Should minimum wage be: Higher? Lower? None?

[Mike80911]

I have eight employees at my café. I start everyone at minimum wage which in NY is $8.75. Once they have been with me a while and prove their value I raise their salary. My highest paid employee is currently making $12 per hour plus tips. If the minimum wage is increased to $15 per hour I will be faced with two choices lay off half my staff and only use 1 person per shift or close the doors completely. How does this help get people off of government assistance? Either 4 people will become unemployed or all 8 will. This is a small business that I keep basically because my wife enjoys it. There is really not much money in it so I have no problem closing the doors as I have other incomes that pay my bills.
Why not cut out some the taxes I pay on each of my employees and require the business owner to pass this money on to the employees.? I would gladly do that and if the powers that be are truly concerned with helping those workers they should be glad to do it.

[wdfifteen]

Originally Posted by fintstone

If working smarter and harder did not pay better...no one would.

Sad that you have such a low opinion of humanity.

[rusnak]

Originally Posted by Tobra

Well then, we will just have to agree to disagree. Making the assumption that they are stupid, made poor choices or are kids is not what I am doing.

If it is a minimum wage job, it is a job an employer is not willing to pay much to have done. If it goes from $9 to $15, does that mean that all the people who had formerly made $15 get $21 now? If not, why not?

Does the employer eat this added expense? No they do not. They do the job with fewer employees, they raise prices or most likely both. If they can't do that, they close their doors. It does not necessarily mean a business model is not viable if it can't survive when labor costs are artificially increased 65%. It more likely indicates that they were operating on a margin narrow enough that they can't absorb the additional expenses.

Unless every book on economics I have perused is wrong, raising minimum wage will almost certainly result in fewer entry level jobs.

For example, if wages go from $9 to $15, and your payroll for two weeks is $9000, you get 1000 hours of work from the lower pay rate, 600 hours of work at the higher one. You are going to either have to cut hours for each employee, eliminate employees or raise your prices to cover the difference. Problem with the third option is people may already be paying as much as they will for your widgets.

This post pretty much sums it all up. You must maintain your margins. It is not elective, it is essential to staying in business. Raising minimum wage increases costs for everyone, and it will hurt the entry level worker the absolute most, followed by the rest of the payroll employees.

[fintstone]

Originally Posted by wdfifteen

Sad that you have such a low opinion of humanity.

Sad that you choose to ignore reality,

[Hugh R]

I go to a local car wash for the Camry once or twice a month. In CA the guys that dry the cars get minimum wage. It seems pretty much everyone tips them $2-$3 They seem to do about 5 cars/hour, or more, so they are pulling in around $20/hour combined, at least on the weekends, can't speak about M-F.

[island911]

[KevinTodd]

Originally Posted by Mike80911

I have eight employees at my café. I start everyone at minimum wage which in NY is $8.75. Once they have been with me a while and prove their value I raise their salary. My highest paid employee is currently making $12 per hour plus tips. If the minimum wage is increased to $15 per hour I will be faced with two choices lay off half my staff and only use 1 person per shift or close the doors completely. How does this help get people off of government assistance? Either 4 people will become unemployed or all 8 will. This is a small business that I keep basically because my wife enjoys it. There is really not much money in it so I have no problem closing the doors as I have other incomes that pay my bills.
Why not cut out some the taxes I pay on each of my employees and require the business owner to pass this money on to the employees.? I would gladly do that and if the powers that be are truly concerned with helping those workers they should be glad to do it.

Well said, Mike. I own a couple of restaurants and a retail store as well and although I employ very well paid salaried managers, executive chefs and sous chefs I still cringe when I see these staged "protests" in my area. Most of the folks demonstrating seem to equate their earned wages with the value of their lives, and the fact is that in reality one has nothing to do with the other.

When my businesses run lean, I am the one that doesn't get paid. My employees will always get their checks before I will no matter what.

