Seattle Approves $15 Per Hour Minimum Wage 1040
An anonymous reader writes "The Seattle City Council announced on Monday that it has unanimously approved a $15 per hour minimum wage mandate. The new rate will go into effect starting April 1, 2015 in a tiered, gradual manner that depends on employer size. In the first year of implementation, hourly minimum wage will be raised to either $10 or $11 according to the employer size category. By 2021, hourly minimum wage across the board should be at or above $15. Seattle is the first city to implement a living wage for its lowest earners."
Behind the curve (Score:4, Insightful)
so by the time this kicks in (Score:5, Insightful)
Hello automation! (Score:3, Insightful)
I hope everyone on Seattle loves to interact with machines rather than people. That is what you will experience at McFastFoods, Starcoffee, and any other unskilled labored job.
Unfortunately this will hit teenagers the most. Contrary to what the supports of the home cherry pick, those who earn minimum wage have the least amount of experience. In other words, young people. And while the law will make some exception for teenager salaries, with the addition of all the enhanced automation, you'll have a city with a high population of unemployed teens which causes a different set of issues.
I hope I'm wrong and this turns out to be a good thing. It's nice to see a community try something different so everyone can learn from the experience.
Sweden (Score:5, Insightful)
The same thing with burger flippers, and now also train-personnel (they're currently on STRIKE in Sweden right now, for the rights to work full-time instead of being paid by the hour and shared amongst many desperate job seekers).
This seems to be the net outcome of the society we've chosen today, to let the few have 80% of our assets, and the rest just work as slaves for the 10-20% rich elite. I must stress that I am not a socialist or communist by a long shot, but there is something wrong with a society that can't pay their workers a proper wage.
So, they haven't actually raised it (Score:5, Insightful)
They've just promised that some other group of politicians will raise it years from now?
This seems to be the way so many new laws work: they're delayed until after the next election, so today's politicos can take the praise for passing the law, and the new bunch will be the ones in power when the problems become apparent.
Re:Behind the curve (Score:2, Insightful)
Um the problem with that assessment is you assume it will open more job's and not kill them since now company has to pay more out per employee, which to make up difference means raising prices which in turn raises cost of living. As I said kill job's cause now people want a job in the city but will travel outside the city for lower prices cause people paid less hence problem just compounds itself and ends up killing job's in the city and people are right back to needing multiple job's.
Re:Even higher! (Score:1, Insightful)
Re:Sweden (Score:4, Insightful)
Yes he was. But the outcome of either system is the same - a small group of elites exerts control over the masses - they just differ on who the small group of elites should be.
Yes, exactly. Socialists whine about 'equality', then when they're in power they steal money from the poor taxpayers to pay for their Zil limos; but that's OK, because they don't actually own the Zil limos, they just use them.
Re:Sweden (Score:2, Insightful)
That is not specific to socialism, or a reason for socialism to fail.
Of course it is, because in socialism the 'people in power' control everything. Socialism is the control of the means of production by the State, and the State is a gang of hungry troughers who want to steal as much as they can from the productive.
This is why just about every socialist nation on the planet is on the verge of bankruptcy, and the few exceptions are primarily resource-heavy economies raking in the cash from selling crap they dig out of the ground.
Re:Even higher! (Score:5, Insightful)
Still further there is the even more ignorant people that believe that not only should there be a minimum, but that it should be a "living wage" -- because all work that must be done must also be worth enough to afford a nice cozy life.
Whoa, back the horse up. A living wage is not about a "nice cozy life". It is about not having to choose between eating and paying the rent. Believe it or not, there are some people in this country that have to make that decision. Why should anyone have to work 2-3 jobs just to survive when corporate profits are at an all time high?
Re:Behind the curve (Score:5, Insightful)
Back in the 1990s, i was making $12-14 an hour rolling buritos for a restaurant chain. My wages changed if i went to a different store which is why there is a wage wiindow. Minimum wage went from 3.35 to around 5.25 or so. I only worked at minimum wage once and that was because it increased before i recieved raises.
Anyways, that was only possible because unemployment was low. We hired in kids with no work experience at $1-1.50 an hour above minimum wage just to get people in the door. With raises every 6 months, if you actually put some effort into the job, you could increase that in no time. Skilled people were hired in at even more.
The answer is not raising a minimum wage but lowering unemployment. That was the key to Clinton's "its the economy stupid". Anyone who wanted a job could get one and in most places, they could get one that paid somewhat better than minimum wage.
