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NoCoPilot

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PostSubject: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 11:17 am

Lots of discussion everywhere about raising the minimum wage. Rarely has an issue been subject to such divergent analyses.

The right-wing equates a higher MW with the bankrupting of America. Even their own figures point out the absurdity of this contention however, as the MW affects only "between 1.6 percent and 2.8 percent of all US workers."

On the other end of the spectrum I heard a fascinating report this week, following on the CBO report on MW, which said that the REAL costs of the present low MW are borne by public services -- WalMart employees on food stamps and Medicare -- and raising the "poverty wages" of full time workers would not only pump a whole lot more money into the economy, it would reduce public spending considerably. The end result would be a huge boost to productivity and the economy and deficit reduction. Wish I could find a link to that story, it was eye opening.
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SAI2




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PostSubject: Re: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 4:17 pm

1.6 and 2.8 % seems absurdly low to me. I would have thought there were vastly more low wage/MW jobs than any other kind, which puts the earners of such wages in a vast majority imho. I also would have assumed that raising MW would, for those businesses, essentially force those businesses to make cuts to their workforce, defeating the purpose of raising the wage. Some might benefit, but a lot more will either lose their jobs or have to take a cut in hours paid. Raising the MW has to be paid for somehow, and small business owners and corporations adjust their expenditures and workforce accordingly. Executives and CEO's are certainly not going to take pay cuts to pay for the increase in MW for the bulk of their front line service staff. Any decrease in productivity will be made up by those who are kept working, but they will work twice as hard to cover the staff shortages which will inevitably result. All raising MW does is re-distribute the wages to fewer people whom must work harder to earn their keep and nothing changes as far as people collecting from Uncle-Handout-Sam goes. Besides, the very miniscule amount that MW is raised won't make much difference to the average MW worker as far as overall cost of living is concerned. But collectively, for certain corporations, even a small boost in MW will eat into their profits, BIG TIME, and that just won't do.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 4:34 pm

SAI2's post epitomizes the bullshit that is constantly spread by the right wing of the Republican Party under orders from the small percentage of people who benefit from keeping millions of others in poverty. SAI2 really needs to quick watching Fox News and read articles by economists who have no dog in the fight.

Taxpayers - working class and middle class taxpayers - spend many billions of dollars every year to assist in supporting those who are unfortunate enough to have to work for these despicable corporations who refuse to pay their workers a decent salary. In other words, the taxpayers are subsidizing the profits of WalMart, et.al.

Capitalism does not work when a great percentage of the wealth is held by a few people. The American economy is based on consumer spending, and when the consumers don't have any damn money to spend, the economy fails. That is exactly what is happening now and will continue to worsen as long as our prevailing economic oligarchy is applauded by those who don't understand what the fuck is going on.

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SAI2




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PostSubject: Re: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 4:57 pm

Howard, I don't watch Fox news, and I'm no expert on this subject. I do know any employer I've ever worked for thinks about the bottom line, plain and simple. The extra money has to come from somewhere. What I was saying just seems to make sense to me from simply imagining what it must be like to be a business owner, and what it is like to work for any company that is faced with a major mandatory increase in minimum wages. It may not affect most businesses that don't have low wage earning staff, and a lot of them, but it does have a major impact, for instance, on fast food restaurants, in a huge way. I don't consider myself right-wing on most subjects. I'm just thinking about this from a simple pragmatic pov, the pov of a business person. That's all.
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_Howard
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PostSubject: Re: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 5:39 pm

First, let me apologize for accusing you of watching Fox News; that's not a nice thing to accuse anyone of. Sorry about that.

Try not looking at it from the point of view of a businessman. Look at it from the point of view of tens of millions of underpaid workers. Look at it from the point of view of the benefit to the overall economy if all workers made a living wage and had a disposable income that would create millions of jobs. Look at if from the point of view of the taxpayers who are now forced to subsidize incredibly profitable corporations.

I have been an employer and when setting wages, I considered not just the benefit to my business, but also to what seemed equitable compensation to the employee. I never had to advise any of my employees as to how they could apply for benefits from the state or the feds (part of WalMart's employee orientation). I didn't get rich in my businesses, but I didn't starve and neither did my employees.

