Seattle 15$ min wage costing workers 125$ p/mo

[lecter]

WE WAR ROOM NOW

 

[Jack V Savage]

It's anecdotal and hardly indicative of some general trend, but it is almost most certainly happening to some small business owners. What's more, I see it around a lot and I've seen it in this very thread, but the hard line approach of "If you can't afford to pay $15 an hour, you don't deserve a business!" doesn't change that those jobs are gone and so is a small business, with a big business laughing all the way to the bank.

The weight of the evidence suggests that modest MW increases don't affect overall employment levels, though. I'm not aware of any research on the subject, but it is possible that a higher MW helps better-run businesses gain market share. If so, the effect is probably very small, and it would probably have a positive impact on overall growth.

 

[panamaican]

This is because people don't understand that wages are not really set "per hour". A job is worth a certain amount of money. Changing the rate of pay does not change the value of the job. Whenever people scream about upping the minimum wage they completely ignore that it doesn't turn a $20k job into a $30k job, it just means that the $20k gets allocated over fewer total hours. Add in the other expenses like the employer side of payroll tax and overtime costs, it's inevitable that actual workers will see a negative impact on their individual incomes because the employer is going to try and keep their costs flat.

The ironic part of this is that the people who hate increasing the minimum wage for low income workers support the exact same failed strategy for low skill manufacturing labor. And the people who generally say that protecting manufacturing is pointless, will support these minimum wage increases for low income workers. They are both doomed to fail because the core problem is the same - the job is not worth the money that people want to receive for it.

 

[ehtheist]

The weight of the evidence suggests that modest MW increases don't affect overall employment levels, though. I'm not aware of any research on the subject, but it is possible that a higher MW helps better-run businesses gain market share. If so, the effect is probably very small, and it would probably have a positive impact on overall growth.

I would be curious to see some research on the matter and what types of employment are lost VS which types gained. Over the years I’ve seen some voodoo performed with job numbers, to fit multiple agendas, showing the creation of multiple part time jobs as a net gain VS the loss of a single full time job, or showing job numbers outright while ignoring lost benefits, etc etc.

The unfortunate reality in the trades is that “better-run” often equates to “the ability to put in the lowest quote and juggle multiple jobs and extend deadlines” whether it’s realistic or not or whether the work is done on time or not. You’ll have an overworked, undertrained larger company bidding on more work than they can possibly do, doing mediocre work, and taking a long time doing it because they’re juggling multiple jobs – whereas a company that bids on fewer jobs, meets deadlines, and tends to do more thorough work gets outbid and gets no job at all while the former type of company saturates the field. There is a place for elite companies, but “better-run” is a matter of interpretation concerning companies like my old one VS, say, College Pro painters which was constantly underbidding us and having clients regretting going with them.

I’m not intrinsically opposed to raising a minimum wage and I do suspect it would actually have a positive effect in some areas. I’m just wary of the effect it would have on certain types of markets. More research with details on methodology would be appreciated.

 

[ultramanhyata]

Trying to combat income inequality with a minimum wage is like the Red Coats marching in formation through open fields trying to fight American settlers hiding and firing from behind rocks and trees.

It is an antiquated and easily vanquishable strategy.

 

[CrimsonFan]

This. Don't see how a shit town full of mcjobs can afford to pay a full staff fifteen bucks an hour to flip burgers.

They can't. Likely cut a lot of the extra guys and take the good cooks and make them work with less staff.

Probably leads to making your burger take longer and even worse customer service.

 

[Jack V Savage]

This is because people don't understand that wages are not really set "per hour". A job is worth a certain amount of money. Changing the rate of pay does not change the value of the job. Whenever people scream about upping the minimum wage they completely ignore that it doesn't turn a $20k job into a $30k job, it just means that the $20k gets allocated over fewer total hours. Add in the other expenses like the employer side of payroll tax and overtime costs, it's inevitable that actual workers will see a negative impact on their individual incomes because the employer is going to try and keep their costs flat.

The ironic part of this is that the people who hate increasing the minimum wage for low income workers support the exact same failed strategy for low skill manufacturing labor. And the people who generally say that protecting manufacturing is pointless, will support these minimum wage increases for low income workers. They are both doomed to fail because the core problem is the same - the job is not worth the money that people want to receive for it.

Jobs don't have some objective, unchanging underlying value, though, and it's not just MW laws that affect wages. If we were to mandate, as some countries do, that workers have representation on boards, that would make capital relatively less valuable and jobs relatively more valuable, for example (and would also raise wages). And even from a pure 101 perspective, note that negotiations for (especially) low-wage work are very far from perfect conditions (particularly, there is a huge asymmetry in terms of power and information between the two parties in the negotiation) in ways that keep wages down. So MW works as a crude way to correct that problem (which is why modest increases generally show no effect on employment).