Minimum wage is not supposed yo be a living wage. It is not supposed to be a career goal. It is supposed to be a minimum for people with no work history so they can prove thenselves. It is a sad sign when our economy and people in it have resigned themselves to accepting the minimum and are relying on the state in order to better their careers. The answer is to lower unemployment. The people will go to whomever is paying the most and companies will have to pay more on their own out of profits in order to get and keep people. Prices don't jump either because they need to stay competitive with other companies.
Re:Behind the curve (Score:5, Insightful)
Re:Even higher! (Score:5, Insightful)
here's a hint, the worse off are much less so.
Re:Behind the curve (Score:5, Insightful)
A 5% increase in the minimum wage could easily be 20% increase in costs.
This is mathematically nonsense. Even if a business's costs come 100% from employee wages (a mythical business that pays no rent, has no equipment, no licenses, no worker training, etc.), a 5% increase in wages is... a 5% increase in costs.
That is the worst-case scenario. You are correct that small businesses don't have the level of efficiency of Walmart - payroll is probably going to be a higher fraction of total cost. The healthcare and the service industry tends to have the worst fraction, with about 50% of costs being payroll. That includes benefits, but if we ignore that for the moment and assume it's all wages, and wages get increased 5% you're still looking at a worst-case increase in costs of 2.5%.
Re:Even higher! (Score:4, Insightful)
You're uninformed and have a vastly over-sized opinion of your own knowledge. Plenty of very credible economists support the idea of a minimum wage, in fact many support a minimum wage nearly 50% higher than the current US minimum wage source here [businessweek.com]
You know when you see 'stupid' people saying they don't see why doctors, lawyers, scientists, programmers etc get paid so much because they don't understand what they do and thus think it must be easy? That's like you commenting on what 'serious' economists think when you clearly haven't got a fucking clue.
We Need a *Maximum* Wage (Score:5, Insightful)
What we really need is a maximum wage; a maximum amount of annual income -- from any source -- that a person can make. This maximum amount should be tied to the median income or some such so that if the rich and powerful want to increase their earning limit, they have to do things that will benefit all of society instead of hurting all of society.
Too much of the economy's lifeblood (i.e. money) is sequestered in the bank accounts of the ultra-wealthy, which a) stalls the economy, and b) gives a disproportionate amount of socio-political power to those individuals. The current vast difference in wealth is as damaging to the human race as things like racism, homophobia, nationalism, etc. (if not more so), and people really need to realize this.
There is an entire class of people that most of society never sees, but which has a profound impact on their lives...and our current economic setup promotes sociopaths and psychopaths into this class. These people have the economic power and the self-centered focus to literally destroy the planet. This situation has to be rectified.
Re:Behind the curve (Score:3, Insightful)
$15 per hour is barely a livable wage currently; there's no way it will be in 2021.
and thanks for pointing out the problem with the minimum wage...
Its NEVER enough.
I'm not suggesting we do nothing about wage disparity, but the minimum wage does little to help the poor. Most of the poor don't have jobs to begin with, and raising the minimum wage will make that even worse.
Re:Sweden (Score:2, Insightful)
I must stress that I am not a socialist or communist by a long shot, but there is something wrong with a society that can't pay their workers a proper wage.
You don't need to be a socialist: lack of a minimum living wage means that the taxpayer is forking out vast quantities of money to subsidise businesses by allowing them to employ people without paying them a living wage. Even the capitalist paradise of the USA understands that you can have too many people starving in the streets and spends billions of dollars on welfare. In the UK, the government makes a huge song and dance about the long-term unemployed while avoiding the elephant in the room: a huge chunk of the welfare budget is being spent to allow working people to sleep indoors and eat food so that their employers can pay them peanuts.
Also, you can't sell things to people with no money, which is a problem... we've tried lending them money that they can't possibly repay, and that went a bit pear-shaped, so we're trying it again to see if it turns out differently this time.
Re:Behind the curve (Score:5, Insightful)
The story was later corrected... the math is off and is incredibly misleading.
That won't stop anyone from using it.
Re:Sweden (Score:2, Insightful)
Learn the difference between socialism and authoritarianism. You might stop sounding like a total moron then.
The more socialist countries (Norway, Sweden, Denmark, Finland, Germany) are doing far better than the more highly capitalist ones post crash.
Re:Eliminates all jobs earning less than 15 USD/ho (Score:3, Insightful)
Imagine the minimum wage is $100/hour. There's a massive number of job which simply do not produce that much wealth per hour - they cannot exist, because to offer that job to someone is to lose money. All those jobs disappear.
Setting aside the stupidity of $100/hr minimum wage... (I mean, why not $1,000,000/hr right?)