If a business cannot be operated without paying their employees - all of them - a living wage, then the business should shut down. Someone else will design a better business plan that will allow all involved to be satisfactorily compensated.

Last year, McDonald's reported corporate profits of $1.5 billion. Keep in mind that McDonald's just sells franchises and the the individual stores are owned and operated by primarily small businessmen. It is estimated that taxpayers coughed up $1.2 billion in support for McDonald's underpaid workers. So where is the cost being borne? If McD had to pay a decent salary, the corporation's profits may fall, but so would the cost to taxpayers.

This is the way it works for all large, low-wage employers. The cost to taxpayers of WalMart's low wages is astonishing and when combined with other low-wage employers, it's in the tens of billions per year. That's your money and my money which is going into the pockets of some of the wealthiest people in the world.
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SAI2




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PostSubject: Re: Minimum Wage   Minimum Wage EmptySun Feb 23, 2014 9:51 pm

I hate to play devil's advocate with regard to capitalism because I'm not a fan of the ideology/economic system. However, since humanity hasn't collectively come up with anything better, we are stuck with it... for now.

Since it is a reality I will argue within it's bounds - I sympathize and empathize with low wage earners. I have been one all my life. I don't like it but that's where I am and I've failed to do anything successfully to create opportunity to earn higher wages.

That being said, what on earth are the parameters of an "officially sanctioned" living wage? Who gets to decide that relativistic number? A living wage changes from town to town, region to region, state to state and country to country. It also changes over time and is dependent on economic conditions at any given moment. You give everyone a "living wage" and you most assuredly will bankrupt the country because many businesses can't afford such a draconian measure and will go belly up. Either that or be forced to cut staff, hours, increase prices... do whatever it takes to accommodate that hypothetical livable wage for everyone. If profits are decreased, for whatever reasons, investors pull out. Expenses have to be kept to a minimum while at once quality and productivity are kept as high as is possible, comparatively speaking.

There is no such thing as being able to live on one MW, part-time job. Even a MW full-time job is incredibly stressful depending on the living conditions of the employee in question and how they choose to live, if they have any choices available. Where I live the MW has increased a few times over the decades, but not enough to make any real significant difference for anyone. Prices rise when businesses realize people have more spending power. Taxes increase. Businesses find ways around the extra expense regardless and people still get government handouts. Nothing has really changed and my living circumstances didn't improve one iota from the MW increasing. My living circumstances improved when I changed my circumstances; my living arrangements, but the government has played no part in that improvement whatsoever.

Increasing MW isn't going to supply "disposable" income to anyone. Who has disposable income that lives on MW or even a few dollars above MW? If it wasn't a livable wage before the increase, it won't be after a miniscule, incremental increase. It certainly won't be enough to create jobs. Debt levels certainly won't be affected and handouts will roughly be the same if not more, to cover those employees whose hours are cut and/or laid off.

You say taxpayers subsidize profitable corporations via the corporations advising employees to apply for state benefits..., well, yes, because they know they can get away with that. They know they don't have to pay higher wages because the safety net is there. I hate to say it, but if the safety net weren't there, Walmart would have to drastically rethink their strategy, would they not? It is a vicious circle where businesses won't pay more if they don't have to, but they would if they realized their employees couldn't survive and be productive at work. The state benefits benefit them and keep their prices down, and profits up. So it's in their best interest to take advantage of what government is offering. Not fair to taxpayers, but very lucrative to investors expecting profits, and consumers of cheap products it seems. The employees are held hostage between those competing forces, and the only way wages will increase is if state benefits are eliminated, or, a law is passed forcing businesses to pay a livable wage (whatever that is) - thus redistributing the income and expenditure within the company. It's a tough dilemma. I suspect businesses will be more inclined to pay more than MW once they realize their workforce can't survive off the government anymore, and they are fully and completely responsible for the well beings (ergo: productivity) of their respective work forces. But then I could be wrong...

You can't just shut down a business because it can't pay what you think is a livable wage. Business requires cheap labor to keep costs down. If prices are too expensive, no one will purchase them and money will be lost, and eventually the business will be unable to be self-sustaining/sufficient. No one can design a better business plan based on over-expense, un-profitability and loss.

