1 word: lawyers.

The first and last time I was paid minimum wage was when I was 13 years old and worked in a Laundry-Dry Cleaning store taking in dirty clothes over the counter. I knew nothing about retail, learned to make change properly (this was long before credit cards and ATM's), and so forth. I didn't deserve the minimum wage either, but they had to pay it.

I've never been paid minimum wage since, and don't know anyone of working age (16+) that has either. The whole sob story of folks trying to raise families on minimum wage are utter garbage.

We just lost nearly 40 university educated, very high 5 figure salary professionals from our office. Very scary indeed. But I've heard from a lot of them that they've already found new jobs(albeit with a slightly lower salary) . Two younger guys w/out family responsibilities are working at Home Depot because they have that option. But none of them could make it on minimum wage. Further none would choose to do so.

Sorry to say but if you have a family you'd better get your azz in gear 'cause MW isn't gonna git it.

Just because minimum wage is raised doesn't automatically mean everything is going to skyrocket in price, ie runaway inflation. Sellers can ONLY charge what the market will bear, if they want to stay in business. So if they have to pay everyone more, and increase consumer prices to help offset that, they can only increase prices so much. Someone mentioned movie tickets. Well, they can only go up so much, and if they do go up, if you still pay it, well then what's the problem; you got at least what you paid for. The marginal benefit was obvioulsy worth the marginal cost. Also, they could try new (or modified) methods of Price Discrimination to offset costs. If increasing consumer costs doesn't completely make up for the increase in wages, then the business also has to learn to be more efficent, which isn't bad. Efficency is key is business.

Wage raises aren't all bad, either, since studies show that those in lower income brackets have a Marginal Propensity to Consume of about .8; that is, they spend 80% of whatever increase in wages they receive. More taxes money, more sales, etc. If the MPC is .8 then the Marginal Propensity to Save is .2, so they are saving 20% of their increase in wages. This increases the available supply of loanable money to lending institutions, and increases the lending institutions ability as an aggragate to create money.

And, let's say some inflation did set in. That's bad for lenders, not borrowers, which most of us in this discussion are. The money you are paying back is worth LESS than the money you borrowed, so you're getting whatever it is you took the note on cheaper. Besides which, wages generally adjust with inflation; not necessarily in lockstep, but usually close.

There are good arguments both for and against Minimum Wage. And if you're against it solely on the grounds of "The man regulating the free-market," there are a LOT of other issues to be discussed on that front.

That's true, and of course, that's not the worst problem with minimum wage by any means. It's biggest problem is that it hurts those that it's supposed to help, because it causes some of them to lose their jobs.

Ding ding ding!! Now then...take the next step and say "And if they can't charge enough to pay the worker they have to fire the worker."

See how easy that was?

Unless, as Wayne says, the push is "merely symbolic" and won't accomplish much, in which case this whole discussion is akin to pissing in the wind.

Does anyone have any data that shows how consumer prices change as minimum wage changes?

Are consumer end costs going to rise so much that people stop buying the goods/services and have to layoff workers?

Also, I think I made a point of saying that about 80-90% of the increase in wages is spent, at various venues, and might even balance things out, as a whole. And that about 10-20% of it will be saved, increasing the amount of money available to lending institutions with which to increase the money supply.

Since I'm obvioulsy a dolt, what's the "ding ding ding next step" program for that?

And, how about a decently reasoned reply, instead of some emotional outburst such as "well I worked so hard.." and this and that. Or how no one ever gave you anything, ever, so no one else should get anything, either.

Have a good day:)

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I guess what I'm trying to say is that I just don't believe that an increase in the Minimum Wage, which happens every few years I'd guess, is going to bring about mass jobless-ness and runaway inflation. Especially since most states have their minimum wages set above Federal level.

edit2()

Hmm...50% is a pretty large increase...I figured we were talking like 50 cents or something, like usual. That almost a $2.60 raise...hmmm.

In 1998-2000, there was a labor shortage around here in minimum-wage-type jobs. Unemployment had dipped below 1% in the county, and there was no one to be had stuffing gorditas at Taco Bell.

Funny thing happened. Signs for $8 an hour appeared on all of the fast-food restaurants, and they were offering BONUSES for each month people stayed on. Prices did rise modestly and staffs were smaller than they had previously been.

Within the next two years, there was an influx of recent Mexican immigrants to the area. (I have no idea their collective legal statuses.) Wages came down, sizes of staffs increased, prices came back down.

Not necessarily. That's one possible outcome among many. If you consider that a business owner wants to do as much business as possible (sell the most widgets, do the most oil changes in an 10 hour day) he will hire the workers necessary to do that. If the labor cost goes up X%, there's no reason to assume the owner will fire people. If he has fewer employees, he can do less work and earn less revenue. Instead, he'll pay the workers more and either take a hit in profits (or CEO compensation), or try to pass increased costs to his customers.

And before anyone ding-ding-dings me, we should remember that there are industries that are HIGHLY competitive even in a market with increasing costs -- airlines are a great example.

Yeah, you are seeing things. You're seeing what you WANT to see. Truth is, $2 in 1973, adjusted for inflation, became $8.83 in 2005.

