Los Angeles Raises Minimum Wage To $15 an Hour 1094
HughPickens.com writes: Jennifer Medina reports at the NY Times that the council of the nation's second-largest city voted by a 14-1 margin to increase its minimum wage to $15 an hour by 2020. Los Angeles and its almost 4 million residents represent one of the biggest victories yet for those pushing wage increases across the country. Proponents hope it will start to reverse the earning gap in the city, where the top 7% of households earn more than the bottom 67%.
Detractors point out the direct cost increase to businesses, which could total as much as a billion dollars per year. If a business can't handle the increased cost, the employees this measure was designed to help will lose their jobs when it folds. An editorial from the LA Times says it's vital for other cities nearby to increase their minimum wage, too, else businesses will gradually migrate to cheaper locations. They add, "While the minimum wage hike will certainly help the lowest-wage workers in the city, it should not be seen as the centerpiece of a meaningful jobs creation strategy. The fact is that far too many jobs in the city are low-wage jobs — some 37% of workers currently earn less than $13.25 an hour, according to the mayor's estimates — and even after the proposed increase, they would still be living on the edge of poverty."
Detractors point out the direct cost increase to businesses, which could total as much as a billion dollars per year. If a business can't handle the increased cost, the employees this measure was designed to help will lose their jobs when it folds. An editorial from the LA Times says it's vital for other cities nearby to increase their minimum wage, too, else businesses will gradually migrate to cheaper locations. They add, "While the minimum wage hike will certainly help the lowest-wage workers in the city, it should not be seen as the centerpiece of a meaningful jobs creation strategy. The fact is that far too many jobs in the city are low-wage jobs — some 37% of workers currently earn less than $13.25 an hour, according to the mayor's estimates — and even after the proposed increase, they would still be living on the edge of poverty."
ENOUGH with the politics! (Score:5, Insightful)
Is Slashdot TRYING to lose readers? I thought this was a TECH forum.
Re:ENOUGH with the politics! (Score:5, Insightful)
Well, some people who earn less than $15 work in tech companies. That's a tech angle, right? /s
Re:ENOUGH with the politics! (Score:5, Insightful)
Or you're still working your way through school.
LK
Re: (Score:3)
Or you're in high school flipping burgers, still living with your parents and without much actual responsibility.
Re:ENOUGH with the politics! (Score:5, Informative)
If you're flipping burgers in high school, or even while you're in your 20s going to college, you're doing the right thing. Just about every successful person I know started out doing menial jobs at a young age. Bonus points if you pay extra attention to how your boss does his/her job while you're doing yours.
Re:ENOUGH with the politics! (Score:5, Insightful)
Oh and something else to add: Raising the minimum wage too high takes away those menial jobs from younger kids with no work experience at all.
Re:ENOUGH with the politics! (Score:5, Insightful)
People say it doesn't do that, but there's a whole lot less service jobs than we used to have. There used to be kids who would wheel your groceries out to your car for you. This service basically doesn't exist any more. Most grocery stores don't even have a second person bagging the groceries like they used to. It's actually quite difficult finding a full service gas station unless you live in one of those states where you aren't allowed to pump your own gas. That's just two easy examples. There's a lot more jobs that aren't getting done, or people are expected to do for themselves. If the minimum wage keeps rising, it won't be long before I have to enter my own order at every McDonald's. They are already testing it out at certain locations. When you don't have any of your own expenses to pay for, then $7 an hour can be plenty of money. The problem is that people think that every job should earn a living wage. I tend very much to disagree. People shouldn't expect to be able to support themselves off a menial job. They should be setting their sights higher. Increase their skills and get a better job instead of complaining that a job that could be done by a 14 year old isn't enough to support your family.
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Re: ENOUGH with the politics! (Score:5, Interesting)
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You thought wrong.
Re:ENOUGH with the politics! (Score:5, Funny)
Re:ENOUGH with the politics! (Score:4, Informative)
Canada pay an average of about half as much in taxes (scaled to their income), for the same quality and the same service.
From what I've heard about medicine in Canada from locals, this is laughably untrue. Only someone who has never had more than a minor boo-boo could claim the service is the same.
Re:ENOUGH with the politics! (Score:5, Informative)
Canada pay an average of about half as much in taxes (scaled to their income), for the same quality and the same service.
From what I've heard about medicine in Canada from locals, this is laughably untrue. Only someone who has never had more than a minor boo-boo could claim the service is the same.
You are completely wrong.
I've talked to doctors and patients who have experienced both the Canadian and US systems, and I've read the literature comparing outcomes for different procedures in the two systems. http://www.openmedicine.ca/art... [openmedicine.ca] I read Canadian medical studies every week or two.
If I had a heart attack in front of the University of Toronto medical school, I would be confident that my survival and other outcomes would be just as good as they would be in front of the New York University medical center in New York. At one time, the breast cancer outcomes were slightly better in the US than in Canada, because the US was aggressively diagnosing and treating (sometimes overdiagnosing and overtreating) breast cancer, but by now the Canadians have adopted everything useful that the US was doing. OTOH, the Canadian outcomes for childhood leukemia were slightly better. The Canadian outcomes for diabetes were much better, with better control, fewer amputations, etc.
Gordon Guyatt, a professor at McMaster University, basically invented evidence-based medicine, which is the practice of making medical decisions based on the statistically valid scientific evidence, rather than prescribing drugs because the drug companies are giving you a free trip to Hawaii if you meet their quota.
It is true that American doctors are more aggressive about treatment, and will give you a quick appointment if they have slots available and you have good insurance. OTOH American doctors are more likely to treat patients unnecessarily. An American pulmonologist is more likely to see a spot on your x-ray and give you a lung biopsy. Lung biopsies have a fatality rate of about 1/1,000, and most of them are unnecessary. But in Canada, when you have a life-threatening condition and need a CAT scan immediately, they put you on top of the list and give you a CAT scan the same day.
