Target story is an asshole-ish thing for companies to do... and yet, gives the worker additional time freedom to get another job, start a side hustle of some sort, or earn a certificate or degree while still making "approximately the same amount".

I still see that as a net benefit. 🤷🏻‍♀️

Except that a job requirement is to be available whenever called in at lot of these big retail firms that have long hours of operation.  So the person is essentially restricted but not paid.

[Carol in Cal.]

18 minutes ago, Katy said:

Of course not. But most businesses will figure out how to pay the minimum if they need the help. Most jobs around here pay $15/hour just because there aren’t enough employees. DH’s company used to require a 2-year degree for factory workers. Not anymore. Some of the factories have billboards advertising $18/hour with a $2,000 sign on bonus if you have a high school diploma, a clean criminal history, and can pass a drug test. I’m in the rural Midwest, an hour from a city anyone outside the state would have heard of. And that’s not including a slow ramp up over the course of 8 years, it’s now.

Saying it will cause job loss is misleading because it will only cause UNSTABLE job loss.

I’ve seen this, but it’s also true that the burden falls much more heavily on small businesses for whom one extra hire is a larger proportion of their workforce.  Debating whether to make that hire is much harder and more like to hit a  dead no the higher the minimum wage is.  

I find the tilt in this country toward large, arguably monopolistic businesses to be alarming and consumer-unfriendly.  

Regarding factory workers, my husband grew up in Milwaukee, and it will be a very long time and a lot of raises beyond $18/hour before the rust belt factory workers are even making the same nominal amount that they were before, let alone the same inflation adjusted rate.

[BusyMom5]

25 minutes ago, Katy said:

Of course not. But most businesses will figure out how to pay the minimum if they need the help. Most jobs around here pay $15/hour just because there aren’t enough employees. DH’s company used to require a 2-year degree for factory workers. Not anymore. Some of the factories have billboards advertising $18/hour with a $2,000 sign on bonus if you have a high school diploma, a clean criminal history, and can pass a drug test. I’m in the rural Midwest, an hour from a city anyone outside the state would have heard of. And that’s not including a slow ramp up over the course of 8 years, it’s now.

Saying it will cause job loss is misleading because it will only cause UNSTABLE job loss.

I'm glad there is a stable factory in your area,  but you projecting your local economy on MY area is exactly why I do not believe in any Federal minimum wage.  The wages are higher bc the factory wants to attract good, stable workers.  I clearly stated that where I live- rural, no factories or big chain stores, we do not have enough economy to support this.   I guess you don't believe me 🤷‍♀️  It will cause job loss in small, rural areas with a small economy, especially those which have a high number on people on fixed incomes. It will be harder on self-employed and small businesses who want to expand slowly, but can barely afford to.  When your entire county has 10K people in it, there is only so much $economy$ to work with.  I guess we are just an unstable economy according to you?   Its very important to those who live here are are watching our small town die.  This will accelerate that- and many don't realize or care.  

[Tina]

2 hours ago, Quill said:

Does that happen, though? (I’m sincerely asking.) Do a lot of employers say, “That’s it! If I have to pay you $———/hr, I’m just laying you off instead!”? Don’t employers generally have employees in the first place because they need someone to do the job? 

We used to have employees. We never chose to let someone go rather than pay them more. 

Already stated above.

Edited March 3, 2021 by Tina

[Bootsie]

The Budgetary Effects of the Raise the Wage Act of 2021 (cbo.gov)

Here is a report by the Congressional Budget Office that estimates that employment would drop by 1.4 million by 2025 with an increase in minimum wage to $15.  

[SKL]

I would also remind people that in the "old days," in addition to a "minimum wage," they had lower "student/training wages" for entry level employees.

[fraidycat]

1 hour ago, Carol in Cal. said:

Except that a job requirement is to be available whenever called in at lot of these big retail firms that have long hours of operation.  So the person is essentially restricted but not paid.

Which is a whole other discussion to be had re: labor laws and workers' rights. 

[Carol in Cal.]

1 minute ago, fraidycat said:

Which is a whole other discussion to be had re: labor laws and workers' rights. 

True.

And trafficking.  

And borderline slave labor.