$15 minimum for fast food workers would change that industry overnight--most of those employees would ultimately lose their jobs to automation and rightfully so--as the business owner has the right to earn his "comfortable" living as much as people who think they've somehow earned or deserve to be paid $15 an hour.

[rusnak]

McDonald's hires 7,000 touch-screen cashiers - CNET



"Welcome to McDonald's . My name is HAL 9000. May I take your order?"

McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn't look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.

The move is designed to boost efficiency and make ordering more convenient for customers. In an interview with the Financial Times, McDonald's Europe President Steve Easterbrook notes that the new system will also open up a goldmine of data. McDonald's could potentially track every Big Mac, McNugget, and large shake you order. A calorie account tally at the end of the year could be a real shocker.

The touch screens will only accept debit or credit cards, adding to the slow death knell of cash and coins. This all goes along with an overall revamp of McDonald's restaurants worldwide aimed at projecting a modern image as opposed to the old-fashioned golden arches with a slightly creepy (to my taste anyway) clown guy hanging around the french fries.

This puts McDonald's one step closer to opening up its first Alphaville location. At least our new computer overlords will be nice enough to serve us a Filet-o-Fish. Maybe they'll even throw in an iPad with the Happy Meal one of these days.

[Hugh R]

Why do BK and McD's offer soda machines with free refills? Because the drink machine costs a few pennies/hour and having someone behind the counter filling your drink order costs $'s/hour.

[Tidybuoy]

I used to work for minimum wage, that was a long time ago. As time went on, I increased my skill set and now I make much more than minimum wage. I thought that is how it's supposed to work.

Now, if you want to talk about maximum wage.....I would be perfectly ok with paying the top dog anything you damm want but the maximum tax deduction for individual labor would be capped - say $150k.

[Tobra]

Originally Posted by wdfifteen

Sad that you have such a low opinion of humanity.

How is a realistic assessment of human nature equate to a low opinion of them?

[dan88911]

The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out.

Even if the minimum wage kept up with inflation since it peaked in real value in the late 1960s, low-wage workers should be earning a minimum of $10.52 an hour, according to the study.

Between the end of World War II and the late 1960s, productivity and wages grew steadily. Since the minimum wage peaked in 1968, increases in productivity have outpaced the minimum wage growth.

The current minimum wage stands at $7.25 an hour. In 2011, more than 66 percent of Americans surveyed by the Public Religion Research Institute supported raising this figure to $10.

The last time the federal minimum wage increased was in 2009. Currently observed in 31 states, the federal minimum wage translates to an annual income of about $15,000 a year for someone working 40 hours per week.

[rusnak]

Markets for everything have become saturated, thus requiring greater productivity, or cash on cash return.

It's not like employers have gotten fatter and happier since WWII. They have gotten leaner and meaner, or they have gone out of business.

[island911]

Originally Posted by dan88911

The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out.....

Well there ya go... It's not the workers who are more productive; it's the machines.

Just look at elevator operators - their productivity has gone thru the roof.

[jyl]

It's not like employers have gotten fatter and happier since WWII. They have gotten leaner and meaner, or they have gone out of business.

How does that claim square with the remarkable growth in income inequality?



By the way, I personally have not decided if I support an increase in minimum wage, or how much/how fast. I'm still thinking about it. Hence this thread.

[rusnak]

Right, like your water thread. You have your opinion and are not interested in discussion.

Your chart shows the disparity between Wall Street and Main Street, if we are to take the label "Household Income" to mean exactly that, which includes doctors, lawyers, as well as teachers and auto mechanics. The disparity is not in the top 20%, it's in the top 1%. Who do you think that is?

[jyl]

The red line is the top 1%. That is roughly $400K+ annual income, judging from this tool
http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0 There is data somewhere that will give a more precise number, if needed.

The yellow line is the top 20%. That is roughly $100K and higher annual income. $100K isn't really a "Wall Street" income; only junior Wall Streeters are making that little.

The light blue line is in the top 60% but below the top 40%. That is roughly $40K to $60K annual income. That is basically the median household income in the US.