OTOH if you don't have health insurance in the US, your access to health care in many states is nonexistent, and hospitals in Texas for example will kick cancer patients out in the street if they can't pay. http://www.wsj.com/articles/SB... [wsj.com] There were several studies published in American medical journals in which researchers called doctors' offices, described the symptoms of a life-threatening condition, told them that they were on Medicare or Medicaid, and asked for an appointment. Depending on the studies, about half the doctors refused Medicare and three-quarters refused Medicaid.
The evidence is overwhelming that Canadian health care equals the US system in quality and service, and costs about half as much. Of course if you decide things on the basis of ideology http://www.newyorker.com/news/... [newyorker.com] rather than evidence you may not be convinced.
Stupid reasoning. (Score:4, Insightful)
I love seeing this crap in American articles. "Oh Noes! If we pay people more, it will cost businesses more!"
Lets look at this for a second.... Who are a businesses customers? Hint: It's the people who get paid a wage. These people get more money, more businesses get more customers. More customers mean more sales. More sales means more profits.
Is it really that hard to grasp that concept?
Re:Stupid reasoning. (Score:5, Insightful)
1. It will increase prices of products as well, so at the end of the day it's just a cycle where nothing really happens.
2. Do you actually think the same amount of employees will be employed if companies are mandated to pay them more? Many of them will lose jobs.
Minimum wage hikes tend to hurt two parties the most:
1. Small businesses, who are typically operating on rather small margins anyway. Unlike larger businesses, they can't easily move to places with lower minimum wage or offshore jobs.
2. Middle class, because they suffer the increase in costs incurred by minimum wage hikes, but don't benefit at all from it because they're already above the minimum wage.
Minimum wage increases try to tackle a real problem, but do nothing to actually solve it. Minimum wage should be adjusted in accordance with inflation and nothing else.
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yeah, it's better to have the federal government give food stamps to full time walmart employees
Re:Stupid reasoning. (Score:5, Funny)
I love seeing this crap in American articles. "Oh Noes! If we pay people more, it will cost businesses more!"
Lets look at this for a second.... Who are a businesses customers? Hint: It's the people who get paid a wage. These people get more money, more businesses get more customers. More customers mean more sales. More sales means more profits.
Is it really that hard to grasp that concept?
What's more, since the minimum wage isn't possible to live on, the employees end up getting government services.
Which come from taxpayer's pockets.
THat's the weird thing. The people against hiking the minimum wage would profess to be conservative. I guess it's correct that the neocons are just Trotskyites that are registered as Republican. I do see the US's largest employer, Walmart, is braying like a jackass about how they've raised wages. They must want a medal or something.
Re:Stupid reasoning. (Score:4, Insightful)
I love seeing this crap in American articles. "Oh Noes! If we pay people more, it will cost businesses more!"
Lets look at this for a second.... Who are a businesses customers? Hint: It's the people who get paid a wage. These people get more money, more businesses get more customers. More customers mean more sales. More sales means more profits.
Well, they can't produce the same product at the same price when they are paying higher minimum wages. So they will have to raise prices, which would actually lower sales. The minimum wage earners still won't be able to buy the products because the cost of the product will have to go up by the amount their wage went up.
Re:Stupid reasoning. (Score:4, Insightful)
That's not what people are saying. What we're syaing is if we pay people more, the people whose labor isn't worth the new minimum won't have a job at all. The progressives in the US have succeeded in turning the US into a European country. I hope they own it when youth unemployment is at 25% in a normal economy, and minimum wage isn't enough to pay for increases in the cost of living.
I didn't mind interacting with tellers before ATMs, and I don't mind using ATMs. I won't mind when I use automated ordering machines at McDonalds and eat machine-made burgers, either. But I think it's stupid for the government to force people out of their jobs.
Re: (Score:3)
...in the short term.
The other option is to effectively reduce wages by not increasing them for CPI etc and have no customers to purchase any of your products....
Meanwhile, tax avoidance is rife in the corporate world - which leads to much less tax revenue for Governments, which leads to a degradation of society and loss of services that benefit society.
So, you have the question of everyone losing out, or start with more at the bottom to allow people to actually spend money on goods and services - which actually works. Trickle
Re:Stupid reasoning. (Score:5, Interesting)
Meanwhile, tax avoidance is rife in the corporate world - which leads to much less tax revenue for Governments, which leads to a degradation of society and loss of services that benefit society.
Can't blame people for avoiding paying taxes if they don't have to. Did you buy a home instead of renting? Shame on you for getting that mortgage interest deduction? Have kids? Shame on you for getting deductions for your kids.
I could get a lot more worked up about how much more money we could get out of businesses, except for one fact, and that is that the government collects 30 times as much in taxes in CONSTANT DOLLARS as they did in 1940. Now granted, the population is 3 times as high as it was in 1940, so I could see why the feds would need 3 times the taxes (minus some amount for economies of scale of course). But there is just no room in my imagination for why they would need 30 times as much taxes to support 3 times the population and somehow manage to also run a deficit. Now, they ran a deficit in 1940 as well, but let's think about this for a minute. If $135 Billion in 1940 would have been enough to make ends meet, then how come with three times the population now, it takes $3.2 trillion? These are constant dollars people. The actual dollar figure in 1940 was $9.5 billion, less than 1/300th of what we spend now on triple the population.
Re:Stupid reasoning. (Score:5, Insightful)
Sorry but your chosen baseline year, viz. 1940 makes the whole comparison moot. The world was just coming out of the great depression and entering a global war. Why don't you compare 1975 with 2015 instead?
