Author Topic: Thoughts on Minimum Wage?  (Read 13758 times)

Leisured

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Re: Thoughts on Minimum Wage?
« Reply #50 on: July 21, 2017, 04:52:40 AM »
Mechanization replaced horses a century ago, and horses became unemployable because they cannot be trained to do anything else than pull wagons or plows.  Farm workers were laid off a century ago, but farm workers can retrain to work in factories. As factories become automated, can these redundant workers be retrained? Some will, many will not Eventually many workers will be in the same position as horses a century ago where they cannot be retrained.

Suppose all workers could become doctors, lawyers, engineers. How many of these people does the economy need?

This time it really is different.


sokoloff

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Re: Thoughts on Minimum Wage?
« Reply #51 on: July 21, 2017, 05:37:30 AM »
Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.
Does a high minimum wage have any effect on the ability of these youth to get their first job where they can start developing skills?

Does a high minimum wage have any effect on where companies can compete doing manufacturing activities?
Australia has many problems, but our high minimum wage isn't among them, and dropping it to US levels wouldn't solve any, indeed it'd create more: I already noted the US has a higher social welfare bill per capita than Australia, as the public purse has to make up for private stinginess. Employed people in Australia don't need welfare.
If you doubled the minimum wage again, employed people would have even better outcomes. It's the unemployed people who are harmed by high minimum wages, not the employed people.

zolotiyeruki

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Re: Thoughts on Minimum Wage?
« Reply #52 on: July 21, 2017, 08:23:25 AM »
Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 
It's worth noting that all costs imposed on companies are passed on to the consumer or investor.  That's you and me.  You will pay for that higher minimum wage whether you want to or not.  Either you'll have to accept lower returns as an investor, or higher prices as a consumer.
Quote
A person who works full time should make a living wage.
This, unfortunately, flies in the face of the laws of economics.  What you're arguing here is that a person with zero skills (who you would hire at minimum wage) should be paid just as much as, say, the guy who's been swinging the hammer or flipping the burgers for several years and is now a manager (at, say, $15).

I think we can all agree that it would be desirable that everyone who works will earn a living wage, but the work that some people do simply does not bring enough value into the economy to justify higher wages.  When you increase the cost of a good or service, you'll see less demand.  Raise the cost of a fast food worker, and you'll get fewer people hiring fast food workers.

Jrr85

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Re: Thoughts on Minimum Wage?
« Reply #53 on: July 21, 2017, 12:17:11 PM »
There are a lot of people who will never get out of minimum wage or low paying jobs.  It can be b/c of low IQ, disability, poor upbringing, disadvantaged background or maybe they are just plain unmotivated.   

My problem with them not making a living wage, is that the way most of these people get by is by government provided services - food stamps, HUD apartments, Medicaid, etc.

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 

A person who works full time should make a living wage.

So a person of low IQ that can't be productive enough to earn a "living wage" should be legally barred from working? 

A person's worth as a human being is not tied to their economic productivity, and just because a person is less productive than you think they should be, that doesn't mean they shouldn't be allowed to work and earn what they can, even if they need additional help on top of what they can earn. 


bender

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Re: Thoughts on Minimum Wage?
« Reply #54 on: July 21, 2017, 12:38:45 PM »
A person's worth as a human being is not tied to their economic productivity, and just because a person is less productive than you think they should be, that doesn't mean they shouldn't be allowed to work and earn what they can, even if they need additional help on top of what they can earn. 

Well said.

bender

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Re: Thoughts on Minimum Wage?
« Reply #55 on: July 21, 2017, 01:05:21 PM »
This article showing pizza shop automation should help prove the point about minimum wage displacing more workers than it helps.  I would bet there would be less investment in robots if the pizza shop could hire workers for their market and productivity value, vs. mandated minimum wages.

https://finance.yahoo.com/news/pizza-making-robots-want-change-world-175742922.html

Quote
Eventually, Garden and his cofounder Julia Collins intend to replace all of the humans in their pizza shop.


CindyBS

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Re: Thoughts on Minimum Wage?
« Reply #56 on: July 21, 2017, 02:55:55 PM »
There are a lot of people who will never get out of minimum wage or low paying jobs.  It can be b/c of low IQ, disability, poor upbringing, disadvantaged background or maybe they are just plain unmotivated.   

My problem with them not making a living wage, is that the way most of these people get by is by government provided services - food stamps, HUD apartments, Medicaid, etc.

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 

A person who works full time should make a living wage.

So a person of low IQ that can't be productive enough to earn a "living wage" should be legally barred from working? 

A person's worth as a human being is not tied to their economic productivity, and just because a person is less productive than you think they should be, that doesn't mean they shouldn't be allowed to work and earn what they can, even if they need additional help on top of what they can earn.

No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company. 

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.

bender

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Re: Thoughts on Minimum Wage?
« Reply #57 on: July 21, 2017, 03:14:17 PM »
I don't think your example of full time caregiver is relevant.  If you get paid $0, that's because you're doing this work as charity.  You must have the means to support yourself from other sources (Maybe you're FI?).

Also you're not addressing the fact that paying a minimum living wage just doesn't work.  Burger King isn't compelled to hire low ability people for more than they're worth.  Markets and companies are efficient.  They will develop a solution using technology to eliminate those jobs when the economic incentives are strong enough to do so.  See my post above about the pizza robot. 