I tried to PM you. Your box is full.

They don't make enough money to save. So yeah, this is EXACTLY the right group to give money to. They will immediately spend it, which will stimulate the economy. By contrast, and contrary to what you have been led to believe, tax breaks for the wealthy are spent on........Wall Street.

Quite frankly, this would be a good idea. Sure, I like freedom as much as anyone else. I also like aspects of capitalism, including and especially its self-leveling of supply and demand. Opportunity. And....I don't support gubmit regulation where it is not appropriate. But.....

Once again, it is widely believed that with every worker who earns less than around $15 per hour, your tax money is making up the difference. Either with health care, or transportation (your taxes pay for public transportation), food stamps, housing assistance, etc. That wage (about $15 per hour) is where a person can reasonably expect to "pay their way." Nearly every job that pays less than this.....is a drain on your tax money.

Supe..

But will the average reader "get it"?

Wealthy people do spend more money, but not all they save. It goes into the market and not into the mainstream economy.

It is almost like the "privatization" of Social Security. How can a person spending every penny on housing, food, clothing and other necessities be expected to invest? Those of us with excess income (descretionary funding), it is difficult to understand that quandry.

It'll shift the burden away from gubmit social programs. Either you guys are serious about that goal, or you are not.

On a related note, we are moving toward the day when products' selling prices include the full cost of creating and selling the product. It was sweet when manufacturers could walk away from the land it had polluted. But then the gubmit had to come in and clean it up. All those $1.29 widgets should have cost $1.59.

Same here. The employers paying workers $5 per hour are gubmit-subsidized businesses. Drive down fast-food-row and view those businesses as being seriously subsidized. Free market? Let's try it! Only let's let "market" pay it rather than shift costs to gubmit.

One more thing. Bryan and Len are using the "sky is falling" argument, as are a number of Republican members of Congress. As we all know, the Republican Party is the Party of Industry. And the Democratic Party is the Peoples' Party. Unless you have been fooled by the propaganda.

No, a modest hike in the federal minimum wage is not going to cause the sky to fall. It will not cause the Earth's orbit to decay, dooming us to a fiery death. It will not destroy the economy. It will save taxpayer dollars, and it will stimulate the economy. But unfortuately, if the R's don't play the chicken-little card, then they will blow another opportunity to ask for tax breaks for business.

For your consideration, here is an excerpt from an article today. It discusses Washington State's minumum wage, which is probably still the highest in the nation and may always be, since it is now indexed to inflation:

"Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more."

I have friend who own manufacturing businesses that start people at MW for the piece work have clearly said that it cost them money and they have also stated they will most likely let some people go, I also have clients in the food business, and the last increase cost one of them an extra $60K a year just in the payroll taxes, something you keep forgetting about the fact the the owner is having to pay tax on the extra $$$ the state & gubbmit are forcing them to pay instead of letting the workers earn it. What ever happened to people wanting to earn a living, & prove them selves, and work their way up??

I wonder what the typical receipts are for a typical McDonald's restaurant. I'd bet it's a breathtaking figure. I wonder what would be the result if we divided that McDonalds' labor costs by its business volume. That is, I wonder what percent of its gross income goes to pay for labor.

And the backdrop is this: Since I am fairly squarely in this debate in terms of my profession, I could probably retire if I had a dollar for every time somebody thought prices would double if wages go up ten percent. Think about that. How could that possibly ever be true? If wages were ten times gross business volume then sure. But of course, business volume cannot be less than wage costs. Certainly. In my industry, conservative think tanks have reported that public works cost would fall by 50% or more if "prevailing wage" law were repealed. That would be an amazing feat since, if the same skilled workers could be persuaded to work for free, the savings would be no more than 30%.

Nevertheless, you're hearing it again now. The sky will fall!!!!!!

My God, Yes!! Consider the plight of the executives of many corporations....Shouldn't they get increases at least percentage wise to match increases in the minimum wage?

(Shouldn't the minimum wage be tied somehow to the rate of inflation., at least?..Just a thought.....)

It is an interesting situation when those in Congress and those in management making high6 and some with 7 figure salaries think that a buck or two an hour paid to their employees at the lowest ranks will somehow ruin the economy.

We are not all gifted with the same talents. Some citizens do not have the ammunition to aspire to high position. This does not take away from their value to society. If they are doing the best they are capable of, this is something we should respect. It is management's job to find other ways to streamline their costs, such as internal economies. Isn't that one of the reasons they are so well compensated?

Many times increases in the cost for products has nothing to do with increased labor costs. Some increases are simply the knowledge that the traffic will still bear paying a little more. Cable TV is an excellent example, with a practicaly "captive" audience.

life as an anecdote...gotta love it. ;)

Riiiiight, Byron. Similar to your earlier prediction that cost increases will double? Really? I think you can exaggerate better than that. Tell them it will triple. Tell them that burgers will cost $20.

Hold the phone there professor, "Len" hasn't posted in this thread yet.


:D

We're talking about the economy as a whole here, not our personal friends business. All the friends you know and all the friends I know and even PP itself could go under and the economy could still be on the rise. We're looking at the forest here, not the trees.

