Should minimum wage be: Higher? Lower? None?

[jyl]

I'm not sure why you label the top, red line as being "Wall Street". Most people with incomes in the top 1% are not on Wall Street. Many are professional of other sorts. Many are business owners. The typical McDonald's franchise owner makes $500K to $1MM income per restaurant (according to MCD).

And I assume you can see the difference between the second, yellow line and the lower two lines. As I've told you, the yellow line doesn't represent "Wall Street" at all. The only people on Wall Street making $100K are the most junior ones.

So, let's go back to the point that the chart makes. Which is not this Wall Street vs Main Street thing you came up with. The point is that employers generally, who are mostly represented by the two upper lines, are achieving income gains much larger than the bulk of employees, who are mostly represented by the two lower lines.

Yes, I realize there are very small employers (very small businesses) whose income is in the lower two lines. My father in law was one. He had a small janitor service. If he'd had to increase his (three) employees' wages by 50%, he would have had to do with fewer employees, work longer hours himself, and make less money. Because the local Safeway wouldnt have paid more to have their stores cleaned. But if Safeway had been required to raise their employees' salaries, the executives of Safeway wouldn't have suffered. The share price probably would have.

In Seattle, I think the minimum wage increase that will take place over the next 5 years is on some sort of sliding scale, by company size. I suppose that is an attempt to address this particular issue.

[rusnak]

The top 1% of all income earners are not Wall Street deal makers but rather McDonald's franchisees eh? You're nuttier than I thought. And as I said, you pretend to have not made up your mind when you start these passive/ aggressive type threads.

[Chuck Moreland]

The free market is so very efficient at establishing wages. Why do we need politicians to do it for us.

Getting paid what you are worth is an incredible incentive to work harder, add skills, and be more productive. Being able to attract and retain quality workers is an incredible incentive to pay fair wages.

With competing employers and employees, everyone gets paid the fair market value of their work.

Everyone benefits when the free market is allowed to function.

[look 171]

Originally Posted by Rick Lee

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.

Yeah, enforcing is the key word.

[fintstone]

$400k family income does not seem that hard to do for two working professionals in their peak earning years in a high cost of living area....if they have done side investments generating income such as real estate or the stock market.

[ckelly78z]

I was at a Wendy's the other day and had to wait for 20 minutes in line inside the store because of absolute ineptitude, it's like a rush of lunch customers was a complete surprise to them. That was bad enough, but thier new soda/drink machine had everyone scratching thier heads. It was completely automatic and you had to navigate through sevceral screens to get any drink you wanted. (I couldn't just point to the button I wanted and push it to get my soda). If this is the future of fast food, i'll send my wife in to order. The people behind the counter didn't deserve the minimum wage they were getting, let alone a raise to $15 an hour.

[Tervuren]

It should vary with local, and definitely not be federal.

What a person can live on, varies by region.

Minimum wage simply means if a job isn't worth enough to live off of, it will get eliminated ASAP. Higher minimum wages eliminate jobs that cease to make economic sense.

[jyl]

Originally Posted by fintstone

$400k family income does not seem that hard to do for two working professionals in their peak earning years in a high cost of living area....if they have done side investments generating income such as real estate or the stock market.

E.g. a pair of successful doctors or lawyers, or one who is very successful, in a coastal city.

[jyl]

We are seeing a higher minimum wage experiment play out now in our neighbor to the north, Washington State.

This is a summary of the Seattle "$15 by 2021" law, which went into effect this month.

http://www.jacksonlewis.com/media/pnc/8/media.2708.pdf

It phases in the increase - from $9.25 to $11 now, rising to $15 by 2021, which is about +5%/yr from 2015 to 2021, call it about 3% above inflation. It gives a small break (<$1) to companies with <500 employees. I'm not sure why 500 was chosen as the demarcation, and franchisees are mighty unhappy about it.

Too early to say what the effect is going to be, I think. Some media reported there was a flood of Seattle restaurants closing due to the coming wage increase, but that appears false: the restaurants themselves have stated otherwise. Conservatives Say $15 Minimum Wage Is Killing Seattle Restaurant Scene, Restaurateurs Disagree | ThinkProgress

One well-known local Seattle restaurant chain is increasing wages in all of its sit-down restaurants to $15 immediately, raising menu prices by 20%, but at the same time is eliminating tipping. At its counter service locations, it is raising wages to $11 and raising prices by 3%. I believe price +3%, if realized, can offset +10% increased labor cost for most restaurants. Ivar's to raise minimum wage to $15, cut tipping

SeaTac raised the minimum wage all the way to $15 in 2013, but only for certain types of businesses related to the airport. The sky hasn't fallen, but I don't think any broad conclusion can be drawn, since those businesses have pretty much captive customers and limited competition.
How Raising The Minimum Wage To $15 Changed These Workers' Lives

Personally, I will wait to see how Washington's experiment works out before deciding whether to support the Oregon effort to place a similar initiative on the ballot. I probably would not support a rapid and large increase; a gradual increase might get my support, if it is shown to work in Seattle.

I have friends who are surviving on minimum wage or close to it. For most of them, a moderate wage increase would be all positive. In most of those situations, staffing is already at minimum levels and hours likely would not be cut appreciably.

I have other friends who were surviving on minimum wage or close to it, until recently. I've seen what a difference a wage increase has made for them.

I have friends who own small retail businesses, and would be burdened by a wage increase. Kind of like my (late) father-in-law, who I mentioned already.

