Thoughts on a $15/h Minimum Wage?

[thomsaem]

@orlando_wcbc My industry average for warhouse labor pay is $15 - $20.

If we up the minimum wage to $15, current staff can work anywhere to make the same so we would have to increase our prices to pay for the employee raises to make it still worth it to these employees to do a labor intensive job rather then flip a burger that in turn raises our overhead to still turn a profit to stay in business.

So people who use our service will now pay more like every other product.

Vast majority do not realize the current burger flippers will be out of jobs because of higher educated and proficient people will not mind flipping burgers for $15/hr.

Minimum wage I consider a stepping stone wage and I am sorry that alot of humans get comfortable working those jobs but anyone with a drive for personal success should have moved on to higher paying jobs.

 

[sally_wheeler]

@thomsaem I don't believe raising the minimum wage will help because in the end businesses will just increase price as you've said.

But I also believe that not everyone can get a higher paying job and should be able to afford the basics of life. I'm just not sure what the solution there is, though I haven't given it much thought either.

 

[pkeck]

@thomsaem i wager all these $15-$20/hr guys will continue to make $15-$20/hr through the raising of the minimum wage, and the businesses employing them will bring home more profits because they will raise prices but ultimately realize that raising the minimum wage actually weakens the bargaining power of the working class.

the $7.25-$15hr guys will be laid off in droves, hours shortened, and automated away, ballooning the labor pool as all these underemployed workers will be forced into retraining.

the $15-$20/hr guys will be thankful to be working as they slip deeper and deeper into debt.

 

[revelationdaily]

@thomsaem Very few people would “want” to flip burgers for 15$/hr.

 

[613jono]

@thomsaem That’s ones of the problems I see. Min wage isn’t meant as a career, but so many people want to just scrape by and work the bare minimum to fund whatever other hobbies they have and put as little as possible energy into their work. I don’t get it, if it’s worth doing I figure it’s worth doing really really well, but the only time I made minimum wage was when I was 15, I never saw min wage after 15.

I just don’t get it, if a 16yr old isn’t even interested in working minimum wage - why should anyone else be? Find jobs or make a job that pays more it just takes a bit of confidence in yourself.

 

[moonwalker_03]

@orlando_wcbc In states and locations that are currently significantly below the $15 per hour level, this will increase automation in some industries, will cause fewer minimum wage people to get hired and will (no matter what the 'current research says') cause job loss. When the minimum wage increased in NY city, within 2 months every single McDonald's had banks of kiosks for people to place their order. Where there used to be as many as 18 people behind the counter at lunchtime, there are now 4 or 5. In off hours there are now 2 or 3 people behind the counter.

It's cheaper to purchase (or create) technology that will cost you $50,000 if the increased expense is higher than that and will never go away. It's just the way someone running a business has to think. Businesses are not charities -- they are created to provide income to the owners. That's all.

 

[truthsearcher63]

@orlando_wcbc Look into automation services where possible. Reality is most business don't need half the employee's they have.

 

[613jono]

@neowatchman Not necessarily. Lots of automation, especially at the small business level can be pretty cheap. It’s especially cheap when compared to cost of employing someone. I’ve found many just don’t know the options or don’t understand them and won’t justify the price tag because if this.

 

[neowatchman]

@orlando_wcbc There have been several comments that high minimum wages lead to job losses. Standard supply and demand dictates this outcome, but substantial evidence says differently. Places that have high minimum wages, like Denmark, Australia, and Seattle all have healthy economies.

https://www.bloomberg.com/opinion/a...-minimum-wages-haven-t-increased-unemployment

And yes, you can quickly find opinions and studies that find just the opposite. So set all that aside for a minute for a thought experiment (please bear with me thru the lame economic 101 review):

If we look at supply and demand for one item, tomatoes, we find that increasing the price of tomatoes leads some people to opt not to put tomatoes on their salads. They don't have to have tomatoes, they can do without sometimes. Demand will go down. But what if we increase the price for all foods? Will people eat less if food prices are increased? Maybe? But this is fairly 'inelastic' demand. Increase food prices 100%. Do you expect a 100% reduction in eating? People may shift to cheaper foods in the short term. They may find they need to cut back on cable tv, and a few other things. But in the end, they still have to eat.

So if we not only increase the cost of food by, say for instance, 15%, and also increase the cost of EVERYTHING ELSE that is low-wage intensive by the same 15%, while those low wage workers have increased their wages by 30%, what has happened? The lower tier hourly workers are definitely better off. Income inequality has already been reduced significantly. Some of the better paid employees will demand pay increases too, because of inflation of certain items, but not all things. The rich among us will not see much inflation. Land prices are not directly effected. Commercial rental prices are not directly effected. Neither are accounting fees, legal fees, business loan and mortgage rates, dock fees for boats, golf fees. Yard work will cost more. Consumer items from overseas will cost the same. There will be a restructuring of some of the economy, which is localized pain here and there. Some businesses will simply not have the gumption to raise prices, and will suffer badly from that weakness.

