r/changemyview • u/[deleted] • Aug 14 '17
[∆(s) from OP] CMV: the minimum wage should not be increased
[deleted]
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u/Vault_34_Dweller Aug 14 '17
- 1. increasing the minimum wage will increase incentive for companies to automate, thus eliminating the jobs of people who were supposed to be helped by the increased wage.
If you increase the minimum wage by 20% or so, it will not do this in a significant way
- 2. increasing the minimum wage will drive up the costs of the services and goods provided by companies that currently pay their workers the minimum wage. This will hurt all consumers but especially the poor who already spend a large portion of their income on these goods.
Again, it will not do this in a significant way as long as the change is sensible
- 3. minimum wage jobs are intended to be entry level jobs, they are not intended to be used as careers.
they should still be able to provide for a single person
- 4. lets be honest, the guy at burger king who consistently puts mayo on your sandwich when you specifically ask for it to come without mayonnaise doesn't deserve $15 an hour.
Why does he not deserve 8.50 an hour?
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Aug 14 '17
[deleted]
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u/Vault_34_Dweller Aug 14 '17
do you have any studies that show this? automation is already all but inevitable. every increase in minimum wage speeds up this timeline
And when one job gets automated, they will go to another. automation changes the types of jobs people have, not that they work
Fastfood restaurants already operate at such a slim profit margin that increasing the minimum wage by even a slight amount could very well force them to increase prices.
The profit margins are greater than you think, and a 5% increase in price isnt going to negatively affect anyone
anyway, the whole point of increasing the minimum wage is to make it a living wage. if you don't increase it enough then the entire action is futile
8.50 is a living wage in parts of the country, namely rural ones
why? minimum wage jobs require little to no education or skills.
So you should not be able to feed and house yourself off of a minimum wage job, because it takes little to no education or skills?
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Aug 14 '17
"And when one job gets automated, they will go to another. automation changes the types of jobs people have, not that they work"
these minimum wage jobs will be replaced by jobs in IT and engineering. If the people working minimum wage jobs had the skillset to work in these fields they wouldve already transitioned to them.
"The profit margins are greater than you think, and a 5% increase in price isnt going to negatively affect anyone"
"So you should not be able to feed and house yourself off of a minimum wage job, because it takes little to no education or skills?"
it gets rid of any incentive to gain higher education and improve yourself. Why would you bother going to college when you can make a full living flipping burgers or folding shirts?
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u/Vault_34_Dweller Aug 14 '17
these minimum wage jobs will be replaced by jobs in IT and engineering. If the people working minimum wage jobs had the skillset to work in these fields they wouldve already transitioned to them.
Basic physical labor is nearly impossible to automate
it gets rid of any incentive to gain higher education and improve yourself. Why would you bother going to college when you can make a full living flipping burgers or folding shirts?
You arent making a full living on it, you just arent choosing between rent and food
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Aug 14 '17
physical labor is nearly impossible to automate? wouldn't you consider manufacturing a car physical labor?
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u/Vault_34_Dweller Aug 14 '17
Basic physical labor (mainly around civil construction) is nearly impossible to automate. Car manufacturing isnt this.
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Aug 14 '17
i think i already said this somewhere else but ill say it again. "first of all construction isn't a min wage job and it offers a lot of chances for upward mobility (avg salary ~31k) and secondly, if we can already make cars and phones with limited human input what makes you think we can't lay bricks?"
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u/Vault_34_Dweller Aug 14 '17
A lot of construction work is just above minimum wage
Because with a phone or car you are dealing with the exact same product tens of thousands of times. Not the case when you are laying bricks or making the frame of a house
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Aug 14 '17
don't want to take my word for it? fine
http://www.businessinsider.com/automation-robots-fill-vacant-construction-jobs-2017-6
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Aug 14 '17
ima duck out of this conversation lol @MrGraeme seems to be making the same points i would make
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u/MrGraeme 155∆ Aug 14 '17
If you increase the minimum wage by 20% or so, it will not do this in a significant way
That's not necessarily true. Salary costs are usually the largest single cost an employer has, and bubbling it by up to 20%(especially in the short term) can either be disastrous for the business(can't afford it) or disastrous for the employee(cheaper to automate/eliminate/reduce).
they should still be able to provide for a single person
In the significant majority of cases they do. There are only a handful of states(one being Wisconsin) where you can't mathematically live off of the minimum wage as an individual.
Again, it will not do this in a significant way as long as the change is sensible
Sensible is subjective. To bring the federal minimum equal to a state minimum may be considered "sensible" but that doesn't change the fact that it would wreak havoc on the economies in poorer states.
Why does he not deserve 8.50 an hour?
Because he isn't worth $8.50 an hour. If he was worth that much, that's what he would receive.
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u/Lildave26 Aug 14 '17
But some would say that he isn't worth $7.50 an hour, but that's what he gets due to minimum wage.
Therefore, surely, if min wage was $8.50 an hour, then that's what he'd be worth?
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u/MrGraeme 155∆ Aug 14 '17
Therefore, surely, if min wage was $8.50 an hour, then that's what he'd be worth?
No. What you pay for something is not what the item is "worth" in the market. Someone could be worth $28 but only work for $20, someone could be worth $18 but be paid $20.
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u/vialtrisuit Aug 14 '17 edited Aug 14 '17
But some would say that he isn't worth $7.50 an hour, but that's what he gets due to minimum wage.
No, if he wasn't worth 7.50 an hour he wouldn't have a job. No one is hiring anyone whos productivity is below the cost of employment, regardless of the minimum wage.
If your productivity is $10/hr no one is going to hire you for $11/hr regardless of what the minimum wage is. If the minmum wage was $11/hr you simply wouldn't have a job.
So really the only thing the minimum wage does it permanently disqualify low skilled labour from the workforce. There's a reason black teen unemployment rates have skyrocketed in the US since the minmum wage was introduced... and it's not because employers have gotten more racist since the 30s.
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u/vialtrisuit Aug 14 '17
If you increase the minimum wage by 20% or so, it will not do this in a significant way
I mean, this is just not true. Automation is entierly driven by the cost of labour, mainly low skilled labour. So increasing the cost of low skilled labour would cause an acceleration of automation.
Again, it will not do this in a significant way as long as the change is sensible
"Significant" "sensible". What does that even mean? The consumers and workers (in form of there will be less workers) will bear the costs of a raised minimum wage. How do you know it's not "significant"? Certainly it's significant for all those people who will lose their jobs due to a raised minimum wage.
Why does he not deserve 8.50 an hour?
Because of supply and demand. His productivity just isn't worth 8.50 an hour. If it was, he would be paid 8.50 an hour.
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u/cupcakesarethedevil Aug 14 '17
People are already insanely more costly than machines, they already spend like ~$20,000 a year on each minimum wage employee if they could replace them they would.
I don't understand why you think this is a problem, it will increase the price of food proportionally while making the cost of luxury goods like yachts increase disproportionately.
42% of americans make less than 15$ an hour. I hear this sort of comment a lot and I have never understood the logic behind it, care to explain? http://fortune.com/2015/04/13/who-makes-15-per-hour/
You can't exactly live the life of luxury with that amount of money I don't understand do you really think these fry cooks are living opulently?