And, don't jump to conclusions about what I am "forgetting," such as payroll taxes. I hear constantly how much more money "Dad" would take in if it weren't for this that and the other thing.

Who said anywhere that people shouldn't have to "prove themselves and work their way up"? I didn't read anyone saying this, except for you asking the question.

Refer to Supe's post so that I don't have to drone on about labor costs and business volume.

A small increase in non-skilled labor wages isn't going to kill the economy.

Refer to Supe's comment about anyone earning <$15/hr being a drain on your tax dollars.

Quote:

Isn't that one of the reasons they are so well compensated?

Possibly, but here's a bigger reason: The Old Boy Network with the Board of Directors who approves the executives pay. I have a few articles at home somewhere that document this; that Executives pay has more to do with social/business connections than with company performance.

If I had to give all my guys a $2.50 raise, I guaraneffintee you that I would let atleast one guy go.

How many business owners that employ low level people have an extra $5,000 a month extra profit lyin' around for every 10 employees they have?

If all your employees are @ M-W, you have other issues...

None of mine are, but the principle is the same for businesses that do.

So, Ronnie, Bobby, Ricky and Mike can afford an extra round for the group at the bar each week, but Ralph is S.O.L.

The MW increase is being implemented over the course of 2 years. Should lessen the impact, no? The end result is the same, in terms of the wage, but gives the employer ample time to drum up new business or increase productivity and or efficiency.

Hell, the raise might even encourage your guys to work harder, produce more in less time, and save you money, or make you more.

And I have news for you, if the lowest paid guys on the shop floor get a $2.50/hr raise, the line will be deep at the bosses door from the others.

Hells yea, it worked for GM, thems is some motivated muthas I tells ya:rolleyes:

Welcome to the real world.

How's this for news:

If getting a raise doesn't make your guys work harder, then you shouldn't have hired them in the first place.

Quote:

And I have news for you, if the lowest paid guys on the shop floor get a $2.50/hr raise, the line will be deep at the bosses door from the others.

So you tell them no, they either stay or quit, and the ones that quit can be easily replaced. Hmmm.....

In an effort to be polite I will just say that I don't think you have any or much experience in business.

Anyway, you don't give raises to make people work harder, you give people raises for their hard work(as a method of retention).

I was going to make a smart ass reply with something along the lines of the economic experience of those who claim the world is going to end due to this MW increase, but since you've been polite, I will be also.

Since I seem to have no understanding of business, with my idea that increases in wages generally make motivated people work harder, could you set me straight on why this is incorrect?

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I didn't see your second line originally, my apologies.

[b] And I wouldn't necessarily argue with that, but since you have no choice as to whether or not this "raise" (wage increase) is given, I was being optimistic and suggesting maybe your workers would be motivated to work even harder because of the extra money. It seems that someone working for low wages would work harder when they receive more money for it. I realize that we're talking about the forest, not the trees, but out of my own experience, I work harder when my pay is higher.

And, giving raises to increase worker productivity is exactly what Henry Ford did. He paid well above market wages so that his workers would produce more, thus requiring less workers to do the same work. Worked pretty damn well. Just one example, but I think it somewhat illustrates I'm not completely off my rocker.

Experience and an understanding of human nature. I have never, ever, once seen one of my guys work harder after a raise (and again you get the raise for what you've done already, as a bribe to keep you from looking elsewhere for employment).

People are people and their internal work ethic guides them.

Why is it that the hardest working people I've ever seen are also the lowest paid? How much harder will the migrant apple picker work for $2.50 more an hour? Answer.........none.

(pointless)

I agree, as an employer I have seen hundreds of raises for my guys and not once did I ever see (or expect)an increase in performance. As your experience grows you will come to realize this. It's all about human nature...the hungry(no I don't mean food) are always the hardest workers.

:D

Len, you (and all other small businesses) don't matter in this argument. The guys arguing for minimum wage increases are all under the impression that BIG business is making huge profits off of the multitudes of the underpaid heads of households just trying to humbly raise their families of four on minimum wage.

They are not talking about the true multitudes of unskilled highschool kids or dropouts that are really cutting their teeth on minimum wage flipping burgers or mowing lawns.

All I know is that if it ever hits $30/hr, I am going to quit my stressful job and start flipping burgers (at least for a few years until inflation catches up). Maybe by then the feds will require the burger joints and small businesses to gaurantee huge retirement plans also. Hey maybe being a liberal isn't so bad!

OK, I am done wasting my breath.

Great, lets reward people for being losers. Anyon can try harder!!!

Len, are your workers' raises COLA-type raises, or are they part of promotions where the worker's responsibility grows? COLA-type raises will unlikely result in more work output.

The min wage thing is a COLA that hasn't been seen for 10 years (except in some states). Funny thing, gov't has had their annual COLAs. LOL!

So your point is that minimum wage increases are to keep up with inflation?

I thought your point was the the poor people in America need the increase to get by. Any response to the fact that the poverty level in America has not changed despite 12 minimum wage increases?

If your goal is to reduce poverty by raising the wages of those making minimum wage, wouldn't you expect that to have occurred with past raises?