In this case government collection is up only 20% over the last forty years.
That is STUPID : inflation (Score:5, Informative)
the government collects 30 times as much in taxes in CONSTANT DOLLARS as they did in 1940
Bullshit the inflation from 1940 is already ~15 times. In fact looking at your next sentences:
Now, they ran a deficit in 1940 as well, but let's think about this for a minute. If $135 Billion in 1940 would have been enough to make ends meet, then how come with three times the population now, it takes $3.2 trillion?
Because 135 billion alone in 1940 is 2.2 trillion to 2.3 trillion of today in constant dollar. Any CPI calculator will confirm that baring a few % +/-. The delta of 900 million is from federal programs which did NOT exists in 1940. From environmental protection, drug enforcement, NASA, EPA, etc...etc...
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Re:Stupid reasoning. (Score:5, Funny)
wait- indians eat hamburgers?
holy cow, that's news, right there!
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And now you know why minimum wage should not have stagnated in the first place.
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their customers will have more money so they will be able to afford the price increases.
I disagree. Say someone earns someone earns $60 per day before the wage increase and $120 per day afterward. A product costs $60 before the price increase and $120 afterward. What can the customer afford in each case?
Are you willing to prove your point by taking a pay cut to 3 dollars per hour?
Probably not. The minimum wage will kill us is just as valid as trickle down economics, and job creator theory. As in not at all.
Very seldom is prosperity achieved through poverty. Do you have any examples?
Re:Consumer Price Index (Score:4, Insightful)
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Standing by for the "No True Scotsman" arguments when we ask for the proof of how many jobs were created, or how much of that trickle made it to the bottom.
Trickle down is based on the idea that if you have ten dogs, and give the fattest one a hot dog, he'll share it with the other nine..
And it still doesn't change the fact that some employers are using the blatantly socialist tactic of having the government subsidize their employees.
N
"Trickle down" economics (Score:3)
LOL! Wipes tear from eye. Wow. Just wow.
That is so wrong. This has been tried for the last number of decades. It absolutely does not work. This was justification for tax breaks for the rich. As it turns out the rich manage to pretty much stay rich by not spending their money. We see today more than ever before a disparity between the rich and poor. That whole 1% thing remember? They fact that you mention "Trickle Down Economics" and in the same breath call someone else "economic illiterate" is just marvelou
Re:Stupid reasoning. (Score:5, Insightful)
The part you're missing there is that the money you give to the employee needs to come from somewhere, and it usually comes from people who would have done something more useful with it than the employee spending it on consumption.
"More useful" by whose definition? Money is llike water - it can only generate power if it's moving. That 'useful stuff' you speak of often looks like putting the money behind a dam, where it does nothing to stimulate the economy. Consumption, on the other hand, drives the economy.
Not that I'm in favour of this state of affairs - the entire economy is a pyramid scheme/shell game, and the sooner everybody realizes that, the sooner we can put in place something sensible that minimizes the wealth gap and drastically reduces our senseless raping of Earth.
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Wrong. You can't consume what hasn't been produced. Production comes first; production is fundamental.
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Citation for what? I asked you to explain what would ever motivate a business to hire a worker who doesn't at least produce as much value as he is paid.
Money that is in bank accounts isn't "idle"; rather, it is invested in stock, which means that instead of paying for consumption, it pays for job-creating investments. And money in treasury securities doesn't "sit idly" either, it pays for
Hmm... (Score:2, Insightful)
So, they want the government to force the minimums up higher to "living wages," but they don't think everything else will just inflate along with it? Everyone's salaries go up, too! Yay! Wait, groceries and gas just went up too! BOO! Whoa, the dollar is now worth 2 pesos? QUICK, CASH IN YOUR MONIES FROM ACAPULCO! Dude, where's my retirement savings?
Re: (Score:2)
So you like paying taxes to subsidize corporate payroll?
Re:Hmm... (Score:5, Informative)
Except that there's other factors in play as well. A minimum wage increase will give the bottom 60+% of workers more spending power, this increased spending will boost the income of local shops which will help to improve the local economy.
This is economics 101, for an economy to work people have to spend money, the more money that people spend the better the economy works. Increasing the spending power of the vast majority of local residents is a very good thing for the local economy.
Re:Hmm... (Score:5, Informative)
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There are two issues that exacerbate the problem of wealth inequality.
1. Very wealthy people even if they spend money on waste that doesn't improve productivity still likely earn more money from their wealth, than they can readily waste. For them to actually start losing significant chunks of their wealth requires very long chains of poor decisions.
2. Poor people are on the opposite end of the spectrum. Yes, they can accumulate and build significant wealth if they are dedicated to it and leverage their prod
Re:Hmm... (Score:4, Interesting)
We are not a manufacturing economy anymore. Yes we do manufacture things still, but we are predominately a services economy now. This is a critical point most people do not understand.
Re: (Score:2)
The increase in wages is expected to greatly outpace any increase in costs for the poor. Even if everyone gets an equivalent pay raise, that only increases labor costs, not material costs. Gas won't go up 50%, food won't go up 50%, etc.
In fact the only thing that would go up by 50% would be labor-intensive services. However since the poor primarily spend their wages on goods and not services, they are among the least impacted by an increas
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Nope. The Fed sets the average inflation level by managing the money supply. So an increase in the minimum wage will make some prices increase, but other prices will be forced to decrease. Overall inflation will be unaffected.
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Because he is making the very large mistake of think everything that is not labor IN THAT BUSINESS is a 'fixed' cost. And it most certainly is not. Take the example of McDonalds. The mininum wage guy at McDonalds gets a raise, and the original poster assumes that his raise is the total increased cost to McDonalds, so it should not affect the price of McDonalds products all that much. But the minimum wage guy at the plant that prints soda cups also gets a raise, so the price of soda cups goes up to pay f
This is good (Score:5, Interesting)
Australia has a minimum wage of around $17USD/hour (around $20AUD) which increases 20% if you are a casual. Our poor people do well.
