$9/h minimum wage

[lionking]

In Australia about 15% of wage earners earn minimum wage, nearly triple the US rate. I wonder if some higher-skilled minimum and near-minimum wage workers are paid less in order to subsidize the pay of the less-skilled minimum wage workers?

I strongly suspect you cherry picked stats, and I will check them more thoroughly. This one, however, is completely inaccurate. Firstly, it's a guesstimate. Secondly it deals with wages only. You did realise a great many Australians are on salary, not wages, didn't you?

But to your other point, if only 5% of US workers are on the minimum wage (and I will check), what's the problem with raising it?

 

[Tsukasa Buddha]

Another good reason to say no to the wage increase is inflation. How much longer until after the increase of the wage does inflation negate that increase? How many times must the wage increase because of inflation before we tackle the actual source of the problem?

Actually, I'd be one to argue that more inflation would be good for our economy .

I'll have a better reply tomorrow.

 

[Mudcat]

Actually, I'd be one to argue that more inflation would be good for our economy .

I'll have a better reply tomorrow.

I'm looking forward to it, I already learned a lot from this thread.

 

[Skeptic Ginger]

Who needs spoon feeding or hand holding here? Isn't it normal to want to know why your fortune has turn sour at the same time the minimum wage went up?

What evidence supports this claim?

The spoon feeding refers to thread posters claiming no evidence was posted.

Lovely, except I'm not a right winger.

And?

Another good reason to say no to the wage increase is inflation. How much longer until after the increase of the wage does inflation negate that increase? How many times must the wage increase because of inflation before we tackle the actual source of the problem?

You got nothing here, inflation is not a current problem, but low wages are because the problem is demand, not supply.

 

[Mudcat]

You got nothing here, inflation is not a current problem, but low wages are because the problem is demand, not supply.

Have the prices not gone up in the past few years? If not then why the push for a new wage increase? If rising prices are what's driving the need for higher wages than the obvious problem is the higher prices then why push for higher wages when the prices are just going to get higher? Why not tackle the higher prices?

 

[Nessie]

As much as I love the idea of increasing the minimum, I'm not convinced that this really will help.

I imagine many businesses will just jettison a position or two to make up the payroll difference. Now we have a higher min wage, but less jobs.

Or, employers simply cut back hours. No more 40 hours, you get 35 max. Less time at work, sure, but you're still in the same wage boat.

Plus, with the new ACA coming up, some employers are already cutting back full time hours so they don't have to offer employees health care. Which means the ACA is going to get loaded. Which means more tax dollars to cover that cost.

Don't get me wrong, I'd like to see more people working and living comfortably through their wages...but I got a bad feeling about this.

Thats why you can't just raise the minimum wage and leave it there. At the same time you should reduce any top up benefits on the wage and then reduce the tax the employer pays.

 

[daenku32]

If the businesses "can't make it", maybe they should try paying their higher-ups less.

 

[BobTheCoward]

I strongly suspect you cherry picked stats, and I will check them more thoroughly. This one, however, is completely inaccurate. Firstly, it's a guesstimate. Secondly it deals with wages only. You did realise a great many Australians are on salary, not wages, didn't you?

But to your other point, if only 5% of US workers are on the minimum wage (and I will check), what's the problem with raising it?

I think its about 3%. 25% of those people are under 20. Another 25% are 20-24. It is the strongest argument that raising it a little is meaningless (though it is all agreed that raising it a lot would be a problem)

 

[Skeptic Ginger]

Have the prices not gone up in the past few years? If not then why the push for a new wage increase? If rising prices are what's driving the need for higher wages than the obvious problem is the higher prices then why push for higher wages when the prices are just going to get higher? Why not tackle the higher prices?

Your argument is based on an unsupported premise, that giving the poorest workers a living wage drives inflation.

Not to mention your "past few years" time frame. Minimum wage has fallen behind inflation over more than 4 decades. See graph 2, mid page

Not to mention how problematic it is to keep paying people less than they need to live just so your bread will be cheap.

As for 'tackling higher prices', just how do you propose to do that? Stifle demand even more?

 

[Nessie]

If the businesses "can't make it", maybe they should try paying their higher-ups less.

There is that. Too many failed businesses, the banks being a prime example of such, in the UK Rover being another, in the USA Enron being another, means that the directors leave with tons of money and the workers leave with a box with their own bits and pieces from their desk.

 

[WildCat]

I strongly suspect you cherry picked stats, and I will check them more thoroughly. This one, however, is completely inaccurate. Firstly, it's a guesstimate. Secondly it deals with wages only. You did realise a great many Australians are on salary, not wages, didn't you?

Yes, that's why I also noted both percentage of total US workers (salary and wage earners) on minimum wage and also the percentage of US wage earners (wages only) on minimum wage.

Why do you say your own government has the figures wrong?

But to your other point, if only 5% of US workers are on the minimum wage (and I will check), what's the problem with raising it?

That's 5% of wage earners, not all workers.

I've already mentioned many problems with raisiong minimum wage in an effort to boost the standard of living. Why don't you respond to those rather than asking me to restate them?

 

[The Don]

But to your other point, if only 5% of US workers are on the minimum wage (and I will check), what's the problem with raising it?

I think the argument against it is that it creates wage inflation because people want their pay differentials maintained (or even increased) so...