I'm not trying to be cruel to those that can't produce enough to survive on their own.  I think the government (taxpayers) must step in and help them.  Same goes for the people who can't work at all.  We can't force corporations to hire them to sit around and produce nothing.  The country is rich enough to provide a basic means for non-productive people to live somewhat comfortably.  We also need to make up the difference for those that produce less than what it takes to live somewhat comfortably.

FINate

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Re: Thoughts on Minimum Wage?
« Reply #58 on: July 21, 2017, 03:14:55 PM »
No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company.

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.

How many countries have minimum wage, and of those how many have approximately doubled it over a short period? Also, I would much prefer we do what's healthy for the economy rather than aiming for avoidance of economic collapse.

As has already been stated on this thread, the push to increase minimum wage is supposedly for the benefit of low wage workers, so the question of how it impacts the overall economy is of secondary concern.

So other than cutting CEO pay or making less profit the company could also cut hours, increases automation, replace low skill workers with higher skilled workers, relocate...or any number of other options/combinations that end up hurting low wage workers in the end.  This is what Seattle is experiencing in their push to $15:

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city.

On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.040a7933d61c


FINate

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Re: Thoughts on Minimum Wage?
« Reply #59 on: July 21, 2017, 03:21:44 PM »
This article showing pizza shop automation should help prove the point about minimum wage displacing more workers than it helps.  I would bet there would be less investment in robots if the pizza shop could hire workers for their market and productivity value, vs. mandated minimum wages.

https://finance.yahoo.com/news/pizza-making-robots-want-change-world-175742922.html

Quote
Eventually, Garden and his cofounder Julia Collins intend to replace all of the humans in their pizza shop.

People can also read about Flippy the hamburger making robot (http://fortune.com/2017/03/14/miso-robotics-flippy-burger-flipping-robot/).

And I'm seeing a lot more self order/checkout kiosks popping up now that California has passed legislation to phase in a $15 minimum.

bender

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Re: Thoughts on Minimum Wage?
« Reply #60 on: July 21, 2017, 03:38:19 PM »
I use the self-checkout at Walmart and Lowes all the time.  They've reduced cashiers to the point where there's only one or two lines with humans open at any time. 

There's usually one human manning a dozen self-checkouts at Walmart.  Now that person's productivity is the same as what several individual cashiers used to do.  It's a huge improvement in efficiency because during slow times, there's only one person sitting around and during busy times that one person scales up to handle many self-checkouts.  Now Walmart should be able to pay this person a living wage, but many others that don't have the skill required are out of work.

StudentEngineer

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Re: Thoughts on Minimum Wage?
« Reply #61 on: July 21, 2017, 05:31:25 PM »
I'm not trying to be cruel to those that can't produce enough to survive on their own.  I think the government (taxpayers) must step in and help them.  Same goes for the people who can't work at all.  We can't force corporations to hire them to sit around and produce nothing.  The country is rich enough to provide a basic means for non-productive people to live somewhat comfortably.  We also need to make up the difference for those that produce less than what it takes to live somewhat comfortably.

I would just like to add that the governmental support for those who are non productive should be structured in such a way as to not incentivize becoming a non productive member of society because you , for instance, have enough money to pay for TV, recreational activities and as much fast food as you'd like.  It should provide the minimum needed to survive - shelter that isn't particularly desirable but completely habitable, enough for a very basic sustenance and something in the way of medical care.  Past that anything else should require the individual to engage in a consensual trading of goods and labor in a free market economy.

Also what about introducing these people to MMM type concepts and solve the issue from the personal standpoint rather than having the government dictate what the correct route is?  These people all have free access to public libraries and the internet which opens up the entire world to them, anything that they would like they can learn.  I'd rather approach this problem from the personal level than the governmental level at first.
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Leisured

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Re: Thoughts on Minimum Wage?
« Reply #62 on: July 22, 2017, 11:57:31 PM »
I am always amazed at the way Americans express opinions on social matters without bothering to look at the experience of other rich countries. ...
The Australian attitude is...

Finally, it helps to remember that many Americans don't think of themselves as poor, but as the temporarily embarrassed rich. They're so certain that they're going to be rich eventually that they'll vote against their own current interests so they won't be held back once they've taken their rightful spot at the top of the pile. Most other countries seem to have a better grasp on class and that mobility between classes isn't all that easy. While it's a tiny percentage of the population that moves between classes in the US, there are enough rags to riches stories here that people don't think it crazy to think they're going to be rich, and to keep things relevant, that minimum wages don't need to move because it won't affect them.

Thank you for the perceptive social comment, omachi. Karl Marx would call such an attitude by poor Americans as 'false consciousness.'  Social beliefs can have a powerful effect on economic behavior. i have heard of slot machine rooms in Las Vegas that are so large that somewhere a slot machine announces a win every few minutes, thus creating the illusion that the odds of winning are larger than they really are.