You know how everyone whines about big corporates making too much money; well this is the best way to redistribute that wealth.
Paying your poor people well, helps lift them out of poverty.
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Re:This is good (Score:5, Informative)
True.
But you also have a entry level wage for teenagers do you not. IIRC, this is about 10-12$/hr.
Additionally, you also have some of the strictest immigration policies in the world. You can afford 17/hr when you don't have to worry about millions of people coming over your southern border who don't have much of an education and skills. (along with the government on your southern border is encouraging them to migrate so they don't have to take care of them).
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I'm always amazed that Americans are so poorly paid, and have terrible work conditions
And I'm always amazed that people think the condition of one American is the condition of all Americans. I have it on good authority that there is homeless street person in Berlin. I'm amazed that Germans have no homes and live in the street! Right? Right.
...
What you should be amazed by is that there are subcultures in the US that still haven't figured out that treating school like a chore to be avoided, and one's own children like an annoying stray dog to be left outside do its own devices results in
Re:This is good (Score:5, Insightful)
Instead of blaming it on the "subcultures", blame the greater society in which these subcultures were born.
Why? The "greater society" regularly produces clear-thinking, educated, hard working people for whom minimum wage is a distant memory by the time they're still young but on to their second, better job. The problem actually is constrained to sub-sections of the society. Places where the government spends more per student on education, positions endless arrays of social services, and heaps money in program after program designed to provide the entitled equal outcomes you think should occur. But it doesn't work. Why? Because it's not about how much money is thrown into such programs, or whether the mom and pop store on the corner is suddenly force by the government to pay $15/hour to the kid who comes by for a couple hours a day after school to unload a truck or whatever.
What it's about is what happens when that kid goes home. Do his parents speak English? Do they get involved in his homework? Do they stay away from street crime and other influences that wreck households? Are they giving the kid the huge, proven advantage of having given birth to him in a family that will actually bother to have two parents pooling their time and resources to give the kid a decent start in life?
Should "the greater society" step in and force uninterested, absent parents to spend the 18 years of daily hours needed to raise a productive human being?
Re:there aren't that many high paying wage (Score:5, Interesting)
There aren't that many high paying wage or wage that pay above 15$ an hour and there is already a fierce competition for them.
Companies cannot find enough people with even modest intellectual skills to hire (and retain) for even modestly skilled jobs with much better than minimum wages paid. Hell, there are landscaping companies around here who will pay $20/hour for anyone that will consistently show up to shovel. Costco hires even the most basic, unskilled shelf-stackers for well above minimum wage (closer to $19).
Are you one of those which think the poor are lazy ?
Actually, in many cases that's exactly the problem. But kids born in to families where doing the work needed to become a decent high school graduate is considered unimportant or too much trouble have lazy parents to thank for that - the kids themselves usually don't know better until it's already too late to form decent habits.
You need money for a proper education
No, no you don't. The taxpayers around you will pay for your education through high school. And if you've don't anything even close to working hard, you'll have the academic background needed to get anything from substantial subsidies to full scholarships in higher education. I worked while in college, to have money. Did you?
Frankly your kind of thought are so short sighted , you should get glasses for your brain.
You have no idea where prosperity comes from, apparently.
Re: (Score:3)
For a country that are smart about so many things their social structure is just broken.
You're confusing the structure of the society with the impact of certain cultures within that society.
Robots Unite! (Score:2)
California (Score:3, Insightful)
What would we do without California to try stupid things so the rest of us learn good reasons avoid them?
Comparison (Score:2)
If someone needs some comparison, France's national minimal hourly wage is 9,71 euros, that is 10.7 USD.
This is much lower, but to make a fair comparison, one would have to take expenses into account. The presence of socialized services lower expenses, especially for people at minimum wage that do not pay taxes on their income.
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Yes, and the riots in the streets of Paris combined with debts so bad the EU is rejecting their budgets and forcing them to reduce their spending ought to tell us all we need to know about that brilliant example.
The last, lagging symptom of inflation (Score:4, Insightful)
The government's "basket of goods" used to calculate inflation is blatantly false and misleading, as are its unemployment numbers (look at U3, not the cooked statistics you hear on the news that were called out by Gallup's top guy). Particularly in a state like California where most of the population lives in a few densely-populated areas with horrible traffic and ever-rising rents and house prices, inflation has already greatly impacted individuals. The federal government has already encouraged this by making the FHA loan conforming limit different for high-priced California areas. Between this and speculators buying and sitting on houses as investments, the average slug has zero change of owning a home and struggles even to rent due to the growing techie population.
The difference is that the gap in overinflated places like California has been extended beyond any reasonable means by expansion of debt. It's all about the monthly payment for a good, not the total amount out of your pocket for that good irrespective of repairs and devaluation. Between the large bank failures and the constant pumping of the money supply, it appears that the debtors will win and the savers will lose at the expense of substantial amounts of inflation simply because compensation for productivity has to be based on something somewhat tangible, even if it's intellectual property. That underpinning simply isn't there. This is a giant souffle that will be hardened into place from the top and pull the bottom up with it.
So yes, raise the minimum wage if you will. But those prices will be passed along to consumers. Those in LA and the rest of California and like places should get used to $9-$10 McDonald's meals and $2 cans of soda and $2.50 for a basic pack of gum. Other than austerity and contraction (which may cycle multiple times between inflation before all is said and done), this was the only possible outcome whose chickens appear now to be coming home to roost. Welcome to the new normal, with effectively no consolation for the minimum wage earners.