The dark blue line is the bottom 20%. That is roughly $20K annual income and below. That is the minimum wage group, among others.

[look 171]

Originally Posted by rusnak

First of all, I think we should clear some things up.

Many "illegals" are working here legally in agriculture, food service, hospitality, etc. Just because they are not American citizens does not automatically make them "illegal". They pay taxes, and employers take out witholding for SS, etc.

Many migrant workers also make far more than minimum wage. That is because they are paid by the piece, not by the hour. It is a fair system that compensates higher performance with higher pay, while paying less to the lazy unproductive worker. They are not stupid. They go where they will make the most amount of money.

If you work in ANY company that has minimum wage workers, then you will see less available to pay your raises, bonuses, etc when minimum wage is increased.

I have a crew of around 12 to 14 workers. Since we started over 4 years ago, I have paid over 14 raises. I have lost track of the number of bonuses. Probably 20 or so. Minimum wage was around $8 per hour. Everyone was making money, and our vendors were keeping their prices low enough to make everything make sense. This understanding that I will reward good employees with higher pay is an essential part of my business. The relationship with my best employees is what makes the company go.

Then last year the minimum wage went to $9. Everyone had to raise their prices. When the minimum goes up, your LEAST PRODUCTIVE EMPLOYEE, the one with zero experience, lazy, spends all day sitting around or on his cell phone, gets an automatic raise. This also raises payroll tax, insurance, and workman's comp.

Since last year, when the minimum wage went up, I have paid zero raises, and zero bonuses. Why? Because of the cascading effect of the mandatory minimum wage. If you notice, a #1 Value Meal at your favorite fast food joint is approaching $10 now.

So this fallacy that raising the mininum wage will give the entry level worker more money, or make him "feel like he has more money" is just flat out ridiculous. It's the type of idea that pops into the head of someone who has zero experience and just wants feel-good, no-think laws.

If you eliminate minimum wage, then the first thing that will happen is that inflation will drop. Then the lazy worker will realize that he's got to treat a job like a job, not as a right. And the best of the employee labor pool will be rewarded with the highest pay. If you eliminate government regulation in the labor market, the best will rise, and the worst will fall. Everyone is kept at a false equal as minimum wage increases. And we all pay for that.

No I am not talking about none US citizens. I meant illegals, those without a greencard, SSC card or number. If a business decides to hire people from that group, then they are breaking the law and I am sure the IRS will love to have that income tax from that group.

[Rick Lee]

Originally Posted by look 171

If a business decides to hire people from that group, then they are breaking the law and I am sure the IRS will love to have that income tax from that group.

I'm not so sure about that. The feds want nothing to do with enforcing immigration law north of about five miles of the border and the IRS won't bother either.

I was at Newark Int'l. Airport a few days ago and every single place in the food court had iPads for ordering. There were no humans involved in the process. I had an interview a few yrs. ago with a company that builds the kiosks for those devices. They are booming. As min. wage increases, fast food will become far more automated.

[rusnak]

Originally Posted by jyl

The red line is the top 1%. That is roughly $400K+ annual income, judging from this tool
http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0 There is data somewhere that will give a more precise number, if needed.

The yellow line is the top 20%. That is roughly $100K and higher annual income. $100K isn't really a "Wall Street" income; only junior Wall Streeters are making that little.

The light blue line is in the top 60% but below the top 40%. That is roughly $40K to $60K annual income. That is basically the median household income in the US.

The dark blue line is the bottom 20%. That is roughly $20K annual income and below. That is the minimum wage group, among others.

If you really wanted to analyze your own question, and were not in a rush to "make a point", then you'd see that the disparity is between the 1% and everyone else. That is NOT illustrative of anything to do with this thread. You have introduced a collateral issue, that of Wall Street compensation, as if it has anything to do with minimum wage, which it does not.

The real issue is the corellation between minimum wage increases and the effect of same on the overall economy.