psionl0
Skeptical about skeptics
You seem to be assuming that businesses would not experience an increased demand due to the greater spending power of the minimum wage workers.
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Four US states vote to raise minimum wages -- what will the effect be?
- Thread starter Puppycow
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- minimum wage unemployment
Segnosaur
Penultimate Amazing
The problem is, money used to pay the increased wages is not created out of thin air, and has to come from somewhere. That means either:
- Increased prices for products involving minimum wage labor, which reduces the spending power of non-minimum wage labor.
- Decreased profits for owners (some of whom could be wealthy, others could be small-time investors with a few shares in their retirement portfolio), which reduces the purchasing power for the owners
(There is also the possibility that jobs will be cut, which also reduces the spending power of those affected by the cuts. However, I am assuming you are suggesting increased spending power will somehow prevent that.)
I was in Japan last year and in some of the smaller "cozy" restaurants, the staff that took orders was a machine. It was just like a regular menu so the customers jus push buttons to indicate what you want. After you confirm your order, you insert cash or credit card and the machine gives you a ticket stub with your order. You hand it to the cook and he prepares your order.
I can see this type of technology coming as a way for employers to avoid having to pay $15 an hour for entry level workers. The machines don't call in sick or complain about working overtime either.
I think the wage increase may have unintended consequences. Yes a better wage but a lot more people without jobs.
I can see this type of technology coming as a way for employers to avoid having to pay $15 an hour for entry level workers. The machines don't call in sick or complain about working overtime either.
I think the wage increase may have unintended consequences. Yes a better wage but a lot more people without jobs.
Segnosaur
Penultimate Amazing
They have something like that at McDonald's now....
Computer screens where you can enter your order, and either pay for it through the machine, or go to a cashier.
http://www.businessinsider.com/what-self-serve-kiosks-at-mcdonalds-mean-for-cashiers-2015-8
psionl0
Skeptical about skeptics
Shhhhh! Don't tell the Fed that. They think they have just spent years doing something called "Quantitative Easing".
I don't see how either of those conclusion follow from what you believe is a fixed money supply.
There obviously has to be some optimum level of wages. Too low and businesses can't sell their products and if wages are too high then businesses can't afford to make their products.
psionl0
Skeptical about skeptics
I find it hard to believe that the cost of using a machine is so comparable to that of employing a worker that a couple of dollars would make a huge difference.
Segnosaur
Penultimate Amazing
Well, where do you think the money is going to come from to pay the extra wages?
Remember, we're talking about more than just "a couple of dollars". If your business is open 16 hours/day, 365 days a year, and you're paying workers a $10/hour minimum wage, that's over $58k a year in wages just to staff one position. Increase the minimum wage to $15, and you increase wage costs by $29k. Plus, you're talking about not only the individual's salary, but things like: the cost of training (if a person quits and doesn't have to be replaced because you now have a machine to do their job, that could be several days worth of wages right there), payroll taxes, any insurance that your company is responsible for, etc.
For some companies and some positions, the $29+ thousand increase that would result from a minimum wage increase to $15 might be enough to make the company consider automating the position.
psionl0
Skeptical about skeptics
You haven't been paying attention.
That's a mighty big incentive to replace the workers with machines already. Of course, it won't happen until the capital, training and running costs of the machine are significantly less than that of a worker.
Agreed.
Well on that basis, my city, where the minimum wage for hospitality and retail workers is close to $20 an hour, and far more on weekends, should be imploding.
Oops:
https://www.premier.vic.gov.au/melbournes-retail-and-hospitality-sectors-booming/
Not a robot in sight.
Funnily enough, people here are happy to pay for decent service, and accept that minimum wage workers should have a living wage.
Brainster
Penultimate Amazing
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We keep hearing that this increase is necessary for them to live; now you're telling me it's going to provide extra spending money?
psionl0
Skeptical about skeptics
That is such a silly answer that I am tempted to respond, "no they will hoard the extra money".
How can they use the wage increase to live if they aren't spending it?
How many hours are you making this person work? At 40 hours per week a $10 wage comes out to 2080 X 10. That's what "staffing one position" means to me. How are you getting $58K?
Go ahead, call me stupid. I'm not a business owner, but I did work full time from college graduation until retirement. If I should have been paid almost 3 times as much, I wish I'd known.
theprestige
Penultimate Amazing
The forum MA prohibits me from calling you stupid, so I'll simply suggest that you reread that post carefully for comprehension.
Hint: If you were to work 16 hour shifts, at overtime wages, it would cost your employer a lot more than $58k.
psionl0
Skeptical about skeptics
ftfy
Alternatively you could have just pointed out that a position doesn't need to be staffed by just one person working a 16 hour day.
wareyin
Penultimate Amazing
When Segnosaur wrote "staff one position", they did not mean "one staff person". 16*$10*365=$58,400.
In all actuality, at least 3 people would be getting some of that $58,400.
Clearly they're going to put the money into their furnace and burn it for warmth.
You give a poor person money and they will spend it. You give a poor person millions of dollars of lottery winnings and they spend it in a couple decades. The money all goes right back to the employers, and since labor is never 100% of expenses, that increased revenue means increased profit margins. Everyone benefits, it just takes a little longer for the money to siphon up to the top.
theprestige
Penultimate Amazing
I liked my formulation better.
That didn't seem to be the kind of answer Whatfor was looking for. Besides, he explicitly asked to be called stupid. I honored his request as closely as civility and the MA permit.
psionl0
Skeptical about skeptics
As long as you don't think that your answer makes you appear clever.
theprestige
Penultimate Amazing
This is the hill you're fighting for? Really?
3point14
Pi
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- Nov 4, 2005
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- 23,209
Can I just check what the difference is between worrying about the poor making too much and worrying about the rich making too much? It seems, and this may be confirmation bias and lousy sampling on my part, that those who posit that it's nobodies business what the very rich earn because it's a zero sum game are also those most concerned with the poor earning too much.