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Look at U6 if you really want to know the unemployment rate. U3 is the "officail rate" (5.9%) and is about half of what U6 is (11.8%).
Exactly how is that going to help? (Score:4, Insightful)
Hope they manage it as well as illegal immigrate.....err yeah. Hope they manage as well as the electrical grid....oh wait. Hope they manage it as well as the highway system....hmmmmm. Hope they manage it as well as the water supply.......well fuck.
And the winner is ... (Score:5, Insightful)
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My god you people need to think about economics (Score:3)
I'm starting to think that it's by design because every misconception is in favor of 'government' and people being ruled by force.
Watch Tom Woods dispel these myths [youtube.com]
and one more [youtube.com]
Re:My god you people need to think about economics (Score:4, Insightful)
Ok, since you have such a great understanding of economics, please explain to me how it's a good thing that the Walton family has more wealth than 40% of Americans (that's 129 Million Americans) combined, yet pays their full-time workers so little that they can't afford food or a place to live without welfare and foodstamps? How does it help me that my tax dollars have to subsidize Walmart employees (we're not talking about lazy drug addicts, we're talking about hardworking fulltime employees) when the company makes such huge profits? How does it help the economy when those employees can't afford to buy products that other companies manufacture and sell?
Or does it just benefit the 6 Waltons that are on Forbe's list of billionaires?
Re: (Score:3)
I have spent more than a few hours thinking and reading on the subject and so I will attempt to answer your questions. Apologies if they're not great answers. Hey, at least they're honest and a little better than the highly moderated comments here.
Ok, since you have such a great understanding of economics, please explain to me how it's a good thing that the Walton family has more wealth than 40% of Americans (that's 129 Million Americans) combined, yet pays their full-time workers so little that they can't afford food or a place to live without welfare and foodstamps?
I wouldn't say it's good or bad. I think walmart has both good and bad aspects.
Re:My god you people need to think about economics (Score:4, Insightful)
Ok, since you have such a great understanding of economics, please explain to me how it's a good thing that the Walton family has more wealth than 40% of Americans (that's 129 Million Americans) combined, yet pays their full-time workers so little that they can't afford food or a place to live without welfare and foodstamps?
The Waltons wealth did not come from their employees payroll. The Waltons wealth is in shares of the company. The company is worth a lot of money and because the Waltons own a lot of the company that makes them very wealthy.
Your argument seems to be: Owners of a valuable company should sell the company and give the money to the employees. Except who is going to buy the company if they too must then sell it and give the money to the employees?
The reason you made this argument is because you are an ignorant fuck that doesnt understand the difference between wealth and income.
Curious... (Score:5, Interesting)
What happens to those who were making $15/hr or $16/hr? They're likely frequenting places full of minimum wage workers and their costs will now rise - inevitably - to at least some degree because of this. Further, they've all now been reduced to minimum wage (or close thereto) by the stroke of a pen.
Beyond that, how many jobs will now cost enough that automating them starts to make good financial sense? How many people with little to no skills - especially those without a good education who are most in need of steady legal employment - will find that their lack of marketable skills make them not worth hiring at this higher price point?
This is the kind of feel-good thing that bring down the middle class, raises some in the lower class (those lucky enough to ride the wave), and leaves behind large swaths of the most vulnerable people. What's going to happen is that people with little to no marketable skills in surrounding areas will get hired at the state or Federal minimum wage, gain some valuable experience, become more valuable employees, and then move or commute into LA to take jobs from poor, undereducated residents. This is an anti-poor measure masquerading as a hand-up. It will drive the middle class further down the chain (by negatively impacting their purchasing power), reduce the number of available jobs for everyone (and especially for residents), and drive many of the poor right into the ground.
Mark my words, within 5 years of this taking effect, all or nearly all indicators of poverty will worsen in LA.
Missed so far...payroll taxes (Score:5, Insightful)
One item not discussed is how this is a benefit for tax collectors and a much larger hit on employers than just the hourly wage difference. Wages account for about 70% of employers labor costs (http://www.bls.gov/news.release/ecec.nr0.htm).
Consider just payroll taxes. A person making $8/hour working costs their employer $8.61 after the 7.65% FICA taxes ($0.61 goes to the taxman). Raise that wage to $15 and the cost to the employer is $16.15 ($1.15 goes to the taxman).
Then there's additional costs pegged to wages, such as UI insurance "premiums" and workers comp. In California UI insurance has a maximum cost, but runs up to 6.2% on first $7000 of wages before maxing out. In California, employers spend $3.48 in workers comp cost per $100 in wages paid.
Benefits employers paid (vacation, sick days) account for about $2.16 per hour worked on average (about 6.9% of average hourly wage).
Raising the minimum wage entails all those additional costs too, so jumping someone from $8/hr to $15/hr changes the costs to the employer from about $10.40 to about $19.50 (assuming 30% of labor costs are non-wage). It's not a $7 additional cost, but a $9.10 additional cost (of which the majority of the difference goes into the state tax coffers *before* the wages are subjected to the income tax and sales taxes).
what happens at universities? (Score:5, Insightful)
When minimum labor costs get too high for valuable or popular work, we end up with a lot of "volunteers." This happens all the time in science and medicine. In general, minimum wage hasn't had an impact on this (yet). Young scientists understand that working on a high profile project or in a "real world" clinic is good for your career. There's already enough downward pressure on scientific wages to prevent even the most jaded PI from offering a minimum wage position to paid technical staff. That all said, the average (non-graduate, but paid) student lab worker at UCLA makes $14/hr, with a $9/hr minimum. $15/hr is above the minimum salary for graduate researchers on campus. (Not picking on UCLA, their salary info is public and easy to search.)
So, we're getting into territory where minimum wage laws are putting cost pressure on scientific work. Interesting and a bit sad.