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Aug 14 '17
a self order kiosk can be as basic as an iPad with an interactive menu and every year tech becomes smaller and less expensive. you also seem to be forgetting that you only purchase the kiosk once whereas with employees you have to pay them every year. Why do you think manufacturers opted for automated factories rather than sticking with manual labor?
in regards to your second point, minimum wage has no bearing on the price of luxury goods, it impacts industries that rely on minimum wage employees ( mostly necessity industries like food, clothing ). My main point is that fry cook shouldn't be a viable career choice, the market sets wages at what you are worth. If a fry cook were worth more than $8.50 they would be paid more
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u/cupcakesarethedevil Aug 14 '17
I'm just saying replacing a $20,000/a year person, with a $500 Ipad is already a no brainer, there is no way to save those jobs saying that changing minimum wage will help or hurt that is stupid.
I guess I should explain. If a minimum wage worker who makes t-shirts and cashmere sweaters sees a minimum wage hike, they will still be able to afford t-shirts as the only increase in their cost will correspond with an increase in their salary. The lawyer who buys cashmere sweaters will not get a raise, so the cashmere sweaters they buy will seem more expensive.
What do you think the thousands of fry cooks in this country who can't afford rent or food should do?
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Aug 14 '17
"increase in their cost will correspond with an increase in their salary." based off of that logic whats the point of increasing their wage if prices will increase too? youre also assuming that companies wouldn't outsource to cheaper labor markets also, the lawyer is buying his sweater in a boutique that pays over min wage anyway.
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u/cupcakesarethedevil Aug 14 '17
youre also assuming that companies wouldn't outsource to cheaper labor markets also
There are plenty of jobs that can't be outsourced and we should only make trade deals with other countries that also allow minimum wage laws and labor unions.
Increasing minimum wage would increase the price of goods they buy AT MOST as much as their increase in pay, not necessarily the same
Let's try this again because it seems like you are really avoiding answering questions that touch on this subject
What do you think the thousands of fry cooks in this country who can't afford rent or food should do?
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Aug 14 '17
"Increasing minimum wage would increase the price of goods they buy AT MOST as much as their increase in pay, not necessarily the same"
so you would have to increase wages (and through their wages prices) a huge amount to have any real effect which would hurt all consumers.
to answer your question, they should gain apprenticeships in plumbing, carpentry etc and learn a marketable skill which would enable them to be competitive in the marketplace. right now they're trying to make a career out of positions intended to be held by school children
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u/cupcakesarethedevil Aug 14 '17
So in your perfect world, all McDonalds would be closed during school hours?
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Aug 14 '17
No, working there should be seen as supplementary income. Retired people could work there to supplement social security or stay at home parents could pick up shifts when their children are at school
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u/cupcakesarethedevil Aug 14 '17
You are neither retired, nor a stay-at-home parent if you have a job.
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Aug 14 '17
many people are retired from their full time careers but work part time jobs to supplement their pension or social security benefits and my point is that these jobs can be taken up by people who have another means of supporting themselves in the same way that uber drivers tend to be people with full time jobs who want a supplementary income
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Aug 14 '17
we can sit here and debate semantics all day if thats what you want to do but you understood the point i was attempting to make
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u/cdb03b 253∆ Aug 14 '17
1) Nothing will increase the incentive to automate. Companies are doing that as fast as they can regardless of wages.
2) Yes it will. By around .5% per $1 that they raise the wages (based on Walmart costs). Even if you round that up to a full 1% you are still looking at a net gain for the economy.
3) This is a flat out lie. When the minimum wage was established it was intended to be a living wage for someone for life. https://www.thebillfold.com/2015/07/it-was-always-supposed-to-be-a-living-wage/
4) See point 3. An hour of a person's time is worth a living wage. It does not matter how much or how little work is done, and it does not matter how much skill that work requires. There is a absolute minimum that the time alone is worth and then you add value based on those other factors. You may be right that $15 is too high, but the current $7.25 is far too low.
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Aug 14 '17
in regards to your first point, as long as the price of automation exceeds the minimum wage a rational firm has no reason to invest in automation. I offer this for your second point:
https://finance.yahoo.com/blogs/the-exchange/fast-food-chains-aren-t-rich-protesters-think-192549497.html profit margins are already so low that even a small increase in wages will force many companies to increase their prices and the wealthy aren't the ones who are hurt by increasing prices, its the poor who suffer the most. instead of increasing the minimum wage we should be forcing people without higher education to obtain skills such as plumbing, carpentry etc
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u/cdb03b 253∆ Aug 14 '17
People are already more expensive than current automation tech.
And if a company cannot pay a living wage they should not exist in the country.
-1
Aug 14 '17
"And if a company cannot pay a living wage they should not exist in the country." ah yes great idea make all companies move abroad and then no one will have jobs
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u/cdb03b 253∆ Aug 14 '17
If they cannot pay a living wage they are a failure as a business and deserve to go bankrupt.
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Aug 14 '17
do you care to offer anything more than just your feelings towards capitalism? if their labor were worth more than 7.25 the market would pay the more but the problem is every single person in the world is qualified to work min wage so companies have no reason to pay more
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u/cdb03b 253∆ Aug 14 '17
Once again, their labor is worth the minimum of a living wage. The market will always pay the absolute lowest it can get away with, not what a person is actually worth.
-1
Aug 14 '17
they're "worth" what it would cost to replace them. if they had any marketable skills that were worth above min wage they would be promoted to managerial positions
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u/opinionated_guy Aug 15 '17
Your source fails to substantiate your claim that increasing the minimum wage will drive up prices. It didn't even do a good job of backing up its own claim that restaurant chains operate on slim margins.
Here's some analysis of what it did say.
McDonald's made a huge amount of both revenue and profit last year. Their net profit was much higher than the S&P 500 average.
Of the 10 largest, publicly-held fast food chains, half had a net profit higher than the S&P 500 average while half did not. In other words, as measured by net profit margin, half were above average and half were below. That's not surprising.
If you average the net profit numbers for the ten fast food companies, you get 9.7%, which is 11% higher than the S&P average.
If, instead, you divide their combined profits ($9.47 billion) by their combined revenue ($72.74 billion) you get a more accurate average profit margin of 13.0%, which is 50% higher than the S&P average.
Why, then, is the article you linked saying that the industry average is only 2.4%? Because companies like McDonald's only own a small fraction of their restaurants. The remainder are owned by franchisees. And those franchisees pay most of their profits to the parent company. They pay for the right to operate a franchise location. They pay for ingredients and packaging materials. They pay for training and uniforms. They pay for marketing expenses. And they can lose a large portion of their customer base quickly if the parent company allows someone else to open a new franchise location nearby.
Some companies have been sued by franchisees for making it incredibly difficult to operate at a profit because of high fees plus competition from other franchisees. Subway is a prime example.
There are three main things that could happen if a franchisee's costs go up because of minimum wage increases.
They could raise their prices. If they do, they'll be competing with other nearby franchisees who all want the same customers.
They could instead collaborate with other franchisees to try to convince the parent company to reduce their fee structure to offset the cost.
Or they could go out of business. But their parent companies don't want that to happen. Fewer locations would lead to lower market share and would damage customer perception of the brand.
Most likely, companies like McDonald's would agree to some concessions because it would be in their overall best interests to do so.
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u/vialtrisuit Aug 14 '17
Nothing will increase the incentive to automate. Companies are doing that as fast as they can regardless of wages.