Kyle Schuant

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Re: Thoughts on Minimum Wage?
« Reply #63 on: July 23, 2017, 09:14:57 PM »
If you doubled the minimum wage again, employed people would have even better outcomes. It's the unemployed people who are harmed by high minimum wages, not the employed people.
If a widget costs me $1 to produce, I may sell more at $2 than $100. But I only need to sell 1 at $100 to make $99 profit, and it may be easier to do that than sell 99 at $2 for $99 profit. This does not mean I should try to sell it for $1,000. So there is some optimum price point where I maximise profit on the widget. This will vary based on the product, the branding (iphones cost no more than android phones to make, but branding means they can sell for more), and so on.


Likewise, I would think that there will be an optimum minimum wage, low enough to encourage businesses to hire, and high enough that the person can spend and increase aggregate demand in the economy as a whole.

Since the US has higher unemployment, lower median income, and a higher per capita welfare bill than Australia, it is evident that the optimum level lies somewhat above the USA's minimum wage, but probably not a lot beyond Australia's.

Again, most here speak of theory in justifying a low minimum wage. It is perhaps inevitable that a frugality group will attract the stingy and heartless, since some people confuse being frugal with being miserly. So when faced with evidence from other countries that raising the minimum wage does not lead to economic collapse and mass unemployment, they retreat into theory.

I don't mind paying more for things if it means that others will be able to earn more, and be less dependent on welfare; what I lose on spending more will be gained in lower taxes, after all.
« Last Edit: July 23, 2017, 09:16:52 PM by Kyle Schuant »
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dilinger

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Re: Thoughts on Minimum Wage?
« Reply #64 on: July 24, 2017, 12:20:50 AM »
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.
« Last Edit: July 24, 2017, 12:26:05 AM by dilinger »

Johnez

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Re: Thoughts on Minimum Wage?
« Reply #65 on: July 24, 2017, 02:13:08 AM »
Minimum wage is exactly that-the entry point into the market place for those with few skills or lack of experience. Raising the minimum wage to "livable" standards addresses the problem of poverty without accounting for the fallout

Raise minimum wage to $15 an hour:

What happens to all the workers making $10, 11, 12, 13, 14 an hour? Ya just equalized the bottom rung of society. Congrats. It won't last long as factories need to raise pay to attract semi-skilled reliable employees and are forced to raise prices on widgets to make the math work. Widgets that are going to eat up all of that wage increase burger flippers at McD's got anyway....

So why not find a way to increase the opportunities for those on the lowest rung? Giving a temporary benefit that will be taken by inflation anyway does nothing. We need more middle class jobs.

nara

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Re: Thoughts on Minimum Wage?
« Reply #66 on: July 24, 2017, 07:15:36 AM »
As a typical W2 employee most of my life, I was all on board with large pay increases. However, now as a small business owner, I have a different perspective and can see how such a pay increase would be devastating to small businesses. We pay well above minimum wage to our professional employees, but occasionally hire college students to help with office work  and would not be willing to pay them $15 an hour. A huge minimum wage increase would only be another benefit for large business and corporations and smaller ones will be at huge disadvantage.

zolotiyeruki

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Re: Thoughts on Minimum Wage?
« Reply #67 on: July 24, 2017, 07:52:37 AM »
Since the US has higher unemployment, lower median income, and a higher per capita welfare bill than Australia, it is evident that the optimum level lies somewhat above the USA's minimum wage, but probably not a lot beyond Australia's.

Again, most here speak of theory in justifying a low minimum wage. It is perhaps inevitable that a frugality group will attract the stingy and heartless, since some people confuse being frugal with being miserly. So when faced with evidence from other countries that raising the minimum wage does not lead to economic collapse and mass unemployment, they retreat into theory.
I'm still waiting for the evidence that higher minimum wages increase employment rates.  There is already plenty of evidence to the contrary. Also, considering that different countries have different welfare programs, comparing them is a meaningless measure.

I think it is also very disingenuous (and outright insulting, if I were the type to be offended) to conflate opposition to an increased minimum wage with being stingy and heartless.  On the contrary, those of us who oppose raising the minimum wage see how it would hurt those it is intended to help, by effectively banning many types of unskilled labor.
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/
I took the time to read those two articles, and I would say that it's possible the UW study was flawed, at most.  The exclusion of the national chain workers in the UW actually biased the results in favor of hiking the minimum wage, as the larger chains were more likely to cut hours than a local-only business.  Besides, as the UW researcher stated in an interview, the excluded 38% would have to be seeing MASSIVE growth in order to compensate for the 9% losses in the remaining 62%.  And they're not.

It's also worth pointing out that immediately after UW shared an early draft of their study with the mayor's office, the major's office contracted a UC Berkeley economics professor to run a similar study and publish his results before UW could

FINate

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Re: Thoughts on Minimum Wage?
« Reply #68 on: July 24, 2017, 09:23:55 AM »
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.

As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

We also have a "shortage of employees" here in Silicon Valley. But we also have a surplus of minimum wage workers. The shortage is for skilled workers. The real question is how has minimum wage increases affected unskilled workers: jobs, hours, total compensation, and such. This is what this "shitty" study is designed to identify in the data. It found that the increase actually ended up hurting low skill workers. High skill workers were, as expected, unaffected...they can go on patting themselves on the back thinking they really made a difference.

Jrr85

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Re: Thoughts on Minimum Wage?
« Reply #69 on: July 24, 2017, 09:55:36 AM »

No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company. 

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.