 

[Mark Hunts FIST]

15 is too high nationally. Some cities should be able to support it. More power to them.

Min wage should go up every 3 years at minimum imo.

 

[panamaican]

Jobs don't have some objective, unchanging underlying value, though, and it's not just MW laws that affect wages. If we were to mandate, as some countries do, that workers have representation on boards, that would make capital relatively less valuable and jobs relatively more valuable, for example (and would also raise wages). And even from a pure 101 perspective, note that negotiations for (especially) low-wage work are very far from perfect conditions (particularly, there is a huge asymmetry in terms of power and information between the two parties in the negotiation) in ways that keep wages down. So MW works as a crude way to correct that problem (which is why modest increases generally show no effect on employment).

Jobs don't have some objective underlying value but the whatever value they do have isn't set by the MW. Which is why simply changing the MW doesn't have the effect it's proponents hope.

And while increasing the MW doesn't have an effect on total employment, it does have an effect on a variety of ancillary variables. Like total hours worked, amenities, overtime availability, etc.

Even if you changed the representation on boards or balanced the negotiations, you're never going to get around the baseline fact that certain jobs just aren't worth much. Giving the McDonald's cashiers equal negotiating power isn't going to change the rest of the overhead for running the restaurant or the price that consumers are willing to pay for the food itself. Cashiers might squeeze some small pittance of an increase out of the corporation but nothing meaningful because they can't force the corporation to raise the prices of Big Macs or magically reduce the cost of rent, property taxes, etc.

There are very few industries out there where companies are systemically underpaying their staff by 20%+

 

[Jack V Savage]

Jobs don't have some objective underlying value but the whatever value they do have isn't set by the MW. Which is why simply changing the MW doesn't have the effect it's proponents hope.

And while increasing the MW doesn't have an effect on total employment, it does have an effect on a variety of ancillary variables. Like total hours worked, amenities, overtime availability, etc.

I don't think it usually has that effect either, though we're probably seeing it in Seattle because the MW went up too much.

Even if you changed the representation on boards or balanced the negotiations, you're never going to get around the baseline fact that certain jobs just aren't worth much.

What I'm saying is that the worth of jobs is in large part determined by laws other than MW *and* that without a MW (or with one that is too low), low-skill workers could be expected to be systematically underpaid relative to what they'd get if they knew as much about the economics relating to their job as their employer does. So certain jobs might not be worth "much" in some kind of hypothetical sense, but they're likely worth more in the same sense than they pay or than they would pay with no MW or a lower one.

 

[HunterSdVa29]

that's just common sense

If you're paying two people 9$ and hour to do a job that takes zero skill.....

why not just pay one person 15 and expect them to work harder?

 

[panamaican]

I don't think it usually has that effect either, though we're probably seeing it in Seattle because the MW went up too much.

No, it does. The same studies that showed that employment doesn't decrease did note those additional effects, albeit in varying degrees. And there was no consistent effect. Some employers reduced overtime. Others cut total hours. Others reduced benefits and amenities. Others raised prices for their goods/services. But very few employers simply absorbed the cost to their detriment.

What I'm saying is that the worth of jobs is in large part determined by laws other than MW *and* that without a MW (or with one that is too low), low-skill workers could be expected to be systematically underpaid relative to what they'd get if they knew as much about the economics relating to their job as their employer does. So certain jobs might not be worth "much" in some kind of hypothetical sense, but they're likely worth more in the same sense than they pay or than they would pay with no MW or a lower one.

I disagree. I think that many jobs are chronically overpaid and it's purely as a result of the MW. More importantly, I think the minimum wage systematically reduces job prospects for lower skilled and lower educated workers, something I'm pretty sure that the research supports (but I don't remember exactly). So, every time we bump the MW we create more incentive to harm the very workers we're supposedly trying to protect.

 

[Literally Bricked]

Lol. Some of you throw that word around like its candy. In this scenario your use of the word bigot doesn't work.

Racist. xD

 

[Squarechoke]

It's very interesting reading discussions around minimum wage, and the perceived necessities within it, as a resident of a place that doesn't have that system.

It's also interesting to see what levels of minimum wage that are discussed. As a comparison, Switzerland is another country without minimum wage that voted about possibly introducing that 3 years ago. Their proposed minimum wage was $25/h.

 

[BJ@LW&WW]

The only sentence in that link that means anything:
The paper’s findings are preliminary and have not yet been subjected to peer review.
in other words, its mostly speculative BS...

i wouldnt go that far, but im not even gonna bother reading the paper until its actually approved.

 

[Jack V Savage]

No, it does. The same studies that showed that employment doesn't decrease did note those additional effects, albeit in varying degrees. And there was no consistent effect. Some employers reduced overtime. Others cut total hours. Others reduced benefits and amenities. Others raised prices for their goods/services. But very few employers simply absorbed the cost to their detriment.