Having said all that... I just want to add, I hate capitalism. Can't live with it, can't live without taking advantage of it.

You said earlier that capitalism doesn't work when a great percentage of the wealth is held by a few people - well, it wouldn't work if it was evenly dispersed either. Capitalism is the snake that is eating its own tail. If left to it's own devices, unregulated and unrestricted, it will self-implode. The rich few haves, and the majority of have nots, is the result of a natural capitalist cycle. The rich haves need to realize it is in their best interest to re-invest and support new ongoing cycles, or else face imminent and complete world wide economic collapse.

It's an incredibly stupid, nightmarish, vicious cycle we are all stuck in and enslaved by.
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NoCoPilot

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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Feb 24, 2014 11:01 am

SAI2 wrote:
I also would have assumed that raising MW would, for those businesses, essentially force those businesses to make cuts to their workforce, defeating the purpose of raising the wage.
I can tell exactly where this is wrong -- a "minimum wage" affects all businesses, therefore there is no competitive disavantage to raising it.

The idea that a restaurant will hire waiters and dishwashers at $7.62/hr but won't at $9.09/hr is fatuous. If they need the personnel, they'll hire them. If they don't, they won't. A couple bucks/hr isn't going to change that calculation.

The advantage of a higher MW of course is that less of the cost of that worker is borne by public services, and more is passed on to the business's customers. We're all so used to $1 hamburgers and $5 shirts that we've forgotten the hidden costs.
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Jenni
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Feb 24, 2014 5:16 pm

SAI2 wrote:
I do know any employer I've ever worked for thinks about the bottom line, plain and simple. The extra money has to come from somewhere.
And I'm just fine with it coming out of profits.

I have hired no help for my businesses. Because I'm not able to afford it, I don't make enough. Others need to follow my example. If you can't pay people enough that they can live on what you pay them then you simply cannot afford to have employees. We don't work so you can have profit we work so we can have food and shelter. You will never ever convince me that these businesses are hurting. I'm sorry, I know too much about them to accept that. The man that owes my husband thousands right now complains of costs and sits in one of the best areas of town with motorcycles and cars and has plenty yet still complains because he's annoyed he has to actually pay people. This is who these people are. There are exceptions. But they are notable because this is the norm.

If your employees have to seek government assistance you need to be stopped from hiring until that's cleared up. Yes. I'm for that. It is not my job as a tax payer to finance your summer homes.
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NoCoPilot

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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Feb 24, 2014 5:22 pm

And this, in a nutshell, is exactly the reason for opposing raising the MW -- which in real dollars hasn't budged since I think it's the early 1970s.
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SAI2




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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Feb 24, 2014 8:59 pm

NoCoPilot wrote:
I can tell exactly where this is wrong -- a "minimum wage" affects all businesses, therefore there is no competitive disavantage to raising it.

MW doesn't affect all businesses equally and to the same degree. Some businesses have large workforces, others small. Some have higher than MW earners, some don't. Any single business which has a MW workforce in the tens or hundreds of thousands, or even millions, will be affected drastically by a 25 cent hike per hour across the board, more so than a business that has a staff of hundreds or less.

NoCoPilot wrote:
The idea that a restaurant will hire waiters and dishwashers at $7.62/hr but won't at $9.09/hr is fatuous.  If they need the personnel, they'll hire them.  If they don't, they won't.  A couple bucks/hr isn't going to change that calculation.

Oh, they will hire... but they will have to make up the difference somewhere. A higher paid wait staff requires a higher menu price structure. Higher prices run the risk of fewer return customers and/or possible cutting of corners in quality, service, etc. Or, a higher paid wait staff might result in fewer hours per day shifts. Fewer work days. Higher expectations of effort from fewer staff. Expectations of sharing of tips with everyone, including the owners (which in some restaurants does happen). There are all kinds of strategies to make up for higher wages.
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SAI2




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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Feb 24, 2014 9:53 pm

Jenni wrote:
And I'm just fine with it coming out of profits.