You are badly confused as to what a minimum wage law does.  It doesn't mandate that low skilled employees be employed at the minimum wage.  It makes it illegal to employ them (or anybody else) at below the minimum wage.  For some workers, the "zone of agreement" extends below and above the minimum wage, and the minimum wage ensures that they won't accept below the minimum wage.  And for some workers, the resulting adjustments due to the minimum wage results in a better job opportunity for them (e.g., monitoring 6 self-checkout lanes may pay better than being a cashier at one lane). 

But for people that aren't productive enough, you are just condemning them to public assistance.  Because they are not as productive as you think they should be, they don't get to work legally at all. 

Again, people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work should still be allowed to work without having to resort to working under the table. 

And other taxpayers shouldn't be required to completely support a person when that person could support themselves in part, just because you are offended that they do not meet some minimum level of productivity.   

A Definite Beta Guy

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Re: Thoughts on Minimum Wage?
« Reply #70 on: July 24, 2017, 02:50:21 PM »
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.

As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

We also have a "shortage of employees" here in Silicon Valley. But we also have a surplus of minimum wage workers. The shortage is for skilled workers. The real question is how has minimum wage increases affected unskilled workers: jobs, hours, total compensation, and such. This is what this "shitty" study is designed to identify in the data. It found that the increase actually ended up hurting low skill workers. High skill workers were, as expected, unaffected...they can go on patting themselves on the back thinking they really made a difference.

There's problems with practically all studies. You can't really run RCTs on small groups of people, let alone huge societies.

There's strong reason to disbelieve the UW results because they are way outside the bounds of what is normally tested. That raises some eyebrows.

The Berkley study makes no sense to me. Synthetic Seattle matches Seattle well prior to the minimum wage. That does not make it a good match for Seattle POST minimum wage increase. In several industries, Synthetic Seattle shows both less employment and wage growth than Seattle...the obvious conclusion is that demand is not as high in those cities and the basket of comparison cities is no longer a good reference point.

If you look at the Berkley study, you can also see that the Seattle total wage tracks the Synthetic Seattle total wage in a rather similar manner. The exception is the Limited Service restaurant category, where Seattle wages massively outpace synthetic seattle.  Unsurprisingly, this is also the ONLY sector where Seattle's employment is EVER stationary, for ANY length of time, which is exactly what you would expect if you think a binding minimum wage reduces employment.

There is a then an explosion of limited service restaurant workers in Seattle right at the end of the data set. That screams "data error." It looks to occur at the same time as the Full-Service restaurant dip. Why? Was something redefined from full service to limited service? Those are extremely odd results.


In general, people are subject to isolated demands for rigor. MY study is perfect. YOUR study is fundamentally flawed, and debunked. You need to prove your claims!
This is probably useful for yourself, in good Bayesian reasoning...like, if you get an entirely unexpected result, you should REALLY question it. Stuff that confirms prior beliefs probably doesn't need to be questioned quite as much.
It's NOT the same if you are engaged in the scientific process, where you should be much more aggressive in your questioning. Particularly if you are on a review board.

But almost all studies are flawed in SOME fashion, which is why you should always be suspicious of that guy who always peddles that single study non-stop because it confirms his beliefs.


dividendman

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Re: Thoughts on Minimum Wage?
« Reply #71 on: July 24, 2017, 04:23:21 PM »
I'm curious why anyone would be for a higher minimum wage instead of an increase in the EITC or a UBI if your goal is to help the working poor.

Optimiser

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Re: Thoughts on Minimum Wage?
« Reply #72 on: July 24, 2017, 05:24:19 PM »
I'm curious why anyone would be for a higher minimum wage instead of an increase in the EITC or a UBI if your goal is to help the working poor.

I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.

zolotiyeruki

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Re: Thoughts on Minimum Wage?
« Reply #73 on: July 25, 2017, 07:22:25 AM »
I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.
I'm curious as to why you think employers should be responsible for taking care of their workers.  The company's job is to make money.  That means they produce something that people are willing to pay money for, and it usually involves paying employees to help deliver the good or service.  We can probably agree that the company is responsible for providing a safe working environment, and paying a wage commensurate with the value the employee adds, but it's not the company's job to ensure a comfortable lifestyle for the employee.  IMO, the responsibility for "taking care of people" lies primarily with the person, then their family, then their community.

bender

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Re: Thoughts on Minimum Wage?
« Reply #74 on: July 25, 2017, 08:10:58 AM »
It's tough to calculate a minimum wage that would support a person.  Are we talking about a single person renting an apartment with roommates, or are we talking about someone with a spouse at home who cares for their 2 young children?

For those that think the company should pay enough to ensure the employee lives above the poverty line, I'd like to hear some thoughts.  Would it be OK for the company to pay the person supporting a family more than the single person?  What if the family had 3 or 4 kids instead?  I can't imagine asking a company to operate in this way, but it seems like some are advocating just that.


A Definite Beta Guy

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Re: Thoughts on Minimum Wage?
« Reply #75 on: July 25, 2017, 03:45:28 PM »

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare. 
Different way I think about this: if the corporation said "okay, we're not going to be in business anymore" and closes up shop, it increases the welfare rolls.

The corporation paying the worker doesn't make the government worse off, it makes the government better off, because the government doesn't have to pay the full bill of someone's livelihood.

It's definitely a subsidy to the individual people receiving alms.