The jobs that people do for under $15/hr still need to be done. Not every job produces wealth. Nobody gets rich by having clean floors, or mowed lawns, or bagged groceries. However, these are examples of tasks that arguable have to be done by someone, and the cost of not having them done can, at least in some cases, be argued to be greater than $15/hr.
The same applies to jobs that "do not produce that much wealth" - they still need to be done. Either you pay someone $15/hr to flip burgers, or you stop selling burgers and go out of business. Don't want to go out of business? Pay the $15/hr and increase your prices by the ten cents or whatever it averages out to be. What a goddamn stupid argument you're making.
I'd rather pay an extra buck for a trip to the local fast food place than have my tax dollars end up subsidizing the employees through food stamps and housing because they're barely paid enough to afford the same food they cook all day.
=Smidge=
Who hires workers they don't need? (Score:5, Insightful)
OK so some businesses will not be able to either give up some profit or raise prices to accommodate the higher wages... they go belly up. But then whatever services they provided will be unavailable & someone will jump in & fill that gap. It's hard to believe the claims of job losses tied to the minimum wage.
Re:Behind the curve (Score:4, Insightful)
All this will do is push up the cost of living AND give executives an excuse to fire workers and raise prices, while shutting down small business.
Re:Since when is everyone guaranteed a lifestyle? (Score:5, Insightful)
Keep in mind that a family would qualify for SNAP and rent support also.
Translation: the employer can only get away with paying only $7.50 because the government makes up the difference between that and a realistic wage. Benefits without minimum living wage == state subsidy of industry. Still, don't worry, if you look around enough you'll be able to find someone faking disability to parade in front of the media, and prevent people asking awkward questions about how much taxpayers money goes to allowing working people to survive on unliveable wages.
$30,000 per year (Score:3, Insightful)
$15 per hour is barely a livable wage currently; there's no way it will be in 2021.
$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled. No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.
Re:Behind the curve (Score:2, Insightful)
Re:Behind the curve (Score:4, Insightful)
But it's not that simple, is it? Regulations prevent the appearance of new competition, because they place a disproportionate burden on them.
Re:Behind the curve (Score:4, Insightful)
Two wrongs don't make a right. Nor do any number of leftists.
Contrived example (Score:2, Insightful)
What business hires employees they don't need? If you lay people off because the minimum wage is raised, who takes over the work those people did?
Here's a contrived example to illustrate the point.
Let's say that Acme Inc has a low-skill job that can be performed equally well by either by a human or by a machine. Should Acme hire a worker to perform this job, or purchase a machine?
Answer: it depends on which costs more. Let's say that over the expected lifetime of the machine, the costs to operate it (purchase, maintenance, electricity, etc.) nets out to $15 per hour. Let's say that hiring a worker to perform the job costs $14.50 per hour at the current minimum wage of $7.25 per hour (including taxes and benefits and whatnot).
I actually run a business, and for me, I'd much rather hire a worker at $14.50 per hour than buy the machine at $15 per hour because while the machine really would only be able to perform the task that it was designed to perform, a human being is much more versatile and can be trained and can grow with my business.
But now we raise minimum wage to $15 per hour, which is really $30 per hour once you get done with taxes and benefits. As a business owner, this tradeoff looks very different to me. Now the employee costs twice what the machine costs. While I'd generally prefer to have an employee over a machine, in this case, I'd have to buy the machine and not hire the worker. I mean, it's twice the cost if I hire someone. I've got a family to feed. Not happening.
Re:Even higher! (Score:3, Insightful)
Imagine if there were a minimum home price. Say, $75,000. Sounds reasonable, right? I mean, everyone should have a right to be able to sell their home for enough to buy another somewhere. But what about houses that aren't worth that much (so cruel, so judgmental!)? They just sit around, and the owners are literally stuck. Sort of like today's young workers, for whom the job market just keeps going up and up and up, leaving new household formation at all time lows. Instead of being able to get a job, they have to go to college and get a degree along with a lifetime of debt slavery, and often wind up with jobs that don't require degrees, and certainly don't pay enough to service the debt.
Re:Even higher! (Score:5, Insightful)
Americans NEVER seem to look at other countries. No matter what you're discussing, health care, gun laws, wages, whatever, they always speculate wildly about what might happen if. Never mind that much of the rest of the world has already tried it and found it works pretty well.
Re:Sweden (Score:3, Insightful)
That's the nature of capitalist society, capitalism naturally breeds inequality. Marx's analysis of capitalism still holds true.