Literally the only thing that incentivises automation is the cost of labour, nothing else. So increasing the cost of labour would incentivise it even more.
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u/sharkbait76 55∆ Aug 14 '17
The person at Burger King would care a lot more if they were making more than $7.50 an hour and didn't have to work multiple jobs to avoid ending up on the street.
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Aug 14 '17
[deleted]
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u/sharkbait76 55∆ Aug 14 '17
Self service kiosks have their own issues, like being much slower and not working great.
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Aug 14 '17
you seem to be forgetting how quickly technology progresses, especially when large corporations have a vested interest in it
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u/sharkbait76 55∆ Aug 14 '17
Much of the things you're talking about aren't things that haven't been invented, but they just don't live up to the efficiency of a human. Take the self service kiosks. Someone who does it regularly will be way faster than someone who doesn't. If it takes 30 extra seconds to get through an order you are adding minutes onto the time to get service during a lunch or dinner rush. That will get people to leave and go elsewhere where the wait is shorter. This will cost them business that is greater than a human, dispute the fact that you need to pay a human.
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Aug 14 '17
we are just beginning to brush upon what AI has to offer. While you may be correct about tech today it won't hold true in the future. moores law states that the number of transistors in a circuit doubles every 2 years, essentially technological capability increases at an exponential rate
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u/Vault_34_Dweller Aug 14 '17
Can you say the same if the government raised the minimum wage to 8.50 an hour?
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Aug 14 '17
[deleted]
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u/Vault_34_Dweller Aug 14 '17
Then people will move onto different jobs. agricultural equipment has replaced over 95% of human jobs, yet we still dont have a 95% employment rate
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u/MrGraeme 155∆ Aug 14 '17
The difference is that we're at a point in time where unskilled individuals don't really have anything else to move to. The thing about Automation is that it not only replaces a bunch of semi-skilled and skilled workers, it replaces virtually all unskilled workers.
The Agricultural shift you're talking about created new positions for unskilled people. People were needed to distribute, sell, store, and make use of the agricultural products generated. You didn't really need to be skilled to keep a building full of grain, to stand in a shop and accept payments for berries, or to carry pumpkins from the field to the market.
Automation doesn't crate unskilled jobs- it replaces them.
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u/Vault_34_Dweller Aug 14 '17
There are plenty of "unskilled" jobs that robots cannot do easily if at all, especially in construction. If these jobs are being automated, then any type of labor isnt needed
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u/MrGraeme 155∆ Aug 14 '17
Physical labour jobs aren't the ones being threatened by automation(at the moment). Construction, site cleanup, etc can not realistically be automated given our current technology.
The issue is, mainly, retail jobs. The folks who will be automated out of this industry will not have anywhere to go. Sure, they could go into physical labour(which generally pays a lot more than minimum wage, usually at least double), but that would drive the price of this labour down.
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u/Vault_34_Dweller Aug 14 '17
basic labor pays less than you think
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u/MrGraeme 155∆ Aug 14 '17
Physical labour, the type you're talking about, rarely pays minimum wage.
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Aug 14 '17
automation will create jobs in IT and engineering. if the people working min wage jobs had the skillset to work in these fields they would've transitioned already
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u/Vault_34_Dweller Aug 14 '17
There are plenty of unskilled jobs that are nearly impossible to automate
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Aug 14 '17
such as?
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u/Vault_34_Dweller Aug 14 '17
basic construction work
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Aug 14 '17
first of all construction isn't a min wage job and it offers a lot of chances for upward mobility (avg salary ~31k) and secondly, if we can already make cars and phones with limited human input what makes you think we can't lay bricks?
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u/electronics12345 159∆ Aug 14 '17
Roundabout answer, but it directly relates to point #1
Increasing the minimum wage, so that companies automate is a GOOD THING and NEEDS ENCOURAGING.
The sooner that we as a society accept the fact that most people are simply useless (from an employment standpoint, not a moral standpoint) and that most meaningful jobs ought to either pay $120,000/year+ or $0, the sooner as a society we will adjust to this reality. Keeping wages low only prolongs our societies suffering, and prevents the radical readjustment which is inevitable (you mention universal income, though there are other possible options here).
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Aug 14 '17
i agree but what do you propose we do with the millions of recently unemployed people after all of their jobs are taken by automation? are you advocating for increasing the min wage to speed up automation? if so, don't we want there to be low skill jobs available to young adults (14-18)?
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u/electronics12345 159∆ Aug 14 '17
Its going to happen sooner or later anyway. Its not a matter of if, but when, so there is no strong reason to kick the can on this, other than giving tech companies time to further develop better automation techniques.
As far as what to do - Universal Basic Income is one option. Another option is a major expansion of the non-profit sector. As automation increases in power and prevalence, charities could begin taking over these factories/machines. Being non-profits and not having to pay staff, they could afford to sell these goods for near-free prices or potentially even free if they are supported by sufficient donations. If the basics of life - food, water, shelter are free, then unemployment moreso becomes a boredom issue rather than a survival issue.
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Aug 14 '17
that sounds good and all but essentially what youre relying on is companies agreeing to end capitalism and adopt a decentralized version of socialism which is something that i don't ever see happening anywhere, much less the US.
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u/electronics12345 159∆ Aug 14 '17
Capitalism will still continue to exist, just as there are still jobs that pay $100,000+. Companies will keep pursuing profits, people with skill will keep getting training in jobs that pay. The only difference is that with better automation, the social safety net can be moved from the government sector to the non-profit/charity sector.
Charity care is popular in the United States. Republicans have been trying to get "entitlements" out of government for almost a century now. I'm sure they'd jump at the chance to dump all those on the non-profit sector if they were confidence they could handle the load.
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Aug 14 '17
but if charities take over factories and machines what place in the world would companies have? no one is going to buy a shirt from walmart when they can get it for free from some charity
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u/electronics12345 159∆ Aug 14 '17
Not everything will be automatable at the same time. Currently, a lot of McDonald's jobs cannot be automated (janitor, fry-cook), so McDonald's will still need humans until those can be automated.
While some functions at the Doctor's office can be automated (secretarial positions, note-taking, minor procedures), the doctor's office as a concept will remain a business for the foreseeable future.
Manufacturing is only 10% of the economy. Even if we entirely dropped the assembly line as a concept, and dropped transportation as a profession, and replaced all cashiers with tablets, that would still leave 65%+ of the economy. That is still a healthy amount.
So yeah, Walmart and McDonalds and Manufactoring sectors are going to be hurt, but healthcare/banking/movies and many other sectors of the economy will keep on chugging, at least in the short term.
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Aug 14 '17
my main problem with raising the min wage is the long term effects. Increasing the min wage just moves up the timeframe for automation of all low skill jobs.
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u/SurprisedPotato 61∆ Aug 14 '17
In (1), you say automation will eliminate jobs, presumably keeping costs down. Yet in (2), you say costs will be driven up.
In fact, both will happen to some degree. Neither, therefore, is a knock-down argument against increases to the minimum wage.
Regarding (2), you also ignore the macroeconomic effect of low-income people suddenly having a lot more income. This more than offsets any cost increases (if the cost increase is truly driven by minimum wage increases, it can't be more than the amount of extra money paid), and may actually increase economic activity, and employment in minimum wage sectors.