Kyle Schuant

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Re: Thoughts on Minimum Wage?
« Reply #76 on: July 26, 2017, 07:45:05 PM »
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.


Okay :)
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dilinger

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Re: Thoughts on Minimum Wage?
« Reply #77 on: July 26, 2017, 07:47:01 PM »
I said nothing about the Berkeley study.  Instead, I said to stop using the UW study to prove your point, because it is bad science.  I agree that there was some sketchiness regarding the way the whole thing has been handled by Seattle's Mayor, but hey - this is a guy who raped foster children.  I'd trust him as far as I can throw him.

Regarding the Berkeley study, my point still remains:
...considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.

dilinger

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Re: Thoughts on Minimum Wage?
« Reply #78 on: July 26, 2017, 08:04:02 PM »
As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

1) Seattle didn't fund a competing study.  They funded the UW study, that's it.

2) The UW study author IS an anti-minimum wage conservative.  This was known before the results of the study were published: http://seattlish.com/post/150746011266/kshama-sawant-is-not-sure-about-the-guy-heading-up .

bender

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Re: Thoughts on Minimum Wage?
« Reply #79 on: July 26, 2017, 09:05:49 PM »
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.
Okay :)

Yup.  And many of us are arguing that the government/taxpayers should make up the difference for the working poor.  We don't want people to suffer and understand that an arbitrary minimum wage is not the right answer.  Supplemental government assistance is much better.

For example - a company hires two single women at minimum wage.  One becomes pregnant and has a child.  Should the company give the new mom a raise (and not the other woman)?  Of course not - it's the government/taxpayers duty to ensure this family has enough to live, not the company she works for.

zolotiyeruki

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Re: Thoughts on Minimum Wage?
« Reply #80 on: July 26, 2017, 09:14:57 PM »
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.
The income of the posters has no bearing on the validity of their arguments.

A Definite Beta Guy

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Re: Thoughts on Minimum Wage?
« Reply #81 on: July 27, 2017, 08:25:14 AM »
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.
The income of the posters has no bearing on the validity of their arguments.
Pretty much in agreement with this.

omachi

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Re: Thoughts on Minimum Wage?
« Reply #82 on: July 27, 2017, 09:17:18 AM »
I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.
I'm curious as to why you think employers should be responsible for taking care of their workers.  The company's job is to make money.  That means they produce something that people are willing to pay money for, and it usually involves paying employees to help deliver the good or service.  We can probably agree that the company is responsible for providing a safe working environment, and paying a wage commensurate with the value the employee adds, but it's not the company's job to ensure a comfortable lifestyle for the employee.  IMO, the responsibility for "taking care of people" lies primarily with the person, then their family, then their community.

I agree that the minimum wage can hurt people in cases where it pushes labor prices above what the employee adds in value. I also prefer a UBI to a minimum wage*. However, I think you're confusing two things, the value added by the labor and the price that available labor will accept to do the job. They're very different.

How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

So let's look at the price that available labor will accept. MCD is pretty anti-union, just like many other big companies such as Walmart that would be affected by a minimum wage hike. We're probably not going to see the above union scenario play out. The jobs are not particularly skilled labor, so there is a large pool of people who can do it. For a pool of unskilled, unorganized labor, any job is typically better than no job, driving wages down when there's less work than labor. In a strictly rational sense (with no social safety net) the acceptable wage is the minimum necessary to survive. If any particular employee demands a higher wage, MCD can replace them without too much disruption from this pool of cheaper labor.

A minimum wage prevents the push of wages for this unskilled labor to near zero when there is surplus labor. The argument of how much the company should "take care" of their employees is really an argument over where this floor should be. And since we do have social safety nets, that translates to how large of a gap between value added and wage paid the public is willing to subsidize via the social safety net while balancing against how many people are added to the safety net because they can't produce the requisite value to be paid the minimum wage.

*I think coming automation is going to render the argument moot and that there won't be enough jobs available, period, so let's adjust to a UBI now rather than after we need it.

Jrr85

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Re: Thoughts on Minimum Wage?
« Reply #83 on: July 27, 2017, 03:53:19 PM »
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.


Okay :)

You also have a bunch of people who are on much much more than minimum wage argue that people who aren't productive enough to earn minimum wage shouldn't be allowed to legally work unless an employer treats them as a charity case.  Would that argument be less callous if the people making it earned just above the minimum wage? 

rdaneel0

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Re: Thoughts on Minimum Wage?
« Reply #84 on: July 27, 2017, 04:42:27 PM »
As a former minimum wage worker I think it should definitely exist and be significantly higher than it is. I don't understand why minimum wage isn't set at a state level though. In a HCOL area, living on anything under $15 an hour is incredibly difficult if not impossible (w/ dependents). In LCOL areas I think $10 is totally reasonable.

When I was an MMM-style minimum wager in a HCOL area I had to work 7 days a week, every week, and I was barely saving anything. I went months with no days off, went to work sick, worked every holiday, worked overtime 12+ hours a day at times. Thanks to MMM and having no dependents I didn't get into debt and I did save a small amount, but it took a tremendous amount of deprivation and grit to just live at the bare minimum. Every time my savings started to build an unexpected expense would wipe it out. We had no furniture and our diet was very limited (dried beans, dried grains, frozen vegetables) and we lived in a terrifying neighborhood with zero amenities. The library was practically bare and basically one shitty room.