When I took industrial relations in college (which was a very long time ago), a woman in my class’s mother was an immigrant from China who did not speak English and who worked in a sewing sweatshop for below minimum wage.  My classmate described this situation as—the workers were all women in that exact demographic.  They could not get any other jobs that were remotely congenial.  The owner was culturally similar, and gave them ‘extras’ that made them feel very at home there and a bit indebted to him even though he underpaid them.  They had much better working conditions than they would have had in China so they were pretty grateful to him all around.

The NLRB was alerted to this situation and came in and inspected.  They were able to prove that the owner owed a lot of back pay and overtime pay, and they made him pay that out.  

Then (and this was mind boggling to me at the time but I get it now) the woman, one by one, slipped the money back to the owner.  They felt sorry for him, and like the government was making them into dishonest workers because they had agreed to work for less.

My classmate was SO exasperated by this end result.  

I suspect that my former nail salon has the same exact dynamic.  That is why I don’t go there for pedicures anymore.

[Murphy101]

4 hours ago, Bootsie said:

Yes, this might not be said to a worker's face, but it is what happens.  If we have to pay you $__ we can hire someone in India to do your job; if we have to pay you $_ we will get Ipads to take orders rather than paying you to do so...  This will occur more in some industries than other industries--industries where inputs are much more substitutable and work can be performed remotely or the good imported.

This has been happening for at least 25 years. In every industry that possibly can do it. 

3 hours ago, Bootsie said:

Or, is the problem that the people are charging prices that are too high for a person who is a low-skilled worker to pay?  I am not sure how you separate these out.  I am not sure why price controls in the labor market, rather than the goods market, would be the way to address this issue.  

We have a lot more price controls and manipulation in goods than most people know. Some make it worse, some make it lots cheaper thanks to government buy ins/outs. 

3 hours ago, Quill said:

I mean that a lot of people who are not pimply-faced teenagers earning pizza money absolutely need their minimum wage job, which is the opposite of what the person making this argument thinks. I don’t know that I would say most...I don’t know what the percentage actually is. Is just think it’s many more people than the usually comfortably-paid person making this argument realizes. 

I do too. I do not care who they are, everyone should get equal pay for equal work.

1 hour ago, Carol in Cal. said:

Except that a job requirement is to be available whenever called in at lot of these big retail firms that have long hours of operation.  So the person is essentially restricted but not paid.

Yep. This is a HUGE problem. 

[frogger]

Most people want life to be fair and don't want people to be stuck in crappy circumstances the real question is how to do that. I can think of so many that relate to our ridiculous prices in healthcare, housing, and education. 

 

I think a Federal minimum wage is the worst. Whatever criteria you use for a minimum wage in Silicon Valley will give you dramatically different levels of employment than you would see in Chickasaw County, Ms. Not to mention Puerto Rico since they have a lower min wage than the Federal and it's still killing them. 

 

If you go to https://livingwage.mit.edu/counties/28017 you can see the living wage for Chickasaw County, MS is $12.51 an hour. The median  income is  $20,000.  People are asking that the price be set 33% above the median wage! That's ludicrous. 

 

In Santa Clara the living wage according to the MIT calculator is $27.29. The median income is $50, 677. 

 

If the min. wage can be 20% higher than the living wage in Mississippi, why can't you make it 20% higher than the living wage in Santa Clara. Seems that would be fair. So the min. wage in Santa Clara should be $32.75.

The fact is that some businesses can absorb the cost and it may raise wages for some workers and that's good. The bad thing is that it will cost others their jobs. Now, if the min wage is a reasonable amount compared to worker substitutes or prices can be raised to consumers to cover the costs it will have less of an impact on total unemployment. The one nice thing with minimum wage is, if you raise costs to pay employees more your competitors won't undercut you. Most employers, especially small businesses who really get to know their employees would like to pay their employees well but will be put out of business by consumers who always want the best price and don't personally know the employees. That is one way min. wage  is helpful. 

 

Minimum wage decisions can be used in a marginal way and within the scope a market can handle. If you can't figure that out just ask yourself, what if we just raised minimum wage to $100 an hour. I think most people could see effects then. 

 

I honestly think wage subsidies would make more sense. In the modern digital age, low wage workers needn't wait until they file taxes to receive a portion of their subsidy. It could just be integrated into their check. 