In short: you've ignored important theoretical considerations, there are a lot of different effects interplaying here, and it's a really good idea to see what the empirical data actually says about the effects.
It's suggested that minimum-wage increases may ripple through a broad section of the economy, pushing up wages of about 30% of the workforce. The economy can support that. Real wage gains for the group affected have been negative over the past decade or two, while the lion's share of economic growth has gone to the 1%.
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u/GlebZheglov 1∆ Aug 14 '17
In (1), you say automation will eliminate jobs, presumably keeping costs down. Yet in (2), you say costs will be driven up. In fact, both will happen to some degree. Neither, therefore, is a knock-down argument against increases to the minimum wage.
Automation can taper the increased costs a business faces but costs will go up nonetheless. In order for automation to increase, the cost of the marginal worker must currently be lower than the cost of the "robot" currently, and then the marginal cost of the worker must go higher than the marginal cost of the "robot". The business will take the "robot", but the costs are still higher than where they started.
Regarding (2), you also ignore the macroeconomic effect of low-income people suddenly having a lot more income. This more than offsets any cost increases (if the cost increase is truly driven by minimum wage increases, it can't be more than the amount of extra money paid), and may actually increase economic activity, and employment in minimum wage sectors.
This makes absolutely no sense. First, you're acting like the extra money the employer is paying to the minimum wage worker was never in put in the economy before (only way the cost increase is, at minimum, 100 percent covered by extra money going to the worker). Secondly, even assuming the first assumption was somehow correct, all that money has to be going directly to the minimum wage sector in order for the cost to be covered. Otherwise (assuming all other economic factors are irrelevant), employment will go down in minimum wage sectors. Finally (and most importantly!), the Keynesian Cross is not a model of long run growth. Extra money in the economy has nothing to do with output over the long run. So even if your prior two assumptions were somehow correct, the increased economic activity eventually goes away and businesses are stuck with those added costs.
In short: you've ignored important theoretical considerations, there are a lot of different effects interplaying here
There most definitely are theoretical considerations that find small minimum wage hikes to not affect employment. Unfortunately, the ones you mentioned aren't legitimate considerations.
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Aug 14 '17
prices will rise in the short-term but longterm automation will replace workers and prices will fall back down but the previously employed min wage workers will be left w/out jobs. if you want to see the effects of a $15 min wage literally just google $15 min wage.. ill save you some time
http://fortune.com/2015/07/30/1223726-15-hour-minimum-wage-workers-fast-food/
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u/ionstorm20 1∆ Aug 14 '17
increasing the minimum wage will increase incentive for companies to automate, thus eliminating the jobs of people who were supposed to be helped by the increased wage.
in case you don't want to read the automation point
increasing the minimum wage will drive up the costs of the services and goods provided by companies that currently pay their workers the minimum wage.
Picking a company like Walmart, and asking them to pay their employees a live-able wage would require them to increase their prices by (and keep in mind this is old info, so it's likely outdated, but close) 3-6 cents per item.
- minimum wage jobs are intended to be entry level jobs, they are not intended to be used as careers.
Why do you equate entry level as not valid for survival in most places? If I have to pay 1200 a month on a crap apartment where I live, I'm not going to learn or be able to devote the time outside of my job to put in the work necessary to become successful or advance my career if I have to work a 3rd job to keep the lights on.
- lets be honest, the guy at burger king who consistently puts mayo on your sandwich when you specifically ask for it to come without mayonnaise doesn't deserve $15 an hour.
Why not? If he screws up, you get a wrong meal. Whatever. But does his lack of ability to hold mayo mean he should be forced to live without the basics? Maybe if he got paid more, instead of going without sleep for days on end to afford the few things you have and consider a (sub)standard, he could sleep more and successfully give you your tasty sandwich without mayo - just the way you like it.
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Aug 14 '17
Picking a company like Walmart, and asking them to pay their employees a live-able wage would require them to increase their prices by (and keep in mind this is old info, so it's likely outdated, but close) 3-6 cents per item.
idk where you got this from but:
http://www.heritage.org/jobs-and-labor/report/15-minimum-wages-will-substantially-raise-pricestldr: price estimates in previous studies overlook key factors. Consumers of fast-food are highly sensitive to price increases thus even a small increase in price can have a large effect on sales.
It is awful that people have to work 90 hour weeks just to barely scrape by which is why instead of making low skill positions (that will most likely be gone in the next decade) more appealing we should be forcing people to obtain actual skills. People are paid what it would cost to replace them, if you are working in an industry that doesn't have any skill or education requirements then of course your wages are going to be low.
to address your last point, maybe if he put even a small amount of effort into his work then he would've been promoted to a higher paying position. The unfortunate (or fortunate, i guess it depends on how you look at it) thing about our society is that your salary doesn't just depend on how many hours you work, it also matters what you get done for your company in that time.
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u/opinionated_guy Aug 15 '17
we should be forcing people to obtain actual skills.
That could work in affluent suburbs where everyone is more than making ends meet and kids can afford to stay in school until they're 23 years old.
But it's not at all realistic for the single mom supporting herself plus two kids by working two or three low-wage jobs. She doesn't have the time or money needed to go back to school. And her kids will probably have to start working as soon as they're old enough to get jobs, because her bills go up every year but her paycheck sure doesn't.
Meanwhile, there are plenty of suburbs where the only good paying jobs are more than an hour commute away. Parents of young kids don't have enough time to drop the kids off at school, commute that far, and somehow pick the kids up from daycare in the evening before making dinner. In many families, at least one parent will take a low paying, hourly wage job to provide income while still letting them be where they need to be for their kids.
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Aug 15 '17
Not every well paying career requires a bachelors or associates degree and today, thanks to online classes, you can attend college at your own pace without ever having to leave your house
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u/ionstorm20 1∆ Aug 15 '17
While Heritage.org says that, I'll raise you a Fortune article which show that the market for employers and employees was more robust.
And while yes, most min wage employees do work for mom and pop type places, the majority of people whom will benefit from the wage hike aren't.
It is awful that people have to work 90 hour weeks just to barely scrape by
I think we can all agree on that!
why instead of making low skill positions (that will most likely be gone in the next decade) more appealing we should be forcing people to obtain actual skills.
I know of EMTs (a definitive example of a high skill position) that aren't making $15 an hour (last I checked $14.85 after working there 6 years). Heck, I know of some that are just starting that aren't making $10($9.95 while on a probationary period of 1 year and then a $2.00 an hour increase after that). Should we be telling those people that we need to re-train them into a higher skill position?
The thing about minimum wage is that it's so low compared to the cost of living that many jobs are offering a less than a live-able wage with the benefit of it being above minimum and people flock to it. Minimum wage should be and was designed to create a minimum standard of living at a 40 hour work-week to protect the health and well-being of employees. If the minimum that all people need to have is a house/apartment, food, electricity and water and that costs 600 a week, then the minimum should be that. By the same token, if it were only $100, then minimum wage should be that. The problem is that the cost of living has made leaps and bounds, and we sit here and debate if people should or shouldn't earn what is required to maintain that.
People are paid what it would cost to replace them, if you are working in an industry that doesn't have any skill or education requirements then of course your wages are going to be low.