On the other hand, Communism kills tens of millions of people through starvation (Ukrainian "famine", Great Leap Forward, etc.). So you gotta make the call if you want the poor to starve or to just be unequal.
Re:Behind the curve (Score:4, Insightful)
Because wages are generally only a fraction of the cost of goods sold, raising wages doesn't result in anywhere near as much of an increase in prices
The natural experiment is the fracking lands of North Dakota, where labor is so scarce that the market wage for McDonalds starts at $10.50/hour [ft.com] and they get a $300 signing bonus - but the Big Macs cost $1 more than usual.
Re:Total nonsense (Score:4, Insightful)
Re:Behind the curve (Score:2, Insightful)
Someone brings up a point you can't counter, so you change the meaning of the word "wage". Why do liberals always do this? I mean ALWAYS. I have never met another set of people who do this on any regular basis.
Re:Behind the curve (Score:2, Insightful)
Re:Even higher! (Score:4, Insightful)
and those countries with higher minimum wages also tend to have better social services, and higher taxes to accommodate the increase in unemployment. You forget that we in America invented the "i've got mine, fuck you" mindset.
Re:Behind the curve (Score:2, Insightful)
If only we could raise demand, by sticking income into the hands of pure consumers... like the poor.
The issue isn't what the minimum wage should be forever, it will always need to increase, as we have inflation and productivity increases. The issue is distribution of wealth. Minimum wage is a useful tool to drive income to Labor instead of Capitol. Limiting rent seeking behavior is almost exclusively good for the people in general.
Re:Even higher! (Score:4, Insightful)
Not true. We seem to look at third-world shitholes and say "hey, at least we're not a third-world shithole, we've got $THING better than they do". In my experience, at least, we don't generally compare ourselves to other first-world countries and especially not western and northern Europe, probably because we privately admit to ourselves that (unemployment aside) we're not doing as well as they are generally.
Re:$30,000 per year (Score:5, Insightful)
$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled.
It's truly sad how many of this sort of ignorant comments a story like this brings out.
The main thing to take note of is that many people who work for minimum wage don't work full-time. So, you can't just extrapolate from an hourly wage to an annual salary. And most part-time workers are subject to the whims of their employer in terms of work schedule. If you're not getting enough hours from one job, it's often difficult to add on another part-time job, because many employers demand flexibility in your schedule. You can't come in a few times? Fine -- they'll start calling someone else.
No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.
If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by." You might even be able to live reasonably well, if you are budget-conscious. If any of those is not true, it can be harder. If you have a number of these "conditions," even assuming a full-time job and a $30,000 income, it may not be easy.
Re:Wages and prices are (mostly)independent variab (Score:2, Insightful)
That's basic economics. The wage goes up, but prices only have to go up a tiny fraction due to the distributed source of paying for that wage. It's not this 1 for 1 that people think, it never has been and it never will be. That argument is brought out every single time min wage is increased, and it gets proven wrong every single time.
The math has been done to prove in order to raise McDonalds workers wage to 15/hour, the price of a big mac would only need to go up by 43 cents. Thats all.
Re:Total nonsense (Score:4, Insightful)
So you're going to give the cashier a 50% raise and give nothing to their manager?
Stop moving the goalposts. The post I was responding to said that a 50% increase in minimum wage equates to a 50% increase in labor expense. It does not. As a separate issue, you could give a raise to their manager (but not necessarily 50%). And it doesn't need to go all the way up the chain to the execs!
Re:Behind the curve (Score:3, Insightful)
Link to the corrected story? my google fu seems off.
Re:$30,000 per year (Score:2, Insightful)
The main thing to take note of is that many people who work for minimum wage don't work full-time.
Most of these people are called "teenagers".
Re: Behind the curve (Score:3, Insightful)
Freeze spending at current dollar levels, let inflation squeeze out the waste, force the gov't to make hard decisions about what us and isn't necessary.
I'd also freeze tax rates, as the economy increases revenue will increase and we can start reducing our annual deficit spending (not increase spending when tax receipts increase).
If, in a fit of 99%er passion you feel the need to increase tax rates on the wealthy, fine, but every penny in additional tax revenues goes towards paying down debt/decreasing deficit spending.
We have a $3.8 Trillion annual budget, spread out over 330 Million citizens, that comes to over $10,000 per person per year in spending at the federal level - that seems like plenty.
(BTW, we not only have the federal EPA, we also have 50 state EPA agencies, think we might have some overlap we could eliminate and cut costs? Same for education (one federal DoE, fifty state DoEs)...)
Re:Behind the curve (Score:4, Insightful)
A) He used wage correctly.