I'm not trying to tell a sob story at all, we still had fun doing free stuff and we're doing very well now, but I cannot imagine how people with families exist on such a low wage for decades on end. Many homeless people in the USA are "working poor", in other words they have jobs but still can't afford a place to live. I don't have a grasp on advanced economics, but I don't think that's right.
I write about my weekly meal preps, saving money in the city while working, and my random thoughts/adventures: https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

sokoloff

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Re: Thoughts on Minimum Wage?
« Reply #85 on: July 27, 2017, 06:45:29 PM »
Now, imagine when you were working that job that you had a cousin in your similar situation, who was only 2/3rds as "good" as you were, but had the same high level of motivation, dedication, and work ethic that you displayed, but because his output was only 2/3rds as much as yours, that it was economically a losing proposition to hire him at minimum wage (because the company would pay him the minimum wage, but he wasn't able to produce that much value for them). Maybe you got paid $10/hr and created $12/hr of value, but he was only able to make $8/hr of value.

Would that cousin be better off if he was allowed to be hired at a lower wage, say $7, where it was economical to hire him?

Or would he be better off if he was (effectively) barred from working as a result of having lower productivity, despite having a strong work ethic and a dedicated sense of wanting to work?

bender

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Re: Thoughts on Minimum Wage?
« Reply #86 on: July 27, 2017, 09:25:11 PM »
As a former minimum wage worker I think it should definitely exist and be significantly higher than it is. I don't understand why minimum wage isn't set at a state level though. In a HCOL area, living on anything under $15 an hour is incredibly difficult if not impossible (w/ dependents). In LCOL areas I think $10 is totally reasonable.

When I was an MMM-style minimum wager in a HCOL area I had to work 7 days a week, every week, and I was barely saving anything. I went months with no days off, went to work sick, worked every holiday, worked overtime 12+ hours a day at times. Thanks to MMM and having no dependents I didn't get into debt and I did save a small amount, but it took a tremendous amount of deprivation and grit to just live at the bare minimum. Every time my savings started to build an unexpected expense would wipe it out. We had no furniture and our diet was very limited (dried beans, dried grains, frozen vegetables) and we lived in a terrifying neighborhood with zero amenities. The library was practically bare and basically one shitty room.

I'm not trying to tell a sob story at all, we still had fun doing free stuff and we're doing very well now, but I cannot imagine how people with families exist on such a low wage for decades on end. Many homeless people in the USA are "working poor", in other words they have jobs but still can't afford a place to live. I don't have a grasp on advanced economics, but I don't think that's right.

How did you get out of that situation?  It would be great to share that, since many are stuck at minimum wage for extended periods.  Did you get government assistance while on minimum wage or did the government help you out of that situation somehow?


zolotiyeruki

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Re: Thoughts on Minimum Wage?
« Reply #87 on: July 28, 2017, 06:53:04 AM »
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.
Fair enough, although I don't feel like it changes the outcome of the discussion much.  The value an employee adds is the ceiling for how much an employer should be required to pay them--otherwise, as Jrr85 put it, the company is literally losing money by employing that person, and it's a charity case.

How did you get out of that situation?  It would be great to share that, since many are stuck at minimum wage for extended periods.  Did you get government assistance while on minimum wage or did the government help you out of that situation somehow?
I'm interested in hearing how the story ends as well :)

rdaneel0

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Re: Thoughts on Minimum Wage?
« Reply #88 on: July 29, 2017, 08:01:12 PM »
Hey! I don't want to derail the thread so I posted a simplified version of the story here:

https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

It was definitely a mix of hard work and good fortune. We never got government assistance during our minimum wage years. We always felt like we could support ourselves and that we were pretty lucky all things considered, but I don't begrudge anyone who takes advantage of it.
I write about my weekly meal preps, saving money in the city while working, and my random thoughts/adventures: https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

koshtra

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Re: Thoughts on Minimum Wage?
« Reply #89 on: July 29, 2017, 09:55:12 PM »
I usually support minimum wage increases, not because I like them -- I really don't, they introduce distortion and drag into the market, as many of y'all have pointed out -- but because they've been politically possible. What I'd really prefer is UBI, or something like Milton Friedman's negative tax: the cheapest and easiest way to redistribute money is to just redistribute it.

Twenty years ago, I didn't even bother to talk about UBI or negative taxes: everyone dismissed them out of hand. I'm heartened to see so many people willing to talk about them now. I think it's a far better solution -- more flexible, less paternalistic & less bureaucratic than minimum wage.

In the meantime, I'll go on supporting minimum wage increases... to me, inefficient redistribution is better than none.

bender

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Re: Thoughts on Minimum Wage?
« Reply #90 on: July 30, 2017, 09:45:20 AM »
Hey! I don't want to derail the thread so I posted a simplified version of the story here:

https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

It was definitely a mix of hard work and good fortune. We never got government assistance during our minimum wage years. We always felt like we could support ourselves and that we were pretty lucky all things considered, but I don't begrudge anyone who takes advantage of it.

Thanks for the details in your journal.  From my viewpoint luck had nothing do do with your success.  In fact you had some bad luck (recession) and couldn't get a job in your field.  You were smart and did what it took to get yourself out of the minimum wage situation.  I'd say it was your upbringing (I'm speculating), education and self-motivation that helped you rise up.  This is something the much of the lower class lacks. 