There is speculation on the reason for the lack of observable employment effects, and the things you're mentioning have been cited (plausibly enough) as reasons for that.

I disagree.

I don't see how. Surely you acknowledge the point that low-skill workers know less about the underlying business of the firms they work for and labor markets in general than their employers do, right? And that there is a power imbalance and that they likely have a more urgent need to make some kind of deal for their labor? If we grant those--I would think--uncontroversial points, it would seem to follow naturally that we would expect (absent MW) for low-wage workers to be underpaid relative to what they'd get under ideal market conditions. If workers getting fair market value for their labor is a goal, it would seem that the only question about MW is "how high is too high?" We could imagine other policies to correct the situation (for example, making all wages public knowledge, and business info publicly available, as well as forcing employers to disclose the number of applicants and some info about the applicant pool, etc.), but there are practical hurdles.

I think that many jobs are chronically overpaid and it's purely as a result of the MW.

It's possible for "many jobs" to be chronically overpaid and for low-skill workers as a group to be systematically underpaid. I noted that MW is a crude solution to the issue I described.

More importantly, I think the minimum wage systematically reduces job prospects for lower skilled and lower educated workers, something I'm pretty sure that the research supports (but I don't remember exactly). So, every time we bump the MW we create more incentive to harm the very workers we're supposedly trying to protect.

There's evidence that at a certain level the MW reduces job prospects for low-skill workers, but not that the very existence of a MW does. After all, we've had full employment (and labor shortages) while having a MW in the past, and we're close to it now.

 

[vespasian]

Actually, my first employer in Canada is on the verge of going under with the NDP's minimum wage hike - a small painting/handyman company with about 10 guys. His margins were small and he had some bad luck with people leaving after he spent a few years training them up and all of the sudden he had a couple of new guys and the minimum he had to pay relatively unproductive, untrained workers went up by a large percentile. The end result were his small margins getting destroyed and one job that didn't turn a big profit pretty much put him out of business. His much larger competitors are doing OK though and, frankly, their work is *way* below the standard of quality he demands and they oftentimes underquote to get the job fully knowing they'll pay way more.

It's anecdotal and hardly indicative of some general trend, but it is almost most certainly happening to some small business owners. What's more, I see it around a lot and I've seen it in this very thread, but the hard line approach of "If you can't afford to pay $15 an hour, you don't deserve a business!" doesn't change that those jobs are gone and so is a small business, with a big business laughing all the way to the bank. Whatever else it does, a higher minimum wage is hard on small businesses, but when small business owners express their concern with this, all of the sudden the people who are oftentimes anti big business adopt a stance of "Tough beans!"

It has been said in this thread before, but these policies are not a one-size fits all approach and they're oftentimes well meaning but poorly thought out - but heaven forgive you if you don't express unconditional support for hiking the minimum wage or you're an evil capitalist oppressor... I'm more in Rod's camp myself - forget the minimum wage and instead focus on health care, education, etc.

yep, small business owners are hit pretty badly by this.

 

[Squarechoke]

yep, small business owners are hit pretty badly by this.

I don't think they have to be in the general sense though. The $25/h minimum wage that was voted down in Switzerland wasn't voted down because it was too high (90% of the population there earns more) but because the minimum wage system would help companies to lower wages compared to the collective bargaining contracts that are set up between worker unions and employer organizations. Their vote was to keep more power with the workers than the corporations and they clearly get along well financially.

 

[vespasian]

I don't think they have to be in the general sense though. The $25/h minimum wage that was voted down in Switzerland wasn't voted down because it was too high (90% of the population there earns more)

Food in Switzerland is expensive. Dining out is super-expensive (and food sucks). Everything is expensive there. You wouldnt be able to open a restaurant there selling say, cheap, good Asian food because you couldnt afford to hire help. So... high salaries + high prices ==> small businesses suffer.

 

[Squarechoke]

Food in Switzerland is expensive. Dining out is super-expensive (and food sucks). Everything is expensive there. You wouldnt be able to open a restaurant there selling say, cheap, good Asian food because you couldnt afford to hire help. So... high salaries + high prices ==> small businesses suffer.

I have very limited time spent in Switzerland so I'm no expert on the entire picture, but I haven't heard anything about smaller businesses suffering there. Things are expensive in Switzerland, but easily offset by that the minimum wage proposal of $25/h was considered low, as 90% earns more than that. Cheap is related to the money in circulation, not a set figure that works globally.

They don't have any unusual unemployment rates either, so clearly a general statement that all workers earning decent salaries will cause jobs to decline is BS. Although, as said, they also show that the minimum wage system isn't necessarily the way to increase salaries the most.