 

 

 

Edited March 3, 2021 by frogger
Left out a sentence

[Bootsie]

35 minutes ago, frogger said:

Most people want life to be fair and don't want people to be stuck in crappy circumstances the real question is how to do that. I can think of so many that relate to our ridiculous prices in healthcare, housing, and education. 

 

I think a Federal minimum wage is the worst. Whatever criteria you use for a minimum wage in Silicon Valley will give you dramatically different levels of employment than you would see in Chickasaw County, Ms. Not to mention Puerto Rico since they have a lower min wage than the Federal and it's still killing them. 

 

If you go to https://livingwage.mit.edu/counties/28017 you can see the living wage for Chickasaw County, MS is $12.51 an hour. The median  income is  $20,000.  People are asking that the price be set 33% above the median wage! That's ludicrous. 

 

In Santa Clara the living wage according to the MIT calculator is $27.29. The median income is $50, 677. 

 

If the min. wage can be 20% higher than the living wage in Mississippi, why can't you make it 20% higher than the living wage in Santa Clara. Seems that would be fair. So the min. wage in Santa Clara should be $32.75.

The fact is that some businesses can absorb the cost and it may raise wages for some workers and that's good. The bad thing is that it will cost others their jobs. Now, if the min wage is a reasonable amount compared to worker substitutes or prices can be raised to consumers to cover the costs it will have less of an impact on total unemployment. The one nice thing with minimum wage is, if you raise costs to pay employees more your competitors won't undercut you. Most employers, especially small businesses who really get to know their employees would like to pay their employees well but will be put out of business by consumers who always want the best price and don't personally know the employees. That is one way min. wage  is helpful. 

 

Minimum wage decisions can be used in a marginal way and within the scope a market can handle. If you can't figure that out just ask yourself, what if we just raised minimum wage to $100 an hour. I think most people could see effects then. 

 

I honestly think wage subsidies would make more sense. In the modern digital age, low wage workers needn't wait until they file taxes to receive a portion of their subsidy. It could just be integrated into their check. 

 

 

 

Yes, the farther above the equilibrium wage rate the minimum wage is set the greater the unemployment and distortion it causes.  For a striking example, you can see what happened in Puerto Rico Unemployment in Puerto Rico - Foundation for Economic Education (fee.org) when the US minimum wage was placed on it.  

Of course, the places that have high equilibrium wage rates would like to enforce their high wage on places with lower equilbirum wages.  If the equilbrium wage in the Seattle area is $18 but $9 in the DFW area, politicians in Washington have an interest in pushing for an $18 minimum wage across the country.  It would not distort their labor markets, but it would cause unemployment problems in Texas.  It would be done so that Boeing, or some other major employer, doesn't leave the area for a place where it can produce at a cheaper cost.  

[frogger]

2 hours ago, Bootsie said:

Yes, the farther above the equilibrium wage rate the minimum wage is set the greater the unemployment and distortion it causes.  For a striking example, you can see what happened in Puerto Rico Unemployment in Puerto Rico - Foundation for Economic Education (fee.org) when the US minimum wage was placed on it.  

Of course, the places that have high equilibrium wage rates would like to enforce their high wage on places with lower equilbirum wages.  If the equilbrium wage in the Seattle area is $18 but $9 in the DFW area, politicians in Washington have an interest in pushing for an $18 minimum wage across the country.  It would not distort their labor markets, but it would cause unemployment problems in Texas.  It would be done so that Boeing, or some other major employer, doesn't leave the area for a place where it can produce at a cheaper cost.  

I hadn't thought about that aspect. It makes no sense to set the same minimum wage nationwide so you would wonder who is pushing this but there is a logic to it being a benefit to high wage areas.

[Ausmumof3]

13 hours ago, Quill said:

I agree with the sentiment but I wonder how true that is for certain low-margin work. Grocery stores springs to mind. My understanding is that margins are tight in the grocery business and you have to account for large losses. If the store is known for low prices (i.e., Aldi), how does that work? 

I believe Aldi here are one of the better supermarkets in terms of pay and conditions for staff.  They cut corners elsewhere though of course.  I know the truck drivers have a problem with them over safety.

[Lanny]

I like the idea but what might seem incredibly simple can actually be something incredibly complicated with unintended consequences in the USA.

I like the idea of periodic increases to try to keep up with the local COL.

I like the idea of the Minimum Wage being indexed to the local inflation rate in the COL.