I learned many years ago that I needed to raise prices every year, or else my price increases would be too much for people to swallow. Every time I've raised prices by 3 or 4 or 5% (every year), I've only gotten busier. That only leads me to believe that if a quarter of the businesses raise prices 7% for 3 years in a row (gradual roll out of the minimum wage increases), the market will adjust quickly, and all those workers with higher wages will be eagerly spending their extra money on things that are important to them: clothes for their kids, eating out more, better housing, better transportation, i.e. things that help the economy right now.

(may add more after more thought)

male/white/59/business owner for 25 years/38 employees, most $11 to $22/hr/manufacturing tied to residential construction market/geographically local business, most deliveries within 3 hours distance

 

[karrington]

@neowatchman

like Denmark, Australia, and Seattle all have healthy economies.

The most expensive places to live. Rent and housing is through the roof there.

 

[tammyinga]

@orlando_wcbc I don't support a nationwide flat $15/h minimum wage. There is too much of a discrepancy between our small Georgia (or any) town and Seattle, San Fransisco, New York City, etc. I agree the federal minimum wage is too low, but instead of just increasing it across the board, I think we need to implement a national living wage tied to cost of living of each individual area. Maybe there's a base wage ($9 or $10/hour) and then a supplemental living wage for individual areas based on the government's CPI data and some kind of formula. The minimum wage in many rural areas would probably just be the base rate, with minimum wage in larger metropolitan areas with very high cost of living rising as high as maybe $15-20/h.

That's the only way to really be fair about it in my opinion...

 

[monica123]

@tammyinga The real problem is that you just can't raise the rate for minimum wage it would affect wages across-the-board. If somebody is currently making 15 or $16 an hour because they worked up to it over the course of a couple years and now minimum wage is $15 you have no choice but to raise the wages of people in the middle and higher end.

 

[aegistoronto]

@orlando_wcbc The increase would be phased in over time. What everyone tends to leave out of this discussion is the increased revenue small businesses can earn when their customers, or people who couldn't previously afford to be customers suddenly have some disposable income. If a business doesn't get any benefit from that alone, they can raise prices to compensate. In other words, putting more money in lower income people's hands spurs spending and can be a net positive for small businesses. This has been borne out in places like Seattle and NYC.

 

[neowatchman]

@aegistoronto I agree. All the extra money put into low-income house holds gets spent immediately, boosting consumer spending.

 

[brunilda]

@neowatchman It is spent, because all prices in the area go up, because of businesses needed to increase their prices, to compensate for hourly rate increase?

 

[neowatchman]

@brunilda How many businesses have costs that are 100% labor, where a 30% increase in labor costs would increase their cost of services by the same 30%? Not many. That would be a business where there is no physical building either, no insurance, no vehicles, etc. Labor is 30% of my revenue, roughly. Increase my labor costs by 1/3, and that is less than 10% increase in my overall costs of doing business. So I increase my prices by 12%, and workers who want my products come out ahead. And only labor intensive products and services go up that much. Rent prices are not effected as much. Neither are insurance prices, legal fees, fuel prices, products from Asia, etc. Workers come out ahead.

 

[monica123]

@aegistoronto But the thing is, it's not just lower income people. Wages will have to be raised across-the-board. If you have a worker with some experience making $15 an hour now and the minimum wage is raised to $15 you have to raise the person's wages that has experience, and so on and so on.

 

[kidkaos2]

@aegistoronto Ha! Nobody in the state of NY would EVER have disposable income at $15 an hour, not even close!

 

[revelationdaily]

@orlando_wcbc You’re also forgetting that everyone else making minimum would have their wages increased as well which would increase business. You may have to lay off a few people though.

 

[naturewalk]

@orlando_wcbc Because I'm in California, minimum wage laws affect me in indirect and weird ways.

For the most part I don't pay minimum wage. I might get someone new to the industry that I'm training and start them out there but they generally earn their way up within 3-6 months.

CA has a lot of really fun labor laws. Like the requirements for becoming an exempt employee. I have a couple that meet all the qualifications. Now one of the requirements to become exempt is that you have to earn twice minimum wage.

Now the one law I love the most is that servers in California have to be paid full minimum wage plus tips. Now once the minimum wage goes up to $15/hr. These servers will easily be making $20-30 an hour on slow days. The problem is in my industry and I'm sure for other local businesses as well is our low skilled workers (ie requiring professional certificates with 6 months of school) get paid $20-30/hr and they have to maintain their licenses. So why would anyone want to go into our industry if we pay significantly less than what you can earn as a server. As a result there's a huge hole in the supply of dental assistants in our area and I would wager the state because of it.

If you end up at a decent restaurant it's even easy to earn more than what hygienists make an hour (in our area $50-60)

And the kicker that makes me more upset is that because of the increased wage costs menus prices go up and as a result so do tips.

I get it. When I'm outside of California I believe in tipping my server well because I know that's their main source of income. But inside the state I just feel dirty tipping someone who has made a career of it and probably makes more money than someone who dedicated themself to self improvement or education in a position that doesn't get tips.