B) Every group changes the definition when they are loosing. If fact in the last 16 years, the pubs have been notorious of it.
The rest of your original post is factual nonsense. So you might want to look at some actual data and facts. For those of us who have researched it you look like an dumb shit.
Re:Total nonsense (Score:4, Insightful)
Maybe you just don't understand what the word 'average' means.
Maybe you don't understand that increasing minimum wage by 50% is not equivalent to increasing the average wage by 50%.
Re:Behind the curve (Score:5, Insightful)
Re:$30,000 per year (Score:4, Insightful)
It's truly sad how many of this sort of ignorant comments a story like this brings out.
The main thing to take note of is that many people who work for minimum wage don't work full-time. So, you can't just extrapolate from an hourly wage to an annual salary. And most part-time workers are subject to the whims of their employer in terms of work schedule. If you're not getting enough hours from one job, it's often difficult to add on another part-time job, because many employers demand flexibility in your schedule. You can't come in a few times? Fine -- they'll start calling someone else.
No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.
If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by." You might even be able to live reasonably well, if you are budget-conscious. If any of those is not true, it can be harder. If you have a number of these "conditions," even assuming a full-time job and a $30,000 income, it may not be easy.
Why does it have to be easy? If you made poor decisions in your life (no skills, children you can't afford, living in an area you can't afford) why is it my responsibility (or the government's responsibility, or a private company's responsibility) to provide for you? The only item I agree with on your list is health, often health problems are not under a person's control. For things that ARE under a person's control, they made their choices, they should be the one to pay the piper. If your skills do not command a high enough salary it is your failing, not your employer's. If you provide more value for your employer and your job isn't so easy that they can hire a 16-year-old off the street to replace you then you have bargaining power when it comes to salary negotiations. If you don't educate yourself and your only skills are what your employer teaches you after being hired then you shouldn't expect to make a ton of money.
Re:$30,000 per year (Score:3, Insightful)
If you live where there's crazy real estate and you're making minimum wage, you're not very bright and should move away.
If you have a child...
Re:Consequences (Score:4, Insightful)
Don't be daft. Of course Walmart would increase prices if the minimum wage were increased just like everyone else. If they had to increase wages 50% UNILATERALLY they would instantly be unprofitable because they couldn't raise prices in that instance.
One minute you claim that a 50% wage hike would cause Walmart to be unprofitable, and the next you claim that they would increase prices. You can't have it both ways, and that's all I was trying to say. Also, any wage increases would be unilateral; Walmart's workforce is not unionized, and therefore all decisions regarding wages are made unilaterally since there is no second party to wage negotiations.
Regarding payroll taxes, you're oversimplifying. Many payroll taxes are regressive, with a cap on taxable income. Fringe benefits that you mention are also regressive (for example, employer's health insurance contributions for employees is not linearly proportional to wage, and doubling wages doesn't double insurance costs). Consequently, a 50% hike in wages does not result in a 50% hike in overhead costs. Additionally, depending on how you're cooking your books, you did already mention a $27.5B hike in labor costs. If the initial $55B in labor costs included this overhead, then the $27.5B increase also includes the 50% increase in overhead (despite the real increase in overhead necessarily being less than 50%).
7.5% isn't a bound of any kind - merely an illustrative simplistic example that the real number is a LOT higher than 1.1%.
But that's my point. 7.5% isn't a "LOT" higher. It's a lot less than the 50% growth in wages that we're talking about. Most businesses would jump at the chance to increase their costs by 7.5% while at the same time increasing their revenues by 50%, and I think we'd all agree that this is a good deal. Why does this not hold true when discussing wage hikes?
It's much more complicated than you are making it out to be. By raising the minimum wage you are increasing costs for all domestic manufacturers (and there are LOTS). This effectively is a subsidy to overseas (read China) manufacturers who do not have wage supports at the expense of domestic ones who do. Manufacturers in the US would have to either lose business or in many cases simply shut down. So to prop up Walmart associates wages you are doing so at the expense of US manufacturing workers. Since they shop at Walmart too that is revenue that Walmart isn't going to get AND you are costing people their entire paycheck to raise someone else's by 50%. Did you think the money would come with no consequence?
1) Tarriffs
2) The domestic service/retail industry dwarfs the domestic manufacturing industry. The perfect is the enemy of the good.
3) The money comes with consequences, and on the whole, it's still a positive.
There's no evidence to support your remaining claims regarding inflation, unemployment, supply chain effects, etc. However, I do agree that it's NOT simply that everyone is magically better off with no downside anywhere. Some people would undoubtedly be worse off, but overall, it would be a benefit to society.