As a former minimum wage worker I think it should definitely exist and be significantly higher than it is.

It seems like it was hard to live on, but you got by, even without government assistance.  People earning minimum wage are eligible for several programs to supplement their income (EITC, SNAP, Obamacare/Medicaid, etc).  Since you didn't take advantage, it's reasonable to assume these workers have it significantly better than you did.  Throwing more money at them may not be the answer since it can be economically damaging and may reduce motivation as well.  I'm interested in why you think a higher minimum wage will help, vs expanded government assistance in the form of the programs above and others - possibly helping with education.


rdaneel0

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Re: Thoughts on Minimum Wage?
« Reply #91 on: July 30, 2017, 01:18:29 PM »
I guess I'd say luck had a lot to do with it because of my educational background and family background (lots of discipline instilled at an early age), which as you pointed out a lot of people on minimum wage don't have.

I think increased minimum wage would help the people who have the ability, discipline, and intelligence to climb out of the lower class, but who can't now simply because they don't make enough to live on. An important thing to point out is that I had no kids, so that's a huge advantage I had. With kids on minimum wage, I really don't think I would have had much of a chance. I would have gone into credit card debt to bridge the gap so fast.

I also think other services should be improved. I think programs that supplement income (SNAP, etc.) should be distributed on a weekly basis rather than a monthly basis. It's stupid to expect low income people to budget more carefully and skillfully than upper middle class professionals.  I think coupling that with free government provided childcare would go a long way for many people. In a perfect world I'd add in mandatory personal finance classes in high school too, but I'm sure that wouldn't do much good in crappy schools anyway.

There will always be those who can't pull themselves up, but if minimum wage workers went from the situation they're in now to having weekly government assistance for food, a livable wage, and childcare, I think that would make a huge difference for many. Again, I'm not an expert this is all just my feeling based on personal experiences.
« Last Edit: July 30, 2017, 01:21:16 PM by rdaneel0 »
I write about my weekly meal preps, saving money in the city while working, and my random thoughts/adventures: https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

bender

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Re: Thoughts on Minimum Wage?
« Reply #92 on: July 30, 2017, 01:39:15 PM »
Agreed with all your points.  It's quite sad that many people don't have the ability or discipline to budget a monthly stipend.  I guess there will always be those that will blow their paycheck on scratch tickets, booze and cigarettes.  Then they scrape by on crumbs until the next paycheck and repeat the cycle.  I want to scream when I see this!

obstinate

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Re: Thoughts on Minimum Wage?
« Reply #93 on: July 30, 2017, 03:04:46 PM »
I think you have some confirmation bias in your view of employment in Australia: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds
The overall workforce participation rate is higher in Australia than the US, and this applies for youth, too. We also have a higher median household income than the US - note I said "median", not "average". Going by the household is important, since an 18yo with no job is better off in a household where the parents earn $100k than one where they earn $30k, they have a better day-to-day life and ultimately better prospects long-term.

Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.
I saw this today: https://twitter.com/ernietedeschi/status/891761312224694273. It may be that the common wisdom about youth unemployment is not actually wisdom.

fattest_foot

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Re: Thoughts on Minimum Wage?
« Reply #94 on: July 31, 2017, 12:06:20 PM »
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

Eh? So you're basically arguing that labor wages should theoretically rise enough to eat almost all of retained earnings? As long as the company has a number > $0, they're good?

Labor isn't the only expense for a business. Just because they earn a profit doesn't mean they're underpaying their labor.

omachi

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Re: Thoughts on Minimum Wage?
« Reply #95 on: July 31, 2017, 03:19:04 PM »
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

Eh? So you're basically arguing that labor wages should theoretically rise enough to eat almost all of retained earnings? As long as the company has a number > $0, they're good?
I'm not arguing that, mostly out of selfishness since I'm both an employee and investor and there are plenty of reasons that I want to see companies turning profits. The largest being that I can diversify my income among many companies by owning lots of them, rather than having my income tied only to what would be the profits of the company I work for. This is good for everybody investing. Of course, I'm also not part of the 80% of the households in this country that only hold a combined 15% of its wealth, so I could be accused of being biased in thinking corporate profits are great.

If I wanted to look at it strictly from a laborer's standpoint, particularly a minimum wage laborer, it's an easy argument. For laborers that are not also investors, I'm having trouble seeing why the laborer wouldn't want wages to consume the entire profit. They could disagree on how much of the gross revenue should be reinvested into the business, which would then compete with wages rather than profits, sure, but profits don't seem to help them.

In fact, I could probably make that argument from a stronger vantage than minimum wage laborer. Companies turning profits don't appear to appreciably benefit the majority of US households. Median US net worth excluding home equity (so max worth that could be invested) is about $30k. All investable wealth returning 10% represents less income than a $1.45/hr raise for one full time worker in half of US households. Since that's of little help, it seems to me that the majority of this country should be demanding more income at the expense of the ~$1.5T in corporate profits per quarter. I'd bet most of them would be much better off if all of those profits were distributed as wages instead.