You might be, but shareholders aren't necessarily. Neither are management, executives, CEO's, etc.

Jenni wrote:
If you can't pay people enough that they can live on what you pay them then you simply cannot afford to have employees.

I don't see why. Any business owner can make any offer of compensation for work done, and people are free to work for that employer, or look elsewhere. If I offer someone some cash to paint my fence, if they complain I'm not paying a living wage, they are welcome to look elsewhere. If I start a business of fence painting and hire painters to paint fences, they can accept my offered wages, or not. If I can't find employees to paint my customer's fences, then that is what determines whether I should be able to make a business out of it, not someone telling me I should pay more than I do so my employees can live off my wages. A worker offers his services with a wage expectation, or demand, which, if not met, he always has the option not to work. Ditto an employer. If someone desperately needs work, then he may have to bend a little and lower his expecations. If an employer needs employees, and can't find any who will work for his wage offers, then he will have to consider either offering more, or not being able to build his business.

Jenni wrote:
We don't work so you can have profit we work so we can have food and shelter.

But from a business person's pov, that is exactly why you are working for him or her - to grow their business and assist in making the company successful and profitable. If you don't want to do that for the employer, you shouldn't be applying for the job. The harsh reality is that employers are not duty bound to take care of their employee's lives and choices concerning how they survive outside of their work. An employer assumes that since you are offering your services for a wage, that you will provide those services if you accept his offer of employment. It's just as much your choice to accept his offer as it is for him or her to accept your offer. No employer should be expected to have a say in how you live your life, what you should or should not do with your time off or your pay. They are only obligated to pay you what they contractually are obligated to pay you, which you agreed to, nothing more or less. They are obligated to treat you humanely on the job, and they are obligated to provide healthy, safe working conditions and the tools to fulfill your contractual obligations for the company and your employer. Nothing more.  

Jenni wrote:
You will never ever convince me that these businesses are hurting.

No one is saying they are. From their pov, they owe you nothing except a wage for services rendered. Services and wages which were agreed to when you came knocking with your resume'. How a business owner or owners spend their profits, or pay their employees, is entirely and completely up to them. If they don't pay their employees enough, or if they make very bad managerial decisions, or if they are cheating, lying, stealing, scumbags who abuse their employees, they and their company will suffer. But those are completely their decisions to make. Not anyone else's. Whether a business is actually hurting or not is immaterial to the question of whether you are entitled to anything more than what was agreed upon, upon your being hired. Business is not socialist in nature, nore is it democratic - it is dictatorial.

I had a boss once who used to say to his employees - "...this isn't a democracy here folks, it's a dictatorship. Benevolent, perhaps, to a point. but nonetheless, a dictatorship. Make no mistake of your place here, and who is in charge and paying your wage."

In principle, he was right of course. Regardless of how people felt about his attitude. Regardless of how much they expected their boss to take care of them... They always had the option of quitting if they didn't feel they were being treated right, or could be treated better elsewhere.

Jenni wrote:
If your employees have to seek government assistance you need to be stopped from hiring until that's cleared up. Yes. I'm for that. It is not my job as a tax payer to finance your summer homes.

They are two separate things. State assistance is governmental. The private sector is not. The only way this cozy arrangement would be ethically wrong is if it were discovered that someone in government purposely and intentionally were secretly helping out businesses through this practice for their own persoanl gain, via kickbacks of some kind, or whatever. In which case, I would assume, this would be worthy of criminal charges... I would assume. I mean, it would be highly questionable for this collusion of public and private sector not to be considered illegal.

However, if a company like Walmart takes advantage of a situation in government social assistance policy to further it's profit margin, without any collusion or illegal manipulation, then it's up to the electorate and your political leaders to fix the problem if a large enough portion of the electorate believe it is a problem needing of fixing (like, for instance, a conflict of interest). Thing is, if a lot of people feel it's beneficial in a you rub my back and I'll rub yours kinda way, there's not much anyone can do about it.
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NoCoPilot

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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Feb 25, 2014 6:11 am

I just remembered, one of the other main points in the radio report mentioned above is that a higher MW would help with the illegal immigration problem.

Here's how.