Will this even apply to schools? The federal and state governments usually don't apply all labor laws to universities.
I suppose University of Washington has the same issues. It would be nice to think that some of the more bloated administrative budgets would take a haircut to pay the student workers a bit more. It would be very sad if it simply became normal for young scientists to "work" for free their first few years.
Moral consideration (Score:3)
All government laws are ultimately enforced by violence or threat of violence, often referred to as "at gunpoint".
No voluntary, honest, harmless transaction between mentally competent adults should be prohibited by law.
No single person has the right to point a gun at me and say "you must pay him at least $15.00 an hour." A group does not gain new rights by adding members, so no group, howsoever formed, even if it calls itself a government, has the right to point a gun at me and say "you must pay him at least $15.00 an hour."
Minimum wages laws are a moral obscenity, and have no place in a civil society.
Good. (Score:3)
We need more of this around the world. It can't be that people work 3 jobs and barely get by why others buy a new car every year or a new cellphone or whatnot and do no more important stuff than the cleaning lady or the cook. ... And no, shoving around papers or hacking up the next bazillionth Twitter or IRC clone or setting up the next Wordpress installation that's going to be totally abandoned 15 months in is not more imporant than cleaning. Emphasis mine!
If it's not worth paying 15$ it's probably not worth being done by a human in the first place and should be left or automated. And if you're not ready to spend 15$ but insist you have cleaning personell you're an asocial *sshole and ought to clean up your own dirt.
My 3 cents.
Low wage employees have no position of strength (Score:3)
The root of the problem is that low wage employees are often poor negotiators, and are not in a position of strength to begin with. They are easily taken advantage of by explotative employers, and landlords. Some checks and balances need to be in place to protect this class of workers, but there also needs to be incentives for the minimum wage worker to improve thier own marketability in the job market.
The biggest expense for a minimum wage worker is housing.
Just rasing the minimum wage will cause rents to rise as landlords will be in a position of strength. Some areas have rent control which would mitigate this,
but I would expect landlords would increase rents in the low end of the market to capture some of this money.
Minimum wage coupled with rent control might be workable if food and transportation costs are kept marginal.
All of this artifical control will mess with the markets, but markets can't be left to 100% capitalist control. There have to be limits.
Re:Minimum Wage (Score:4, Insightful)
That's almost like saying, "If consuming water is good then drowning to death in it must be better". In short, improvements are generally on a bell curve: there's an optimum level of any given factor. Too much or too little tends to create problems.
Re:Minimum Wage (Score:5, Insightful)
Well, so you're saying that there is an upper limit beyond which a minimum wage becomes harmful. So there must be a mechanism that kicks in that imposes that limit. So, explain what it is.
(While you're at it, also explain why businesses would pay $15/h for a worker who doesn't increase revenue by significantly more than $15 for each hour he works.)
Re:Minimum Wage (Score:4, Interesting)
While you're at it, also explain why businesses would pay $15/h for a worker who doesn't increase revenue by significantly more than $15 for each hour he works.
Work is fungible. Perhaps you had said worker hammering roofing nails manually and after the wage increase you decide to buy a nail gun to increase their productivity. In fact historically union shops have lead the way in increases in productivity for exactly this reason. This is well documented.
Re:Minimum Wage (Score:5, Interesting)
(While you're at it, also explain why businesses would pay $15/h for a worker who doesn't increase revenue by significantly more than $15 for each hour he works.)
If your business requires paying wages that are so low that your workers can't make a living and to survive are still welfare and foodstamps (that my tax dollars pay for) despite working full time then your business plan is broken.
Or in many cases, the worker does increase the company's revenue by by more than $15 for each hour he/she works but they pay them less and pocket the difference (e.g. Walmart and other big box stores) and by paying lower wages and making other taxpayers make up the difference the owners of the company just get richer. That's why the Walton family has more wealth than 40% of Americans combined (that's 129 MILLION Americans). We're talking about a company whose executives take separate private jets to the same meeting just for fun to see who can get there faster. A company whose chairman (Sam Walton's oldest son) is only in the office a few times a month, and spends the rest of his time taking his private jet from his home in the Colorado mountains to go cycling in France, or hunting geese in Canada, or bio-safaris in South America, yet pays his workers so little that even though they work full time they can't afford rent and food. Are you still going to tell me that company can't afford to pay its workers a wage they can live off of?
Re:Minimum Wage (Score:4, Insightful)
If your business requires paying wages that are so low that your workers can't make a living and to survive are still welfare and foodstamps (that my tax dollars pay for) despite working full time then your business plan is broken.
You assume those are the only two options...
Lets say the min wage was raised to $30/hr tomorrow...
Does this mean McDonald's is screwed? Does this mean that all current McDonald's workers get a GREAT PAY RAISE?
No, of course not... It suddenly would make sense to completely automate a McDonald's restaurant, you'd have one or two $30/hr managers and the rest would be robots.
Yes, yes, you say that people would be needed to service and maintain the robots. Yes, but most of the people losing their jobs aren't remotely qualified for that job and you won't need a million of them.
---
I challenge you to look up the number of people who work in fast food in this country, imagine if half of them lost their jobs to robots tomorrow.
What would they all do?
Re:Minimum Wage (Score:5, Insightful)
Because the manager knows that if he fires that worker, he shrinks his own little empire by one worker?
Spoken like who has NEVER actually had an employee. Every small business owner I know hates having employees.