The guy on minimum wage now gets $9/hr.....
.. the guy who was on $9/hr wants $10/hr because he still wants to be paid more than minimum wage...
.. the guy who was on $10/hr wants $11.50/hr because he still wants to be paid more than the guy who used to be paid $9/hr...

and so on until

...the guy charge of the company who was earning eleventy gajillion dollars now gets twelvety gajillion.

As a result of everyone getting paid more, retailers see an opportunity to claw back some of that margin they have lost during the recession and up their prices. Unfortunately this tips the minimum wage earners back into poverty.


At least that's how the argument against raising the minimum wage goes.

 

[lobosrul]

I think the argument against it is that it creates wage inflation because people want their pay differentials maintained (or even increased) so...

The guy on minimum wage now gets $9/hr.....
.. the guy who was on $9/hr wants $10/hr because he still wants to be paid more than minimum wage...
.. the guy who was on $10/hr wants $11.50/hr because he still wants to be paid more than the guy who used to be paid $9/hr...

and so on until

...the guy charge of the company who was earning eleventy gajillion dollars now gets twelvety gajillion.

As a result of everyone getting paid more, retailers see an opportunity to claw back some of that margin they have lost during the recession and up their prices. Unfortunately this tips the minimum wage earners back into poverty.


At least that's how the argument against raising the minimum wage goes.

In the real corporate world, especially during times of high unemployment:

The guy making minimum now gets $9/hr. The guy making $9/hr now wants $10/hr; he gets a raise to $9.10/hr. About every 10th low wage employee is laid off, and everyone else told to "pick up the slack".

In all seriousness, I think the minimum wage is too low, but going to $9/hr at once is too big of a jump.

 

[Nessie]

I think the argument against it is that it creates wage inflation because people want their pay differentials maintained (or even increased) so...

The guy on minimum wage now gets $9/hr.....
.. the guy who was on $9/hr wants $10/hr because he still wants to be paid more than minimum wage...
.. the guy who was on $10/hr wants $11.50/hr because he still wants to be paid more than the guy who used to be paid $9/hr...

and so on until

...the guy charge of the company who was earning eleventy gajillion dollars now gets twelvety gajillion.

As a result of everyone getting paid more, retailers see an opportunity to claw back some of that margin they have lost during the recession and up their prices. Unfortunately this tips the minimum wage earners back into poverty.


At least that's how the argument against raising the minimum wage goes.

I would like to see a situation where the owner earns ten gajillion whilst those working for him or her get that little bit extra. Happier more satisfied societies are those where there is less of a division between the haves and have nots.

 

[DrDave]

I would like to see a situation where the owner earns ten gajillion whilst those working for him or her get that little bit extra. Happier more satisfied societies are those where there is less of a division between the haves and have nots.

Then create your own company and do that.

 

[Nessie]

Then create your own company and do that.

I will.

Another thing I would like to see is no work contract is allowed which means that person cannot be dismissed without having to give them lots of money as a golden goodbye or pay off. If you are incompetent, you should be sacked, get your wages to that day, pension contributions back and that is it.

 

[The Don]

I would like to see a situation where the owner earns ten gajillion whilst those working for him or her get that little bit extra. Happier more satisfied societies are those where there is less of a division between the haves and have nots.

But is cause or effect ? Are societies happier and more satisfied because they have an ethos that makes it unacceptable for bosses to enrich themselves at the cost of their workers ?

Historically in the UK there are cases of employers who are passionate about their workers' welfare (Quakers like Cadbury and fry spring to mind) but overall we're more like the US where it's "get rich quickly". This does seem to encourage entrepreneurship but there are also clear drawbacks.

There are good employers out there but they are few and far between.

 

[Nessie]

I look to the Nordic nations with their smaller inequality and higher happiness as an example. I am sure they rate as the best places to live because they have a system which has entrepreneurship that does not mean workers have to be low paid with few rights.

 

[Sabretooth]

But, mathematically, it has the potential to hurt a small company.

If I had a business, and I'm paying 5 full-time 40 hour employees the current minimum, my payroll is $1,450 per week.

With a $9/min, that jumps to $1,800.

$350 extra per week. That's more than hiring a 6th full-timer at the current minimum.

Again, if it were me, my small business is going to make changes. I might choose one or more of the following options:

- Reduce the hours of 2, 3, or all my employees.
- Layoff one employee altogether.
- Raise prices of my merchandise/services.
- Reduce hours of operation.

So what are the consequences of these choices?:

- Reducing the employee hours saves me money, but it still keeps them in the same "poverty" pay scale.
- Reducing staff to 4 instead of 5 saves me money, but increases the workload of others. If other small businesses in the area do the same, now we have less jobs in the area.
- Raising prices might help in the interim, but eventually, we are going to end up in the same damn boat. People make more, but the prices of items go up, so where's the benefit?
- Reducing hours of operation may help offset wage cost with reduced overhead cost, but I have to hope my clientele can fit into my new hours.

I saw this happen first hand back when the min went from $4.25 to $4.75. I was working as a manager for a local chain of car maintenance shops back then. Company wide, we had 96 employees. When the increase came, each shop had to reduce staff by 1 or 2 people. When the change took effect, we had 79 employees company wide.

I don't think min wage should go any higher than it is now. Thing is, when I made minimum wage, I worked that much harder to get out of a minimum wage job.

 

[Nessie]

As I said, I would raise the minimum wage as I reduced company tax to offset that as benefits drop.

I think society as a whole benefits from having as few as possible on benefits, especially complicated top ups to wages that act as a trap.