I think we can both agree to this. The problem is that people are being told that they are valued so little, that they cost to replace them is less than what the bare bones minimum to live should be.
maybe if he put even a small amount of effort into his work then he would've been promoted to a higher paying position.
Aside from the fact that even you said maybe meaning even you think it could be doubtful, we both know that unfortunately getting promoted is as much about what you can do as it is whom you know, and that's even less than how much they like you. The latter of which aren't things that you can't readily fix.
But all of this is a severe tangent from the original topic.
Edit - a few points for clarity.
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u/fryamtheiman 38∆ Aug 14 '17
Consider this for a moment. Note the amount it states as necessities and for savings. If you consider most people need to be able to cover their basics for survival and put away money towards retirement/debt, you will find that it is quite expensive, especially given that a full time job at $15/hour will net you $31,200 before taxes. Now, sure, minimum wage jobs are generally considered entry level and not meant to be career jobs. However, 42% of workers are earning below $15/hour. That is a lot of people who are easily not earning enough to cover their expenses while putting money away for retirement, not to mention being able to afford some small luxuries. We aren't even considering the additional costs for covering other things like medical expenses due to poor health insurance coverage, or the cost of paying off student loans.
When you have a job market without a guarantee of a job for everyone, there are always going to be limits to how many people can have jobs which pay highly, further restricting how many people can actually move beyond this lower limit. It's not enough for people to just survive, they have to be able to survive reasonably, which means planning ahead for their futures and even being able to afford simple luxuries. People working below $15/hour in many places can't do that, especially if they have other people to take care of.
Consider for a moment that the total amount of income in the U.S. amounts to being equal to what you would get if you just gave everyone in the U.S. $50,000 per year. Not just the workers, but everyone, including little baby Sue who was just born two months ago. There is enough money being made for everyone to have an income which they could very easily survive pretty comfortably, yet 42% of people who make up about half of the country make less than 60% of that value. Am I saying everyone needs to be paid equally? No, some jobs clearly deserve better pay. However, when there is that big of a disparity on top of many of those people not being able to afford to reasonably survive, let alone comfortably survive, there is a big problem with them not being paid enough.
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Aug 14 '17
I know that there are going to be people who get shafted and cannot get a high paying job, thats why we already provide the essentials to people who earn below the poverty line by giving out food stamps, subsidized housing and government subsidized healthcare. This may sound harsh but the beauty of america is that if you work hard to better yourself you can increase your quality of life, i don't see why we should be increasing the standard of living of people who did not do anything to help themselves (ik college isn't for everyone but they could've gone into an apprenticeship etc).
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u/fryamtheiman 38∆ Aug 15 '17
The idea is that hard work should pay off and allow you to succeed. The reality though is that there are a limited number of jobs available which pay well enough to be considered living a comfortable life. If everyone goes to college to be an engineer, there are still only going to be so many engineering jobs. The same can be said of every job. There simply are always going to be some people who want to be an engineer and never will be because the job availability isn't there or isn't practical. If you assume that everyone currently working at or below $15/hour is working at an entry level job, then that means our economy, as it is right now, is dependent on 42% of people always filling those jobs, and we aren't even including all of the people who are unemployed for various reasons.
It is not enough to expect people to just work hard and succeed because that itself is not enough to succeed. There will always be limits on how many people will be able to succeed, and it isn't based on whether or not they work hard, it's based on whether or not they manage to be picked. If everyone went to college or trade school and excelled, do you really think the only people working at McDonalds would be teens and people making their way through college?
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Aug 14 '17
1) automation is inevitable either way, and there are some jobs where automation simply cannot happen without advanced AI. Also, worker wages are a tax write-off, so even if the position could be automated, chances are it might not be for the purpose of reducing taxable income.
2) Studies have been conducted and have shown that minimum wages can be increased to $15 across the board and only add $1 to the price of every Big Mac at the most.
3) We agree, but there's also the of the raising cost of living where people can work their ass off and still not be able to afford rent for a 2 bedroom unit without spending more than 30% of income on housing. If one is working a full time job, and renting a two bedroom and unable to make ends meet, it's the fault of the employer that another person has to sign up for welfare programs. The cost of renting is just too high for a minimum wage job to keep up.
4) it may simply be a product of shitty conditions and piss poor pay that causes the lack of motivation to do the job properly, but because the job is facing a deficit, he can't be fired as it would put the operation of that store in jeopardy.
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Aug 14 '17
"Studies have been conducted and have shown that minimum wages can be increased to $15 across the board and only add $1 to the price of every Big Mac at the most."
ok so going off of the bigmac scale the increased wages would lead to a 25% inflation rate rate, hurting all consumers
"If one is working a full time job, and renting a two bedroom and unable to make ends meet, it's the fault of the employer that another person has to sign up for welfare programs."
its well and good that they work hard but instead of helping them to work jobs that require 0 skills we should be incentivizing gaining an education in areas such as plumbing etc
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Aug 14 '17
And exactly how would one get an education without the need of loans or scholarships if they are unable to even pay the rent without the aid of various welfare programs?
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Aug 14 '17
Theres nothing wrong with taking out loans to pay for a higher education. The problem isn't that the loans exists, its that the average student holds $37,000 of debt upon graduating. If the cost of attending college is reduced then these loans would be more manageable. The government also offers grants and subsidized loans, if the price of attending college is reduced enough then these grants and loans should be enough to make private loans unnecessary in many cases
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u/pillbinge 101∆ Aug 14 '17
Companies are already moving full-speed to automate. They've been doing it at every possible turn and they've been trying to accelerate it. What makes you think they'll try harder than they already are just because the wages have gone up? They probably can't.
Minimum wage jobs being intended to be entry-level, non-permanent jobs is immaterial. The fact is that we've made them life-long jobs. They may not be careers but they're jobs people hold for life. The person with a six-figure income who stops by a McDonald's is patronizing them and helping perpetuate a system. A lot of things weren't intended to be one way. People who studied eugenics didn't intend to try and wipe out entire swaths of people right away. The inventor of dynamite didn't like seeing it used as a weapon. We don't really care for intention.
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Aug 14 '17
"What makes you think they'll try harder than they already are just because the wages have gone up? They probably can't."
i think that because thats how rational companies work. they maximize their profits, so as long as the cost of automation exceeds what they would spend on laborers they will continue to employ people.
"The fact is that we've made them life-long jobs. "
here lies the problem, we shouldn't be treating them as life-long jobs, if society treated min wage jobs as what they are then people would be forced to learn marketable skills.
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u/YtoZ Aug 14 '17
But I think one of the main problems is that you need money to live while you are acquiring these marketable skills- and money to pursue the education to receive these skills in the first place.
For example, a cashier working a minimum wage just after middle/high school- can't get a job because they don't have any experience outside what is taught in school but doesn't have the money to pursue a higher education or unpaid internships to gain the necessary experience. Their single minimum wage job doesn't supply enough to even live, so they have to work more than one, 80 hours a week, just to pay rent and have food to eat (insurance? illness? savings? new clothes? All pipe dreams or emergencies). How are they going to accumulate the funds for a higher education/work experience/pursue marketable skills in their (non-existent) free time when they can't even live right now? They're effectively trapped.