Employees add stress. The only reason a business hires people is because they either can't do it all on their own or
because employees make them more money than they cost. That spread doesn't have to be much. If you have 20
employees and each employee makes you $1/hour more than you pay them then assuming you are working yourself
you are doing pretty good. Now, if minimum wage jumps by $5 per hour then that $1 per hour profit is gone and you
either charge more or you fire that employee and figure out how to do it without. I've met many a small business
owners who have talked about getting rid of their employees and turning away work just because the amount of extra
money an employee brings in is barely worth the headache of having ermployees. A massive wage hike would
make that a lot easier. One such company that did just that was Churchill Trucklines from a town near me. The
workers went on strike and demanded more money and the owner said screw it I don't need this headache and
layed off all 2000 employees.
Re:Minimum Wage (Score:5, Insightful)
I am an employer and I actually like my employees a lot. They are smart, they work hard, coming to the office every day is basically a joy. I try to make their life as easy and as productive as possible, and I pay them as much as I can. They know this, and this works pretty well.
I believe that if every employer actually saw their employees as human beings who are doing the best they can, and treat them accordingly, the world would be a much better place.
Re:Minimum Wage (Score:4, Informative)
The ignorance of this one is strong.
Sorry bud, but the Unions had literally zero to do with Hostess problems.
1) Hostess had been on the verge of bankruptcy multiple times prior to them going under.
2) More importantly, the Unions had already taken multiple paycuts to keep the company afloat.
It wasn't till the management asked for another paycut and got it only to vote themselves a 300% pay RAISE that the Unions refused another paycut as the management had shown their hand and their intentions of just bleeding the company dry instead of working to keep it going.
Hostess Unions actually helped that company, it was systemic failure of management over the course of years over years that killed Hostess.
Re:Minimum Wage (Score:4, Interesting)
> We're trying to optimize something in a very complex system
Yes! You're starting out well.
> If I'm running a business, and my payroll increases 30% while sales remain flat, I have two options: 1) slow or stop hiring, cut staff, or even go out of business;
Aaaaand... you crashed into the water. Raising wages increases productivity, demonstrably so: http://www.raisetheminimumwage... [raisetheminimumwage.com]
Of course, as said, this only 'works' if the wage was abysmally low to begin with (which is true in this case). If you're already paying your workers $100/hr, paying them $200/hr is likely not to do much, but going from $5/hr to $10/hr is going to do a lot.
There are many reasons for this. Low-paid workers often lose productivity due to working multiple jobs or making non-optimal life decisions to save money. Employee theft and misbehavior goes down. Job satisfaction (and the resulting increase in productivity) goes up. There are a lot of other positive effects.
> I think it will largely end up being a feel-good measure that well-off, well-meaning people can use to congratulate themselves about
I actually agree with you a little bit here. But that's life.
Re: Minimum Wage (Score:5, Informative)
So the mistake your side makes is misunderstanding that at every incremental raise of the min wage, jobs are lost. It doesn't matter that workers have more money to spend, unless that increase in volume leads to inflation of prices, this resulting in Sally's output being worth $14+ from inflation. But your side insists min wage increases do not cause inflation and only lead to higher demand (volume). If volume demanded increases without inflation, that actually has no impact because Sally's company will not produce more units at negative margin. In fact Sally's company will produce less than before the increase in demand.
And if it does lead to inflation, Sally may not get canned, but that is a regressive cost that will hurt many lower wage workers and definitely the unemployed, whose benefits are not indexed to local inflation.
http://www.seattletimes.com/se... [seattletimes.com]
http://www.cepr.net/blogs/cepr... [cepr.net]
Re: (Score:2)
If you really believe paying slave wages will make us all wealthy, you go first, ask for that pay cut now!
Re: (Score:3, Insightful)
Some of us can perform work that is work $100 an hour or more. Some people cannot perform any task worth even $5 an hour. Life is unfair.
Re:Minimum Wage (Score:5, Insightful)
Real jobs don't pay minimum wage. Where I live one can survive on twelve dollars an hour. It's not fun but you can get by and even have cable tv. I'm glad to see LA jack up the minimum wage and I hope all those other cities in Cali do the same. It'll help solve the water shortage problem there as jobs migrate away from the state and the people follow. I occasionally watch some of these real estate shows that have people choosing from between different houses in places like LA and San Francisco and am blown away by the real estate prices there. For what you can buy here for less than 100 grand it often will cost half a million or more there. My electric bill here runs about $100 to $300 dollars depending on the season, a months water bill (including trash pickup) is usually around $30. The mortgage on my 3 bedroom 2000 square foot house is $590 including taxes and insurance. A dollar here is not equal to a dollar in LA.
Yeah, you can survive (Score:3)
Oh, and Jobs won't migrate away. This is the first thing everyone who perpetuates the race to the bottom (tm) likes to quote. It doesn't happen because California is a _nice_ place to live and the rich like having services. But don't take my word for it, go look at Kansas' unemployment. It's twice the national average after all their "free market" reforms.
Re:Minimum Wage (Score:4, Insightful)
I'm saying it's crazy to pay someone 15 dollars an hour to ask someone if they want fries with their Big Mac. Kids hold most minimum wage jobs. People start at the bottom. If you're 50 years old and you're still slinging fries and soda pop then you're just not trying. The fucking deboners at the local chicken processing plant down the road where I live make 4 dollars over minimum wage. The guy changing tires at walmart does too. Minimum wage jobs are not meant for kids or people that have zero motivation. Hell, my lawn guy makes more fucking money than I do and most of it's tax free. My daughter straight out of high school got a job at Lowes making 50 cents over minimum wage. After two months they gave here a 2 dollar raise. She left there after 6 months more and got a job at Frito Lay putting chips in a box. Stuffing boxes with chips now for nearly 15 dollars an hour and that was back in 2002. I made almost twice that but I was in my 40's then and she had much better benefits. I don't really care if they jack the minimum wage up though as I've seen it done so many times over the years. Neither side's predictions come true. The people that say it'll make things better are wrong and the people screaming it'll destroy the economy are wrong. It always balances out after a little while.