Labor isn't the only expense for a business.
I don't really see your point in stating this. Labor isn't the only expense, of course, which is why I mentioned profit and not gross revenue. Since profit is by definition exclusive of expenses, nothing considered profit is being spent towards labor or non-labor expenses for a business.

Just because they earn a profit doesn't mean they're underpaying their labor.
If you define the value of labor by what you can get away paying labor, well, you tautologically cannot underpay labor, can you? If you define the value of labor as the economic value the employee adds to a company, you can't overpay labor without taking a loss. In fact, because of the other expenses you mention, you are forced to underpay the full economic value the employee adds in order to keep a company afloat. This is accepted for myriad reasons, including job stability at a company and not having to handle overhead on your own. So I don't get your statement here, either. You either cannot or must underpay the value of labor, depending on definition, and profit has nothing to do with it.

If you read the rest of my post you excerpted from, you'll see I think we can set a minimum wage in a manner to minimize the cost to the social safety net, regardless of company profits. That may mean raising the minimum wage and putting a small number of people out of a job so a large number of people are less dependent on it. It may mean lowering the minimum wage so a large number of people are newly employable at a small cost to the safety net and a small number are more dependent on the safety net. I don't know where that balance is, though I'd guess the former. Regardless, I'm willing to bet it's far below companies no longer make profits and far above no minimum wage.

Reynold

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Re: Thoughts on Minimum Wage?
« Reply #96 on: August 01, 2017, 11:04:13 AM »
I saw an article in the WSJ a year or two ago that discussed a study on the effects, where they compared neighboring states with similar economies where one raised the minimum wage and the other didn't.  Effects were largely as predicted; the state which raised the wage had more unemployed, but the smaller number of people who had jobs made more money compared to the state which keep the wage the same.  Whether more people having lower paying jobs or fewer people having higher paying jobs is the more desirable situation starts verging on an ethical discussion rather than an economic one, but there didn't seem to be a way around that tradeoff. 

The other effect which made it non zero-sum, though, was that the state which raised its minimum wage had slower economic growth.  Thus, over time, it will have less businesses, lower wages, less tax revenue to distribute, and so on.  That may be a high price to pay to have a subset of workers make a more "living wage". 

omachi

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Re: Thoughts on Minimum Wage?
« Reply #97 on: August 01, 2017, 12:09:23 PM »
I saw an article in the WSJ a year or two ago that discussed a study on the effects, where they compared neighboring states with similar economies where one raised the minimum wage and the other didn't.  Effects were largely as predicted; the state which raised the wage had more unemployed, but the smaller number of people who had jobs made more money compared to the state which keep the wage the same.  Whether more people having lower paying jobs or fewer people having higher paying jobs is the more desirable situation starts verging on an ethical discussion rather than an economic one, but there didn't seem to be a way around that tradeoff. 

The other effect which made it non zero-sum, though, was that the state which raised its minimum wage had slower economic growth.  Thus, over time, it will have less businesses, lower wages, less tax revenue to distribute, and so on.  That may be a high price to pay to have a subset of workers make a more "living wage".

Eh, there are lots of things in play besides minimum wage and there are at least counter-examples regarding rising wages and all sorts of conventional wisdom about what drives growth. If you compare MN and WI, two neighbors with similar populations, it doesn't really hold that well. MN's minimum wage is higher and raised recently, restaurant workers have no tip credit in MN, and MN taxes are higher. Yet MN both was hit less harshly in 2008 and recovered faster than WI. MN's GDP is bigger, too, despite having fewer total jobs. Poverty level in MN is lower than WI as well.

http://blogs.mprnews.org/newscut/2015/01/minnesota-economy-beats-wisconsin-7-charts-1-table/
http://cepr.net/blogs/cepr-blog/wisconsin-vs-minnesota-what-the-data-show

Since the states are so similar, if minimum wages were really that big a differentiator you'd expect a different picture. If taxes were a diffentiator you'd expect a different picture. Conclusion from the top article is that slight differences in key industries contribute some, as does MN's higher quality of life and better educated workforce.

obstinate

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Re: Thoughts on Minimum Wage?
« Reply #98 on: August 01, 2017, 09:57:43 PM »
Since the states are so similar, if minimum wages were really that big a differentiator you'd expect a different picture. If taxes were a diffentiator you'd expect a different picture. Conclusion from the top article is that slight differences in key industries contribute some, as does MN's higher quality of life and better educated workforce.
I dunno if I'd say "you'd expect." As you rightly point out, there are far too many variables to make any certain conclusions. However, for the minimum wage and tax skeptics, it would be nice to see at least some positive evidence that reducing taxes or having a low minimum wage spurs growth. There simply isn't any empirical evidence at all for this viewpoint.

WhiteTrashCash

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Re: Thoughts on Minimum Wage?
« Reply #99 on: August 02, 2017, 09:57:29 AM »
Why does everyone think that automation is somehow not going to happen if we keep the minimum wage where it is? Are we really that naive? Robots are really cheap compared to paying employees anything. They are basically legal slave labor. Plus, businesses don't deal with shrinkage from employee theft and employee error. The robots are coming no matter what we make the minimum wage.

In the meanwhile, as I've said before and as other people are saying on this thread, we are really sick and tired of having to basically pay half the wages for these corporations' workers through our taxes, because our politicians are owned by the corporations and refuse to force them to pay living wages.