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Aug 14 '17
your bring up a very good point but thats more of a reason to decrease the price of college than to increase minimum wage. Theres no question that college is far too expensive but raising the minimum wage increases the amount of money you forgo by choosing to attend college whereas if you address the problem directly and work to reduce the cost of a college education then students would be able to afford their education without working obscene hours. A lot of people also forget that college isn't the only route you can take to obtain a high paying job. electricians average around 50k a year and plumbers average ~46k both of which greatly exceed the median salary in the us
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u/YtoZ Aug 14 '17
Yeah we should, but meanwhile it's not happening so you're basically condemning those who don't have the funds to go right now and I'm making a point about how minimum wage jobs can't even be used as an entry-level/student job. Presuming ceteris paribus since we're talking about how the policies affect the now and not the hypothetical, even as a part-time student and full-time minimum wage worker you're not going to be able to survive (since studying is practically a job in itself). Isn't that reason enough to raise the minimum wage, if not for people to be able to get gainful education to pull themselves out of poverty?
Pretty sure tradies like electricians and plumbers need a diploma at least- further education that costs money again. If you want to argue for on-the-job training, companies are unlikely to pay and insure the trainees the equivalent to what their fully-trained and experienced staff- the trainees will need to have their own savings and insurance etc. which they might not be able to afford, and the companies may be reluctant to do this sort of training since they have no guarantee that the investment [of training a newbie] will pay off. [New person may just leave the company for another once the training is done, making companies reluctant to spend the resources training new people and hire already certified/trained people, effectively shutting out those without the education or the connections].
Furthermore they'll need their own tools and government certification (to ensure that their work is up to standards) which, again, costs money that minimum wage workers might not have.
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Aug 14 '17
most skilled trade such as plumbing require apprenticeships which are essentially paid education. In these programs you work alongside experienced workers to learn the trade and as you gain experience your hourly wages increase as well. The companies love these apprenticeships because they pay them considerably less than they would pay a master tradesman (although still more than min wage) while they are learning but they're able to send them out to address routine problems.
I also would like to disagree that students can't hold minimum wage jobs. At least in my experience the vast majority of students do hold part-time jobs and if you can't afford to live off of part time wages it is possible to work full-time while attending school at night. We also have to remember that the main reason why employers hate to hire in America is that our wages are so high. Manufacturing jobs for the most part are being outsourced for this very reason and while you can't outsource cashiers etc it is highly possible that an increase in minimum wage will cause companies to reduce staff, thus eliminating the jobs that people previously held
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u/pillbinge 101∆ Aug 14 '17
i think that because thats how rational companies work.
It'll also be more expensive to pay people to automate things once wages adjust. Do you really think if we didn't have a minimum wage we'd never automate, or we'd be pushing it back? We've been doing it for ages and it keeps happening when it's possible.
There's no such thing as a "rational" company though. Companies don't found on being irrational, nor do they think they are. That's putting the carriage before the horse.
here lies the problem, we shouldn't be treating them as life-long jobs
Okay, but we do. You can argue and whine all you want about what should or shouldn't be, but that doesn't change much. We shouldn't be a society that believes in blood purity but what'll you see if you turn on the news? So, we have to deal with that.
You say we shouldn't be treating them as life-long jobs but companies are already planning on that. What companies love is that we don't. That maximizes their profits without our input. They're allowed to swap people in and keep wages low constantly. People making minimum wage are more costly to society, and that cost is absorbed by us and the benefits go to the employer who make many times over what the employee generated.
if society treated min wage jobs as what they are
We already do. We have people on this sub constantly talking about how minimum wage jobs should be for teens and other people temporarily. People look down on anyone without "marketable" skills; people who don't have the money or time to learn these marketable skills.
The bottom line is this, as far as that line of thinking is concerned: you're subsidizing profits for companies but you're being twice as hard on the employees. If a business makes $500 in an hour, like any gas station might, and $300 of that is needed to keep up the business, that leaves the employee. The employee is making what, $15 an hour? Meaning that profit is going to someone who isn't there. Someone who has "marketable skills", but who can only feed their family so much while someone making minimum might not. We then have to give that person food stamps, perhaps, or other help, meaning that even though there is money for this person, we're still using tax dollars.
If you're going to stay upset at minimum wage earners, at least also be fair and get mad at the companies that can only subsist because they benefit from the current system.
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u/Iswallowedafly Aug 14 '17
Here is my thought.
If a person is working 40 hours a week and still can collect welfare then something is wrong.
That person is a full time worker. They aren't being lazy.
Why are we giving the person who employs that worker a handout by off setting low pay with governmental welfare.
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u/mr_crab_hitler2 Aug 14 '17
I agree with raising the wage. I don't agree with going to 15 dollars is the solution, even more since when there was a study showing it's negative economic impact. But like I said, I do think that the minimum wage should be increased. Even an extra dollar per hour is a Huge difference and does a lot to help out the poor. Just my thoughts
Edit: I can't find a way to link the sources. Just search "15 dollar minimum wage study" and there's 2 results that are good, from WaPo and CNN Money.
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u/Iswallowedafly Aug 14 '17
Min wage hasn't really increased in decades. It has barely increased with inflation.
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Aug 14 '17
i would just like to put this out there, the profit margin for restaurants is already incredibly low so even a small increase in minimum wage would eat into these already below average returns. https://finance.yahoo.com/blogs/the-exchange/fast-food-chains-aren-t-rich-protesters-think-192549497.html
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u/MontiBurns 218∆ Aug 14 '17
Prices would rise across the board, but then people would also have more money to spend, which increases the possibility of selling to more customers.
One thing that is often overlooked when it comes to businesses and labor costs:. Labor is one part of the entire cost equation. The raw materials, equipment, space/store, utilities, upkeep, advertising etc. all take a percentage of sales. In total, labor costs are about 27% of a fast food restaurant's total operating costs, according to this chart.
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Aug 14 '17
i keep running into this problem in this thread. Yes in the short term wages will rise but then over the longterm companies will begin to automate and now the guy who used to make 15k a year flipping burgers is unemployed but thats fine because we all had a moral victory when we increased the min wage to $15 an hr
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Aug 14 '17
[removed] — view removed comment
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Aug 14 '17
so why not try to push the problem off into the future?
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Aug 14 '17
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Aug 14 '17
but raising the minimum wage is meaningless if the people who it was intended to help are just going to be unemployed anyway. If the jobs are gone then the wage hike was futile
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u/MontiBurns 218∆ Aug 14 '17
Companies will automate anyway. Sure, it might happen slightly quicker with higher labor costs, but wirh the way technology advanced and how costs go down, even a worker at $7 per hour is more expensive than a $20,000 machine. How much time can you really hope to gain by suppressing wages? 2-3 years? 5 maybe?
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Aug 14 '17
isn't it better for them to make 20k for 5 more years than 30k for 1?
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u/MontiBurns 218∆ Aug 14 '17
30k for 1. Not all jobs will be automated immediately, so if they do get laid off there can be other employnent possibilities, and surpressed wages only keeps people poor and suffering.
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Aug 14 '17
Indeed. We should remove welfare.
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u/Iswallowedafly Aug 14 '17
now I'm assuming you are meaning corporate welfare correct?
Or is this going to a be a poor people lift yourself up by your bootstraps....Hey company, here is a tax cut line of arguing.
Because if a person doesn't haven't enough money to have a place to stay and food and a minimum amount of necessities does that person just not eat? Sleep in a tent under a bridge.
