Kerry on Minimum wage

[merphie]

Do you ever see a Taco Bell that ISNT hiring? Strange, the min wage keeps going up AND STILL they put applications on the placemats.

How can this be Proffessor Economics?

I also worked for Taco Bell during and after the last minimum wage hike. Taco Bell increased it's prices shortly afterwards. For what reasons exactly I don't know.

 

[mortimer]

Right. Cause T-Bell has it down pat on the # of employees needed at one time to get the job done. If you lowered the min-wage they wouldnt hire more people to just stand around. takes 5 people to do the job then they will use 5.

You you reverse the situation and lowered the min wage would it make turnover less??? Improve the T-Bell experience??

I don't think they're too concerned about the "T-Bell experience".

They'd have to raise their wages pretty dramatically to significantly reduce turnover... I gather it's not real fun to work there no matter how much one is paid. In my town, fast food employees are paid upwards of $7-8 starting wage and the turnover is still very high.

 

[Tmy]

I also worked for Taco Bell during and after the last minimum wage hike. Taco Bell increased it's prices shortly afterwards. For what reasons exactly I don't know.

Well the cost of oil has dramatically increased.


Th problem with a thread like this is that its so easy to throw out simple econ basics to support your view BUT the econ situation is hardly simple. THere are so many factors that affect the economy. A simple taco supply/demand chart wont explain the situation.

 

[Tmy]

By the way, I now have that Southpark song by Cartman's J-lo handpuppet "Taco flavored kisses" stuck in my head now.

DAMN YOU MERPHIE!!!


"Ill fullfill all your sexy wishes, Give you lots of taco flavored kisseeeeeeees"

 

[BPSCG]

If a company is making a profit, then the work performed by the employee is more valuable than the wages paid to the employee.

(...snip...)

What the minimum wage says is that you are not allowed to make a profit off of someone else's labor, unless you are willing to pay that person enough for him to live decently.

(...snip...)

So, is $5.15 per hour a "decent" wage. (Is that the minimum these days?) If not, it should go up.

Thoughtful post, food for good debate (...mmm... food...)

Some questions:

1) Why should there be a national minimum wage? Five bucks and change may enable someone to scrape by in West-By-Godforsaken-Virginia, but it's not enough to enable you to live in a cardboard box in the northern part of The Real Virginia. What possible rationale can there be for a one-size-fits-all minimum wage?

2) I would argue with your first point above. If a company makes a profit, then the work performed by all the employees is more valuable than the wages paid to the all the employees. But we all know that the value of individual employees' work varies wildly; that's why some employees get paid more. What should an employee be paid if his services are worth less than the minimum wage?

Labor is a cost of doing business. If a company's utility bills go up and all other income and expenses remain unchanged, its profits will shrink. If a company's rent goes up and all other income and expenses remain unchanged, its profits will shrink. If a company's cost of materials to manufacture its products goes up and all other income and expenses remain unchanged, its profits will shrink.

Labor is no different.

Now, you would not demand that a business pay a minimum price for its phone service; in fact, if you were a stockholder, you would want it to find the least expensive phone service it could, consistent with quality. You would not expect a company to pay 25% higher rent at 102 South Main Street than it would have to pay at 103 for identical property. You would not expect it to pay $35.00 a ton for widgets when it could buy them for $25.00.

So why should it pay $5.15 to an employee who's only worth $1.25? A business has no obligation to pay more than market value for any other goods or services; why should it have an obligation to pay an employee more than he's worth?

 

[punchdrunk]

I'm not sure I follow. Two people working full-time, minimum wage jobs make over the poverty line for a family of four. While the numbers for a one person household aren't given, you can assume they are at least slightly less than the two-person, probably close to the minimum wage pay.

True. But the poverty line doesn't define a living wage (granted 'living wage' isn't clearly defined at all).

I wouldn't want to try living on that amount, of course...

Were those numbers from the Census Bureau based on gross or take-home pay?

Jeremy

From my understanding, it's gross.

 

[punchdrunk]

One of Kerry's promise is to raise minimum wage.