I try to look at this from the viewpoints of employees and employers. 2 or 3 months ago when the idea of a $15 USD per hour Minimum Wage was being discussed, I read a story about a man in Ohio who owned 3 Pizza restaurants. He said if they raised it to $15, the price of his $12 Pizza would need to increase to $19 and that in his part of Ohio people are not going to pay $19 for that Pizza.

And then there is the impact of eliminating 1.4 million jobs if the Minimum wage is increased to $15 per hour. Those people who find themselves unemployed may find that they are unemployed permanently  because of their lack of skills and/or experience.

 

A few days ago, Republicans proposed a $10 per hour Federal Minimum wage with COL increases. That has IMO a better chance of being enacted. The current Federal Minimum wage has not been increased for approximately 10 years.

But then, when it was the $15 an hour idea, I read that for someone in a low COL area that might do the job, but in a place like Washington DC they would need approximately $35 an hour to maintain that kind of living standard?

There are so many things that can be impacted by this. The main thing in my mind is that 1.4 million people who are working today would be very unhappy if their jobs are permanently eliminated and they become permanently unemployed.

As always there are no simple solutions to complex problems.

[frogger]

I also wanted to add that some studies have shown that unemployment is affected long term more than short term. There is typically a lot of up front fixed costs to businesses at the start and after the fixed costs are covered the variable costs take over. When a business is just getting going it will have extremely high fixed costs getting started, systems for workers can typically be more streamlined and efficient as managers learn more about the business. When a new business is deciding whether to buy machines for self serve or hire employees for example, they don't have systems already streamlined. Workers will need trained while management is learning at the same time so it is more expensive than just keeping workers where everything is already in place.

The fixed costs of more automation is more expensive at the beginning but they know the costs once covered will decrease dramatically and they aren't looking specific employees in the face.  An older business will have to sink more capital to switch everything up. Plus, they will have to lay off workers which is usually difficult for people. In other words, it is easier for a new business to do things differently than for an older business to rearrange it's business model and perhaps even it's physical layout and buy new equipment, etc.

[Bootsie]

2 hours ago, Lanny said:

There are so many things that can be impacted by this. The main thing in my mind is that 1.4 million people who are working today would be very unhappy if their jobs are permanently eliminated and they become permanently unemployed.

As always there are no simple solutions to complex problems.

Not only will those who would not have a job because of the rising unemployment be unhappy, a major concern I have is that those 1.4 million people are probably not equally distributed across society.  The very people who are the intended beneficiaries (low-skiiled workers who are trying to raise a family) are likely to be disproportionately in the 1.4 million without a job while the high school kids working for extra spending money are likely to be disproportionately underrepresented in that 1.4 million without a job.

[Lady Florida.]

I had to stop or I would reach the multi-quote limit. I don't remember what it is but I was probably getting close. 

Florida minimum is more than the current federal minimum and has been for some time. Not much higher but higher. It's currently at $8.56. Thanks to the voters in 2020 we will be heading for a gradual $15 minimum. Starting Sept. 1st of this year it will go to $10 and will go up $1 a year for the next five years. 

 

20 hours ago, Quill said:

I agree with the sentiment but I wonder how true that is for certain low-margin work. Grocery stores springs to mind. My understanding is that margins are tight in the grocery business and you have to account for large losses. If the store is known for low prices (i.e., Aldi), how does that work? 

Aldi already pays more than the federal minimum. Actually, several large retail companies do.

https://www.thesimpledollar.com/make-money/eight-retail-jobs-with-decent-pay-and-real-benefits/

 

19 hours ago, Pawz4me said:

The current proposal is that it will be gradually raised to $15/hour over several years’ time. Not one huge jump. 

Exactly. I think some people aren't aware that it's gradual. A jump to $15 an hour would definitely hurt most small businesses. A gradual increase gives them time to prepare. 

19 hours ago, Katy said:

The whole idea that we’re going to get rid of jobs because of automation is ridiculous to me when viewed in the scheme of history. Jobs get replaced with technology. That’s happened for all time. Freeing up that labor leads to innovation & entirely new sectors opening up. Less than half the people I went to college with are working in a field that existed 20 years ago. Innovation help jobs, even as it changes them. 

Yep. All those people who cared for carriage horses lost jobs when automobiles took over yet I don't think any of us would want to go back to horses as a means of transportation. Not even those of us who think we should move away from gasoline powered vehicles want to go backwards. 