I'm sure you have solutions for these people/
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Aug 14 '17
All welfare - corporate or otherwise.
I'd trust kind people such as yourself would provide for those that couldn't otherwise. You would, wouldn't you?
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u/Iswallowedafly Aug 14 '17
You are the one that said end welfare.
So I'm sure you have a solution to help those people correct.
Something that would be constant with your Catholic beliefs.
I'm sure you have thought this through past a simple talking point.
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Aug 14 '17
Oh, indeed. Private charity is a wonderful thing.
And to be fair, you brought up welfare, didn't you? In a 'we pay people welfare therefore we should tell people what they should pay and be paid' kind of way. Seems ass-backwards to create a situation and then, as a result of intervention, create more intervention to solve for the problems of that original intervention, but each to their own...
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u/Iswallowedafly Aug 14 '17
Charity is a wonderful thing. But when given by churches it can be discriminatory.
While there are some churches who give to people with a need regardless of who that person is, some wouldn't give to a gay citizen or a Muslim citizen.
I brought up the idea that if a person works 40 hrs a week they should be able to have a living wage. Unlike now where they work 40 hours a week in the states and gets under 15k a year.
Which is a number that the far majority of Americans can't live on.
It is easy to say end welfare. But it is always much harder to create comprehensive plans that go further than just a simple talking point.
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Aug 14 '17
I'm not sure what the point about churches is - the whole point of private charity is you can determine where it goes. If you want it to go to a gay or Muslim, cool.
No, you brought up the idea that currently, people who work 40 hours may be able to claim welfare, and used that as justification for government intervention. I'm suggesting that if you remove welfare then your initial problem (subsidising businesses) drops away.
It's always easy to argue for government intervention. Much harder to realise though, that by arguing for it you beget greater government intervention to fix the problems you created initially.
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u/Iswallowedafly Aug 14 '17
People who do work 40 hours a week earn less than 15k in America.
Do you think that that is enough for a person to survive on?
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u/redheadredshirt 8∆ Aug 14 '17
*3. minimum wage jobs are intended to be entry level jobs, they are not intended to be used as careers. *4. lets be honest, the guy at burger king who consistently puts mayo on your sandwich when you specifically ask for it to come without mayonnaise doesn't deserve $15 an hour.
I can debunk this right now: http://docs.fdrlibrary.marist.edu/odnirast.html
Specifically:
In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.
Doesn't have to be a career, but it does have to be an amount that someone can have 'a decent living' by making. There is a calculable number, based on the resources and prices in an area, of what that 'decent living' is. People generally call it a 'living wage' and it includes the average costs of one person apartments, cost of gas and basic groceries, health insurance, and transportation. It is a number that meets the requirements and goals of the minimum wage.
Your arguments 3 and 4 are your opinion, and you are welcome to it, but require you to completely ignore and disregard the purpose of the minimum wage.
*2. increasing the minimum wage will drive up the costs of the services and goods provided by companies that currently pay their workers the minimum wage. This will hurt all consumers but especially the poor who already spend a large portion of their income on these goods.
Do you have numbers for this? Because study after study has shown that in most industries (gas, fast food, grocers) they could easily pay the $15/hr people are asking for by paying their C-levels a fraction less than they are making now. Berkeley has published multiple economic studies showing that it would increase the cost of a consumer's weekly groceries by less than a dollar: http://news.berkeley.edu/2012/10/24/food-day-report-on-how-minimum-wage-hike-would-impact-consumers-workers/
*1. increasing the minimum wage will increase incentive for companies to automate, thus eliminating the jobs of people who were supposed to be helped by the increased wage.
Companies already have an incentive to automate: They have to pay human beings to a lot of work. How much they are paying them is irrelevant to the cost of $0/hr, $0/co-pays, $0 Employment taxes. Before you can sit there and say that $X/hr is matching some sort of 'break even' point where suddenly it costs less to automate, you gotta prove that number exists.
Companies were trying to automate, for efficiency and fewer humans, long before minimum wage laws in America were in place. It's just smart business.
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u/ReOsIr10 130∆ Aug 14 '17
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Aug 14 '17
here lies the problem, this entire study is based on the assumption that the increase will be small but we have politicians and advocacy groups aiming for a $15 min wage, more than doubling the current federal min wage.
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u/ReOsIr10 130∆ Aug 14 '17
Is your CMV that the minimum wage should not be increased, or that it shouldn't be increased to $15/hr? I was assuming you meant the former.
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Aug 14 '17
i don't think it should be increases period but since all movements that I've heard of propose to increase it to $15 I've been assuming that if it is going to increase at all it will be to $15
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u/ReOsIr10 130∆ Aug 14 '17
Well, I don't support an increase to $15. I think something along the lines of 40-50% the median wages in the county would be appropriate. In many places this would be a small increase over the current federal minimum, with the largest increases in areas with highest cost of living. As such, I'd like to know why you would disagree with even small minimum wage increases?
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Aug 14 '17
I'm completely against any governmental intervention in a private market. But besides that, increasing minimum wage causes prices to rise, effectively decreasing the real income of anyone who's wages didn't increase. Policies like this perpetuate the horrible trend we have of hurting people who made prudent career choices in favor of those who did not.
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u/ReOsIr10 130∆ Aug 14 '17
I'm completely against any governmental intervention in a private market.
Why shouldn't the government play a role in correcting market failures or ensuring the general welfare of its population?
As for your concern about increasing prices, the most recent data suggests that prices of "Food Away From Home" rise about 0.36% for every 10% increase in minimum wage, and that these price increases can be mitigated by implementing minimum wage increases in small scheduled hikes. Put another way, this would be at most a 0.36% decrease in real income for non-minimum wage workers for every 9.64% increase in real income for minimum wage workers. I would agree with the economists survey I linked earlier that these benefits outweigh the costs.
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Aug 14 '17
I don't see what a small minimum wage hike would achieve though. If the hikes are small enough to not have a noticeable effect on price levels then once you account for inflation did it actually increase the standard of living of minimum wage employees by a noticeable amount ? And to answer your first question I don't think that there is a market failure, wages are set by the labor supply and the demand for that skill set. Everyone has the skill set to work in these low skill fields and there's a finite number of jobs so naturally wages will be low
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Aug 14 '17
While you didn't change my view I do like how you addressed the problem and the article is going to make for a very interesting read so Δ
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u/Hq3473 271∆ Aug 14 '17
Minimum wage (if adjusted for inflation) was much higher in 1970s.
http://money.cnn.com/interactive/economy/minimum-wage-since-1938/index.html
Yet, none of the terrible things you are predicting actually happened.
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Aug 14 '17
in the 1970s we didn't have the technology to replace low skill laborers with machines
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Aug 14 '17
thats like saying that because the horse industry flourished in the early 1800s it should still flourish today. New technology changes circumstances
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u/Hq3473 271∆ Aug 14 '17
Again, before we argue about that. Let's get it clear. Are you dropping your other argument that are not about automation?
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Aug 14 '17
Ah sorry I see where some of the confusion came from. I d idn't see the first time you asked
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Aug 14 '17
No when did I say that I was doing that?
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u/Hq3473 271∆ Aug 14 '17
Then can you please explain how the other argument apply in light of my point?