It seems to me that if this were to happen

1. it would raise the over-head of businesses.
2. In return the businesses would raise their fees to compensate.
3. The cost of living would increase
4. Minimum wage would have no effect.

Would this work?:

1. Raise the minimum wage to a 'living' wage.
2. Offset the over-head costs of the raise by reducing payroll taxes on businesses.
3. Less payroll taxes means less going into medicare and other health insurance programs.
4. Less money is needed for these programs, however, because less people need to rely on these programs, because they are making a 'living' wage.

Someone feel free to inflate or puncture this....

 

[mortimer]

1) Why should there be a national minimum wage? Five bucks and change may enable someone to scrape by in West-By-Godforsaken-Virginia, but it's not enough to enable you to live in a cardboard box in the northern part of The Real Virginia. What possible rationale can there be for a one-size-fits-all minimum wage?

Excellent point. I smell an opportunity for another giant government bureaucracy that would determine what the "living wage" is for all parts of the country, adjusted yearly.

 

[BPSCG]

Re: Re: Kerry on Minimum wage

Would this work?:

1. Raise the minimum wage to a 'living' wage.
2. Offset the over-head costs of the raise by reducing payroll taxes on businesses.
3. Less payroll taxes means less going into medicare and other health insurance programs.
4. Less money is needed for these programs, however, because less people need to rely on these programs, because they are making a 'living' wage.

Someone feel free to inflate or puncture this....

Here's the pin:

The so-called "payroll tax" is the Social Security/Medicare tax.

Medicare is not welfare. It's the primary health insurance for everyone over age 65. People are going to need it whether they are working or not.

Also, if you're going to reduce the Social Security tax, are you going to reduce the benefits paid out?

 

[merphie]

Well the cost of oil has dramatically increased.


Th problem with a thread like this is that its so easy to throw out simple econ basics to support your view BUT the econ situation is hardly simple. THere are so many factors that affect the economy. A simple taco supply/demand chart wont explain the situation.

I know it's not that simple. I trust my friends on here could have an informed discussion.

The gas price was more than half the price it is currently when i worked at Taco Bell. Gas was not the factor.

 

[Tmy]

Re: Re: Re: Kerry on Minimum wage

Here's the pin:

The so-called "payroll tax" is the Social Security/Medicare tax.

Medicare is not welfare. It's the primary health insurance for everyone over age 65. People are going to need it whether they are working or not.

Also, if you're going to reduce the Social Security tax, are you going to reduce the benefits paid out?

I hate when people include SS when they talk about incoem tax. It is not imcome tax.........thats the line above!

Is the social security tax a graduated tax? Do they take a greater % the more you make?

 

[Tmy]

I also worked for Taco Bell during and after the last minimum wage hike. Taco Bell increased it's prices shortly afterwards. For what reasons exactly I don't know.

Funny. Lately Taco Bells big push has been the new expanded "dollar menu".

Are you sure they raise prices??

 

[merphie]

By the way, I now have that Southpark song by Cartman's J-lo handpuppet "Taco flavored kisses" stuck in my head now.

DAMN YOU MERPHIE!!!


"Ill fullfill all your sexy wishes, Give you lots of taco flavored kisseeeeeeees"

My plan is almost complete!

 

[Tmy]

Does anyone have Fed Incoem tax stats? Without any Social Security Tax, Medicate tax add on. Its not like the working average stiff is benefiting froom SS or Medicare, so you cant hold that against them. Might as well toss in your retirement and medical plan deductions as "taxes".

Its seems that when we talk about the "rich paying more than their share" the numbers are really inflated.

 

[Meadmaker]

Re: Re: Re: Re: Kerry on Minimum wage

Is the social security tax a graduated tax? Do they take a greater % the more you make?

No. It is a fixed percentage, up to a maximum, at which point they stop taking anything.

 

[BPSCG]

Re: Re: Re: Re: Kerry on Minimum wage

I hate when people include SS when they talk about incoem tax. It is not imcome tax.........thats the line above!