I am pretty aware of the financial models for large retail businesses. None of them will be driven to losses, or even returns below the cost of capital, by labor costs risign 3% above inflation for a few years (leaving out the ones that are headed to bankruptcy anyway). Their profit margins will suffer. The top executives' bonus structure will be revised to compensate. The share prices will be negatively affected, but labor costs are a fairly small factor in these companies' share prices, other factors will be much more important in determining share performance.

[fintstone]

The problem is that if your least capable and/or least experienced employees are making minimum wage and you increase their wages to $15 hr, what about your better/best employees who are making $15 an hour now? Do they no longer get rewarded for their better performance or do you have to raise them to $20 hr...and the $20 hr employees to $30 hr, etc....and when the folks who have been paying $2 for a burger have to pay $3, will they not demand an increase as well?

After a brief period of increased buying power, don't the min wage employees end up with the same buying power as before (as all prices will go up to compensate for their increased wages with no increased production)?

[rusnak]

Seattle is going to be a blood bath. Again, just watch. The biggest casualties will be the workers themselves. Businesses that can, will move or shut down. No one in their right mind is going to keep their business in Seattle and get killed by $15 min. wage. In the meanwhile, as the min wage goes from $9.47 to $11 for large companies and $10 for small restaurants, customers are reacting to $.50 increases in a Subway sandwich by (1) not buying, and (2) tipping less when they do.

What's that already tell you? And $.50 will not cover the actual cost increase of labor. For every $1 of min wage, add $.50 per hour for associated taxes and insurance.

I'm going to avoid Seattle on my annual Washington trip simply because I don't want to get ass raped when buying anything from a soda or a map, to lunch just because Seattle wants to be progressive.

But you know who will flock to Seattle? Lazy hippies and the LGBT crowd. They just love freebies. To them, this sounds like a great way to stick it to The Man.

[rusnak]

Originally Posted by fintstone

The problem is that if your least capable and/or least experienced employees are making minimum wage and you increase their wages to $15 hr, what about your better/best employees who are making $15 an hour now? Do they no longer get rewarded for their better performance or do you have to raise them to $20 hr...and the $20 hr employees to $30 hr, etc....and when the folks who have been paying $2 for a burger have to pay $3, will they not demand an increase as well?

After a brief period of increased buying power, don't the min wage employees end up with the same buying power as before (as all prices will go up to compensate for their increased wages with no increased production)?

This is what I posted earlier. No, you don't raise them to $20 per hr. Their pay gets frozen, and bonus is eliminated. And no, prices go up instantaneously, as in the case with Seattle.

[island911]

2012 Mc Automation



at drive thrus now.

[widebody911]

What I think would be interesting to see is some sort of realistic modeling done with no minimum wage; I don't know what tools are available to do that. People like to cite the theory that people would work harder to get more money, and that companies will pay more to retain good workers, but I suspect it doesn't work out that way in real life.

[Rick Lee]

Originally Posted by widebody911

People like to cite the theory that people would work harder to get more money, and that companies will pay more to retain good workers, but I suspect it doesn't work out that way in real life.

I dunno about that. But I'm pretty sure a lot of people will be very fat and happy to live on a $15/hr. job, knowing they can never make less than that, no matter how low they perform. All they have to do is keep from getting fired. It was a long time ago, but I can remember when I thought a $30k/yr. job meant I was rich. Lots of folks are still on that rung of the economic ladder and don't plan to climb to the next one.

[rusnak]

Originally Posted by widebody911

What I think would be interesting to see is some sort of realistic modeling done with no minimum wage; I don't know what tools are available to do that. People like to cite the theory that people would work harder to get more money, and that companies will pay more to retain good workers, but I suspect it doesn't work out that way in real life.

I can use myself as an example.

As I already mentioned, my best employees moved from $8 per hour 5 years ago, to $9, then $10 etc now up to $15. I have given bonuses of up to $4K as well. I have a really high retention rate for employees that have been with me for over 3 months. If I have not fired them, then they are worth keeping, and they are given more pay.

My biggest problem is that my crew all want to work as many hours as they can, and overtime is a burden for me, not for them.

I also explained that this understanding of more pay, more hours etc for better work is essential to making my company work. We have become dominant in our market. Oh, and my pay? I don't take raises or bonuses. I reinvest it all back into the company, which is amassing a warchest to go to battle with in the very near future.

[Tobra]

According to these guys, raising the minimum wage has no potential adverse effects. I don't believe them at all though.

I heard a story about a chain restaurant closing all their restaurants impacted in San Francisco, but there is nothing on the internet about it, can't recall the name of the chain, some sort of pseudo-mexican food

[Nostril Cheese]

Originally Posted by rusnak

I'm going to avoid Seattle on my annual Washington trip simply because I don't want to get ass raped when buying anything from a soda or a map, to lunch just because Seattle wants to be progressive.

But you know who will flock to Seattle? Lazy hippies and the LGBT crowd. They just love freebies. To them, this sounds like a great way to stick it to The Man.

[McLovin]

The average small business owner nets approximately $70K/year.

He has to take all the risk, sign personal guarantees for leases, front the money, pay his employees, etc. etc. etc.

$15/hour is $30,000/year.

[zedsdead]

I've scanned this thread and it appears to have missed one basic factor. Inflation.

The real dollar value of the minimum wage peaked in 1968 and has been the decline since. It's no surprise that minimum wage workers are struggling.