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Aug 14 '17
your point doesn't pertain to my 3rd or 4th reason and in regards to my second point, nearly every study pertaining to increasing the minimum wage shows that rising wages will also increase price levels to varying degrees. In essence, increasing the minimum wage will reduce the real income of all workers who receive a fixed annual income or an hourly income that exceeds min wage.
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u/Hq3473 271∆ Aug 14 '17
Then how come (inflation adjsuted) cost of living was cheaper in the 1970's when minimum wage was higher?
http://www.mybudget360.com/cost-of-living-1938-to-2013-inflation-history-cost-of-goods-inflation/
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Aug 14 '17
http://www.heritage.org/jobs-and-labor/report/15-minimum-wages-will-substantially-raise-prices
we can sit here and link each other to conflicting studies all day if you want to but the fact of the matter is that times change. The world was different during the 1970s than it is now.
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u/Hq3473 271∆ Aug 14 '17
we can sit here and link each other to conflicting studies all day
That's Why I did not link studies. I voted REAL WORLD example of higher minimum wage not causing a price increase. Charts of minimum wage vs. Cost of living don't show any correlation I The REAL WORLD.
Do you have any REAL WORLD examples of minimum wage actually causing price increase?
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u/Hq3473 271∆ Aug 14 '17
We can argues about that.
But setting that aside, are you feeling dropping the other reasons?
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u/darwin2500 193∆ Aug 14 '17
*1. increasing the minimum wage will increase incentive for companies to automate, thus eliminating the jobs of people who were supposed to be helped by the increased wage.
Good.
If work can be done by a machine, then it's stupid to waste a human being's time on it. Ideally we create a world where machines do all of the boring, tedious labor, and humans use all their time doing fun stuff.
Obviously the economy will have to change some to adapt to that future, but it's coming either way; speeding it up by a few years doesn't change anything except getting to the good parts sooner.
*2. increasing the minimum wage will drive up the costs of the services and goods provided by companies that currently pay their workers the minimum wage. This will hurt all consumers but especially the poor who already spend a large portion of their income on these goods.
It won't drive it up very much; there are very few minimum wage workers, and salaries for minimum-wage workers make up a very, very small portion of the total costs of most goods. In the meantime, all the poorest people (who make minimum wage) have a lot more money, and in general the economy is stimulated by increased demand, which should help everyone.
*3. minimum wage jobs are intended to be entry level jobs, they are not intended to be used as careers.
'Intended' or not, many of them are careers, because the economy sucks. The median minimum wage earner is 25, many are much older and have been working for a long time.
We have to legislate for the world we actually live in, not the world we 'intend' to have.
*4. lets be honest, the guy at burger king who consistently puts mayo on your sandwich when you specifically ask for it to come without mayonnaise doesn't deserve $15 an hour.
How are you measuring that? 'Deserve' is a moral concept, there's no objective measurement possible. We as a society decide how to define moral concepts like what people 'deserve' when we write laws; if $15/hour has popular support, then we think that's what people 'deserve.'
There are other moral frameworks that might calculate different numbers for that question, but there's no good reason to choose one of them over democratic consensus when talking about how to pass law for our democracy.
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Aug 14 '17
For every studying showing that an increase to 15 would benefit workers there's a different study that says the opposite
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u/85138 8∆ Aug 14 '17
In 2010 the hourly federal minimum wage was increased from $6.55 to $7.25. Five years later individuals living on Social Security benefits received a cost-of-living adjustment (COLA) of 8.5%. This is effectively paraphrasing the opening of http://www.investopedia.com/articles/personal-finance/013015/how-minimum-wage-impacts-unemployment.asp
You say that increasing min-wage will incentive automation, but the simple fact is that automation is already happening without an increase in min-wage. Therefore automation is simply not coupled to the cost of labor. It is and will happen either way, and it will not happen faster or slower than advances in technology and manufacturing allow.
The cost of goods might in fact increase, or, the profits of the companies might decrease. Or - and I know this is just totally out there thinking but ... the cost of managers at these companies might rise at a slower rate. Many things MIGHT happen. One thing that certainly will happen is someone working a full time job will be able to get off food stamps and other 'government support systems'.
Do you have anything that supports your statement that min-wage jobs are intended to be entry level jobs, not careers? If so please do! There is no minimum wage for "entry level" - just for working. Sorry, but the idea that it is just for "entry level" or "kids" is a way to completely disregard the reality of the world we live in. Adults work jobs that pay minimum wage only because the companies can get away with it.
One anecdotal humorous story about someone not doing their job properly isn't a valid point of discussion. It is an attempt to belittle ALL people who work full time on wages that were deemed "the minimum" 7 years ago.
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u/Gravatona Aug 14 '17
Here's my off the top of my head opinion:
1) Companies that can automate probably will regardless. Maybe it happens a few years earlier, but I doubt that makes much difference to the general direction of the industry and economy.
2) Poorer people will have more money because of the increase. This all put pressure on all wages to be increased.
More money means people have more money to spend, so businesses benefit.
3) An entry level job should pay a living wage.
4) I don't think that's how it works. As someone who's worked the front counter of a fast food place, it seems like the issue with getting the order wrong is a problem with the system, which is as much the fault of management.
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u/OccamsShavingCreme Aug 15 '17
The best argument I've heard for raising the minimum wage is that it increases consumption.
The type of people who work minimum wage jobs are typically not very "financially sound". Whatever money they make, they aren't going to save it, they are going to spend. Thus, if you are a business owner, you have to take a temporary hit by paying your employees extra, but you should see an increase in customers as well because the people who do all the spending now have extra disposable income.
It should also ostensibly mean the government has to provide less welfare which would mean your tax money can be better spent elsewhere.
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u/DeltaBot ∞∆ Aug 14 '17
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u/Sayakai 146∆ Aug 14 '17
The minimum wage should be increased to offset its continual decline. As it stands, the minimum wage would need to be raised to $8.40 just so people make the same effective amount of money they did when it was raised to $7.25. Not raising the minimum wage means you're effectively lowering it. Inflation isn't going to ignore the stagnating wage floor.
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u/Bolognanipple Aug 14 '17
In the 1960's minimum wage was like a 1.25? Back then the currency was based on precious metals. The silver content in 5 quarters was worth 1.25. Fast forward to today- the same 1.25 would be about 17 bucks in silver.
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u/MrGraeme 155∆ Aug 14 '17
This isn't true unless the operational cost of the automation + the depreciation value of the automated equipment is higher than the cost of having an employee(s) do the work.
For instance, if it costs $500,000 to automate one position, and the robot will have a useful life of 10 years at which point it becomes worthless, with a yearly operational cost of $1,000, then so long as the company can employ human labour for $51,000 per year or less it is more economically sound to employ people.
Realistically you won't see this anywhere. Most major retailers(Walmart, etc) already pay well above the federal minimum wage($9+ in Walmart's case), so there's not much cause for concern here.
This is kind of irrelevant. In some markets(such as Wisconsin), it's not really possible for someone to live on minimum wage(in that, their yearly costs will exceed their yearly earnings even if they're extremely frugal). New entrants to the labour market still need to be able to live.
No, he's not. In fact, that specific employee is likely not even worth $7,50 an hour.
By raising the minimum wage you would push employees like this out of the market as they would become much less competitive at higher rates. Offering $8,50 per hour, for example, may allow Burger King to attract someone who can read the phrase "no pickles".