The reason illegals come across the border is to seek work, and the reason they find work is that they take jobs citizens don't want, and one prime reason jobs go unfilled is that wages are too low to live on. And/or unemployment pays more.

Raise the MW and these jobs won't go begging, and illegals will have a tougher time finding jobs, and fewer of them will come in illegally looking.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Feb 25, 2014 8:30 am

Maybe...

Some employers may still opt for illegals because they are manipulable due to their being illegal. Not to mention that it is just as illegal presumably to even hire illegals, which has nothing to do with level of wage. Also, jobs citizens don't want is interesting unto itself. Some citizens are clearly picking and choosing jobs they want and dont want. If eliminating the social safety nt is not palatable for the unemployed it seems employers shouldn't have to be deprived of workers who are actually willing to work.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Feb 25, 2014 3:01 pm

Most MW restaurant jobs are in fast food -- low cost, low profit margin, fast customer turnover, low skill requirements, high employee turnover expected.  Some article writers forget this.  But the basic economics still apply, if all your competitors are bound by the same laws, you're not at a competitive disadvantage for following suit and passing the cost along on your menu.  The consumer may pay $1.20 instead of a dollar for that hamburger, but it's made up for by lower taxes and lower insurance (because you don't have to pay for foodstamps or emergency medical for the frycook).

The idea that raising the MW lowers illegal immigration is not new, but the crystal clear connection there is muddied by people's misunderstanding of the relationship between MW and unemployment.  Somebody needs to correct the conservative misinformation feed, it's becoming conventional wisdom.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Feb 25, 2014 6:40 pm

It just seems so absurd that a small rise in MW would have any affect on illegal immigration. As if a dollar or whatever will put a halt to the plans of desperate families willing to risk life and limb to start a new life in america... "Honey, the minimum wage just went up, so let's forget about our dream of becoming American citizens. ".

Inspite of law, there will always be an opportunity to be paid low wages to do just about anything to live as an American. Rise or no rise in MW.

If that is all supporters of raising MW have in its favour....
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Apr 29, 2014 3:23 pm

Here's a new analysis of the MW problem.

PWND if I say so myself
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyWed Apr 30, 2014 1:15 pm

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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Mar 28, 2016 7:37 am

Heard on the news this morning that Jerry Brown is considering signing a bill that raises the MW to $15 for California.

That would mean all three Western states have some form of $15 MW (it's tied to the big cities where COL is higher).

The math is simple.  If you give more money to poor people they spend it, which stimulates the economy.  If you give more money to rich people (through lower taxation) they invest it -- not by 'creating jobs' in most cases but by gambling in the stock market.  Too much money in the stock market makes it unstable, causes bubbles, creates volatility.  With the federal government guaranteeing losses by means of bailouts, there is no downside to speculation.  With no consumer spending and only stock market speculation driving the economy, instability and fundamental weakness ensure a very rocky economy.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyMon Mar 28, 2016 9:11 pm

NoCoPilot wrote:
The math is simple.
Exactly. And yet not only do we have people who will argue with that math they will often go further. I often hear there should be no minimum wage at all.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Mar 29, 2016 6:38 am

Jenni wrote:
I often hear there should be no minimum wage at all.
In most things, a 'free market' is the most stable system. Prices and production find equilibrium through market forces.

I think I can guess why wages don't follow the same logic, at least low wages. It's because in this country (and most industrialized nations) we have a 'social safety net' called welfare and charity and emergency rooms to prevent people from 'starving out' at the bottom of the ladder.

Below a certain wage a worker is better off going on welfare.

Of course the people who advocate eliminating the MW are also the same social Darwinists who advocate eliminating welfare and all social services. The sick and mentally ill and full time moms should just all die and not get in the way of a new boat.
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PostSubject: Re: Minimum Wage   Minimum Wage EmptyTue Mar 29, 2016 7:57 am

This reminds me of a news story I read last week. Look at the $/employee on these companies (who all utilize unpaid interns and freelance contractors):
http://www.businessinsider.com/revenue-per-employee-charts-are-a-fascinating-way-to-judge-the-health-of-tech-companies-2015-4
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