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The Almighty Buck Government

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."
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Los Angeles Raises Minimum Wage To $15 an Hour

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  • by scottbomb ( 1290580 ) on Tuesday May 19, 2015 @08:19PM (#49731041) Journal

    Is Slashdot TRYING to lose readers? I thought this was a TECH forum.

    • by Daimanta ( 1140543 ) on Tuesday May 19, 2015 @08:23PM (#49731081) Journal

      Well, some people who earn less than $15 work in tech companies. That's a tech angle, right? /s

    • Los Angeles Raises Minimum Wage: 38 comments threshold 4 or higher.
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      AMD Details High Bandwidth Memory (HBM) DRAM: 2 comments threshold 4 or higher.
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      You thought wrong.
  • Stupid reasoning. (Score:4, Insightful)

    by CRC'99 ( 96526 ) on Tuesday May 19, 2015 @08:20PM (#49731055) Homepage

    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?

    • by mattventura ( 1408229 ) on Tuesday May 19, 2015 @08:45PM (#49731269) Homepage
      Two important things to consider:
      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.
    • by Ol Olsoc ( 1175323 ) on Tuesday May 19, 2015 @09:05PM (#49731457)

      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.

    • by tompaulco ( 629533 ) on Tuesday May 19, 2015 @09:33PM (#49731749) Homepage Journal

      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.

    • by tsotha ( 720379 ) on Tuesday May 19, 2015 @11:03PM (#49732521)

      I love seeing this crap in American articles. "Oh Noes! If we pay people more, it will cost businesses more!"

      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.

  • Hmm... (Score:2, Insightful)

    by Loopy ( 41728 )

    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?

    • by sjames ( 1099 )

      So you like paying taxes to subsidize corporate payroll?

    • Re:Hmm... (Score:5, Informative)

      by PAjamian ( 679137 ) on Tuesday May 19, 2015 @08:30PM (#49731131)

      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)

        by BarbaraHudson ( 3785311 ) <barbarahudsonNO@SPAMgmail.com> on Tuesday May 19, 2015 @08:40PM (#49731231) Journal
        And the poor are more likely to put pretty much all their income back into the economy in their day-to-day living, whereas the rich don't.
    • but they don't think everything else will just inflate along with it?

      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

    • 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.

  • This is good (Score:5, Interesting)

    by labnet ( 457441 ) on Tuesday May 19, 2015 @08:25PM (#49731101)

    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.

    • true, but the cost of a chevy (holden to you) down there is about 2x what it costs here. so yeah, you are making more but your costs are higher so what is the difference?
    • Re:This is good (Score:5, Informative)

      by JDAustin ( 468180 ) on Tuesday May 19, 2015 @09:50PM (#49731935)

      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).

  • $15 per hour is Galdwell's tipping point.
  • California (Score:3, Insightful)

    by Anonymous Coward on Tuesday May 19, 2015 @08:38PM (#49731211)

    What would we do without California to try stupid things so the rest of us learn good reasons avoid them?

  • 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.

    • 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.

  • by StandardCell ( 589682 ) on Tuesday May 19, 2015 @09:05PM (#49731465)
    I'm normally pretty libertarian when it comes to issues like this, but it doesn't surprise me especially in a state like California where the cost of most things has become overinflated. Wages are typically the last thing to rise...but something is different here...

    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.
    • by mpercy ( 1085347 )

      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%).

  • by Charcharodon ( 611187 ) on Tuesday May 19, 2015 @09:21PM (#49731625)
    At 3-5% annual inflation (gov't printing money) that'll eat a big chunk of that by 2020, and don't forget if you work in LA you get slaughtered by taxes in California. You'd been better off sticking with the old minimum wage welfare. Congrats morons, you just gave the government an excuse to take even more of your money.

    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.

  • by thrillseeker ( 518224 ) on Tuesday May 19, 2015 @09:45PM (#49731875)
    Texas.
  • There are not many subjects on earth as poorly understood as economics.

    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]

    • by NoKaOi ( 1415755 ) on Tuesday May 19, 2015 @10:38PM (#49732291)

      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?

      • by 7-Vodka ( 195504 )
        How much I've forgotten about economics is... well not that much because I'm not even that edumacated about economics.

        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.

        • good: it seems to be efficiently run
        • bad: it treats it's worker
      • by Rockoon ( 1252108 ) on Wednesday May 20, 2015 @12:55AM (#49733095)

        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)

    by Loki_1929 ( 550940 ) on Tuesday May 19, 2015 @09:58PM (#49731983) Journal

    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.

  • by mpercy ( 1085347 ) on Tuesday May 19, 2015 @10:07PM (#49732053)

    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).

  • by Goldsmith ( 561202 ) on Tuesday May 19, 2015 @10:25PM (#49732213)

    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.

  • by ChrisMaple ( 607946 ) on Tuesday May 19, 2015 @11:41PM (#49732713)

    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.

  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Wednesday May 20, 2015 @06:05AM (#49734143)

    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.

  • by hwstar ( 35834 ) on Wednesday May 20, 2015 @01:01PM (#49737157)

    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.

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