Is the social security tax a graduated tax? Do they take a greater % the more you make?

Read the quote again. Rhoadp was talking about the "payroll tax", which is commonly understood to include the Social Security, Medicare, and (I believe) any state unemployment tax. They're figured as a flat percentage of your gross salary, hence the distinction from income tax.

To answer your question, the Social Security /Medicare tax is a flat 7% of your salary, up to a ceiling that's increased yearly. Current ceiling is something like $88,000. Once you earn over the ceiling, you stop paying further tax.

 

[merphie]

Re: Re: Kerry on Minimum wage

Would this work?:

1. Raise the minimum wage to a 'living' wage.
2. Offset the over-head costs of the raise by reducing payroll taxes on businesses.
3. Less payroll taxes means less going into medicare and other health insurance programs.
4. Less money is needed for these programs, however, because less people need to rely on these programs, because they are making a 'living' wage.

Someone feel free to inflate or puncture this....

Ok with one and two. But you would need like $10 / hour to be able to afford health care. Besides Medicare doesn't apply to the younger groups who would probably gain the most benefit from a minimum wage increase.

 

[Meadmaker]

1) Why should there be a national minimum wage?

Sometimes, the answer is that the best possible law is too complicated to actually work. My opinion is that the need for the principle of a minimum wage is very clear, and it is up to legislators to work it out. (God help us all.)


2) I would argue with your first point above. If a company makes a profit, then the work performed by all the employees is more valuable than the wages paid to the all the employees.

Exactly. The example is simplified. I know some people who make a whole lot more than minimum wage whose true value to the company is somewhat less than zero.

And of course, the services of one, single, employee are rarely worth anything. It's the total work performed by the whole team of employees.

What should an employee be paid if his services are worth less than the minimum wage?

He should be fired. If his lack of value is due to his problem, for example he is too lazy to work, get rid of him and find someone not so lazy. If his labor is inherently of so little value that you cannot afford to pay him a decent salary, as defined previously, then you should not be allowed to profit from his labor.


Now, you would not demand that a business pay a minimum price for its phone service;

No, but I would demand the phone company pay its employees minimum wage, which they would then pass on to the business that uses its service. Indirectly, then, I am demanding that the business pay a minimum price for its phone service.


So why should it pay $5.15 to an employee who's only worth $1.25?

I believe that every person not suffering from a handicap is capable of doing labor that is enough to keep him alive at a decent level. In other words, I believe that every non-handicapped person is capable of producing something that is worth a fair minimum wage. If you, as an employer, cannot figure out a way to harness that person's talent sufficiently for him to make enough to feed himself, then you aren't a very good businessman, and you should go get a job, and release that person into the employment pool where someone else can harness them more effectively.

For handicapped people, we provide a subsidy to employers so that we, as a society, shoulder the burden instead of sticking it to the employer who is trying to do what he can for a handicapped person.

 

[punchdrunk]

Now, you would not demand that a business pay a minimum price for its phone service; in fact, if you were a stockholder, you would want it to find the least expensive phone service it could, consistent with quality. You would not expect a company to pay 25% higher rent at 102 South Main Street than it would have to pay at 103 for identical property. You would not expect it to pay $35.00 a ton for widgets when it could buy them for $25.00.

So why should it pay $5.15 to an employee who's only worth $1.25? A business has no obligation to pay more than market value for any other goods or services; why should it have an obligation to pay an employee more than he's worth?

My 2 pennies: I think we have to look at what value a business provides and who that value ultimately belongs to. The reason we celebrate the benefits of a free market is because of the value it provides to the community. A business, in of itself, has no value without the community it serves. So, if you agree with this, I would think that, as a free market's first obligation is to the citizenry, on the smaller scale, a business's first obligation is the welfare of its employees and consumers.

But my mind is open to all this. To me, this is the crux upon which most of my 'liberal' views derive.

ps - under a living wage, my 2 cents will go up to about 8 cents....

 

[merphie]

Funny. Lately Taco Bells big push has been the new expanded "dollar menu".

Are you sure they raise prices??

We are not talking about recently.