 

18 hours ago, City Mouse said:

One problem that I see with increasing the federal minimum wage is that it does not take into account the differences in the cost of living in different areas.

 

This is true but there still needs to be a bottom line. The bottom line we have now is abysmal. 

 

18 hours ago, happysmileylady said:

I think we have a fundamental difference of perspective because I think it's wrong to pay for a job based on what the person doing the job needs to live.  I think the job should pay according to how much is actually required.

 

I agree. We definitely don't want to go back to a time when men were paid more because they supposedly had a family to support. Or married men were paid more than single people regardless of sex, for that same reason. The skill level + experience + education in the specific field should be the thing that determines pay. But we still need a bottom line. 

 

18 hours ago, BusyMom5 said:

I do not support a Federal Minimum Wage, regardless of the amount proposed. 

 

We already have a federal minimum wage. The proposal isn't about creating one or eliminating it. It's about increasing the amount that's currently considered minimum.

18 hours ago, happi duck said:

It's inhumane, in my opinion, to judge whether a task is worthy of a *living* wage.  All jobs, done well, take some sort of skill/gift.  The jobs society thinks "anyone can do that" still require skill to do *well*.  Anything customer facing needs a ton of skill to do well!

 

Yes, and we all learned just who is "essential" this past year. Many of the people who fit that so important category currently make a pittance. 

17 hours ago, fraidycat said:

Raising wages and cutting hours like the Target story is an asshole-ish thing for companies to do... and yet, gives the worker additional time freedom to get another job, start a side hustle of some sort, or earn a certificate or degree while still making "approximately the same amount".

I still see that as a net benefit. 🤷🏻‍♀️

The problem is that health care is still tied to employment for most people, and that if you get less than 30 hours a week or 130 hours a month they don't have to offer it. Therefore large companies have been known to give employees just under the required hours so they don't have to. It doesn't matter how many side jobs you have if you can't get health care through any of them. It's another argument in favor of universal health care, but that's another thread altogether. 

[Bootsie]

1 hour ago, Lady Florida. said:

I Yep. All those people who cared for carriage horses lost jobs when automobiles took over yet I don't think any of us would want to go back to horses as a means of transportation. Not even those of us who think we should move away from gasoline powered vehicles want to go backwards. 

 

There is a big difference in change being due  to improved technology and change being due to a distortion of markets.  Change that is due to something like a combustion engine being economically feasible to produce will lead to growth and increased GDP.  Change due to a distortion in price can actually cause a DECREASE in GDP.

[bookbard]

Thinking about this, it's again about pushing welfare onto the individual rather than the state. So rather than the government taking responsibility for the poverty of so many people (which is linked to decisions such as not providing health care), it's saying it's the responsibility of all employers, whether they're in very small businesses or in massive conglomerates.

I think a better idea would be to have a "maximum" wage, where you can't earn over a million dollars, and you actually have to pay tax. Companies would have more money to pay their workers, the government would have more money to support people in need. And of course healthcare needs to be the no.1 priority. All those things would lift the economy - the world really doesn't need more super rich people. 

[Carol in Cal.]

23 hours ago, Plum said:

Huh I didn’t know that.
Isn’t 5 years a long time at retirement age? A lot of people die when they stop working. They like to keep busy and active. I still don’t see why people can’t access money they have put into the system and work. 

Well, while they are still working they are also paying into SS.  The best thing would be not to start taking it until you’re really done working.  But worst case you’re talking about ages 62 to 67, and that’s still pretty young.

[Selkie]

On 3/2/2021 at 5:54 PM, Quill said:

Total tangent, but a few days ago, at work, I received a phone call about updating Google location info for our firm. I’m 98% certain this was an AI communication, but I gotta say, it was hard to tell and I didn’t think so at first. It totally sounded like a real human being. The only giveaway was the amount of delay when I would answer and “the caller” would confirm. Like, I would say, “We are closed on the weekends,” and there would be a pause of several seconds and the “caller” would say, “I’m sorry, did you say you are closed Saturday and Sunday?” I’m like, duh, it’s a law firm, doofy, yes we’re closed on Saturday and Sunday. 

 

Off topic, but beware of Google-related calls, as this is a very common ploy used by scammers. We get those calls constantly at our workplace.