Re:Minimum Wage (Score:5, Interesting)
In a sense, minimum wage is just a best effort to re-balance the market distortion introduced by the social safety net. Were there no net, people being paid less than it costs to live would be forced to quit either because their health would decline from the privation or because they would be too busy dealing drugs and robbing people to show up for work. Then wages would go up to bring people in who won't quit, go to jail, or die or the business would fold up and go away.
Since we find high crime, shanty towns, and riots undesirable, we introduced the social safety net. A side effect is that it becomes possible to capture people in a situation where they are paid less than it costs to live and the taxpayers get stuck for the rest. The minimum wage seeks to patch that up to the extent possible.
The sad reality is that people were forced to accept minimum wage jobs in the big crash and many are still stuck there because Wall Street recovered a hell of a lot faster than Main Street.
Re:Minimum Wage (Score:4, Informative)
The real minimum wage is always 0. I work in Seattle, where they recently did this. Entry level places where I live (not in Seattle), where the minimum wage is $10/hour, all have help wanted signs out. In downtown Seattle, however there was a wave of restaurant closings, and I don't see help wanted signs anywhere. Could be other causes for the difference, of course, maybe it's something else - but it's not a promising sign for teens looking for that first job.
Re:Minimum Wage (Score:5, Informative)
You know, when that story aired on Fox News, some people have actually went and asked the owners of those closing restaurants whether it's due to the minimum wage. And they have only found one place where that was a factor - and even that one has, ironically, not been in the original report.
At the same time, several new restaurants have opened, or are still planning to open, in the same timeframe.
http://www.forbes.com/sites/ri... [forbes.com]
Re:Minimum Wage (Score:5, Insightful)
what about those who are making 15 an hour now??? or those making 15.50??? will they get a raise??? or has their job that they worked hard for to get the pay they are getting now be considered a minimum wage job? While this *might* help the poorest of the poor (in reality those jobs will disappear) it hurts those who DID work hard to get above the bottom. That is unless they will be getting the same percentage raise as those making min wage now that is
somehow I think this is going to do nothing but devalue jobs in the 15-20$ range
Re:Minimum Wage (Score:4, Informative)
In order to pay the McDonald's worker $15.00 an hour, they will have to basically double all of their prices.
hilarious
" In general, McDonald’s franchisees pay about 20 percent in labor costs, according to Richard Adams, a consultant out of San Diego who works with McDonald’s operators."
"Thus, doubling those salaries would push that Big Mac cost up 80 cents."
Re: (Score:3)
Re: (Score:3, Funny)
If you really believe that a minimum wage can increase the welfare of poor people, why not raise it to $500/hour? Then we can all be rich!
Silly lad.
That's like saying that if the minimum wage is too high, and it hurts employers, we should just not pay anyone anything at all. and we'd all be wealthy
But let's get back to reality for a second. One of th ebaxtoipnzs of right thinking, God fearing economic rightness, Walmart (genuflect) Who just happens to be the largest employer in the country http://www.usatoday.com/story/... [usatoday.com]
http://www.goodjobsfirst.org/c... [goodjobsfirst.org]
looky who's on medicaid!
While we are at it: http://www.bloombergview.com/a... [bloombergview.com]
Re:Wrong answer to the wrong question (Score:4, Insightful)
Re:Wrong answer to the wrong question (Score:5, Informative)
There have historically been two problems for achieving this, that are somewhat intertwined. One, where does the money come from, and two, what happens if too many people decide not to work. As technology advances though, both of these are going to become increasingly solvable as we replace human labor with automation/robotics as the primary source of production. Put another way, if robots do all the work, we're not worried that any number of humans aren't working, because the small number we need will be easily found in those who find it rewarding. As for how you pay for it, you take a portion of the money that each robot's activity earns, and use that to pay everyone, since we'll need people who can buy what the robots make. Market economies require demand as well as supply, after all.
Re: (Score:3, Informative)
people need a minimum amount of money to live. if they are paid less, then they need public assistance. for example walmart employees who qualify for food stamps.
lower wages mean that employees will need more and more public assistance to feed and house their families.
you are a socialist if you don't believe in minimum wage, because you want the government to fund worker's pay.
Re: (Score:2)
They made a movie about that. It was pretty popular.
Re: (Score:2)
Just wait until businesses start laying off people to cover the cost of the new $15/hr.
got any data to go with your whine?
Re: (Score:3)
meanwhile the government keeps paying for the meals of walmart employees
Maybe, if it stopped, Walmart would have to pay their employees enough to eat.
Just a thought.
Re: (Score:3, Insightful)
You're right, let's get ahead of the game now and make the minimum wage in LA $1,000/hr. Better yet, do it at the Federal level.
That should solve all the problems, right? Everyone will be rich!
Why was this modded insightful ? (Score:3)
You're right, let's get ahead of the game now and make the minimum wage in LA $1,000/hr. Better yet, do it at the Federal level
You see often cited as conservative/republican mouth point. But this is an utter stupid viewpoint - why it is modded as insightful is beyond me. Interesting maybe at most.
The reason why this is stupid is as follow : when you rise minimum wage you rise slightly the living of people but you also partially rise inflation. Rise too much and the inflation will eat most of it. So the economic of it is to rise only slightly and try to minimize inflation. Rise it to 1000$ or 100000000$ and you got hyper inflation
Re: (Score:3, Insightful)
Bullshit article...
The minimum wage for Seattle isn't $15, it's $10 or $11.
It won't be $15 for several more years (between 2017 to 2021 depending on various thing like size of the company, type of compensation, medical benefits, etc.).
Source: http://murray.seattle.gov/minimumwage/ [seattle.gov]