The Minimum Wage and Hourly Rates Thread

[Gameface]

Are you saying the economy in America is so robust (and this goes before the pandemic) that businesses, especially small businesses, can't afford to pay their employees a livable wage?

What's the point of living in a society if this is true?

 

[Handlogten's Heros]

Are you saying the economy in America is so robust (and this goes before the pandemic) that businesses, especially small businesses, can't afford to pay their employees a livable wage?

Some won't survive an increase of 50%-100% of their employee expense... so I guess in some cases... yes. It isn't just $5-7 and hour increase... it increases the employer side payroll tax.

I don't have the answers though.

 

[AlaskanAssassin]

The Fed doesn't create inflation here in America, what kind of nonsense is that?

(Arguably a notable driver of inflation in the last year or so during the pandemic, but certainly not the standard)

First off, the Fed has a specific inflation target each year. Do you honestly think they have no control or influence of the rate of increasing prices? Why set an inflation target if economic policy has no impact on inflation.

https://www.bls.gov/opub/reports/mi...centage of hourly paid,to 2.3 percent in 2017.

Second, the original meaning of the word "inflation" in economics meant to "inflate" the money supply. Note that prices can't inflate or deflate, but a supply of something (currency) can. Prices go up and down. Our modern use of the word has conflated inflation with a rise in consumer prices. A symptom of inflation is rising consumer prices.

With this in mind, I'm confused as to why the Fed creating inflation is nonsense..........

 

[AlaskanAssassin]

I disagree completely with #4.
At my job employees get the same wage regardless of productivity or how hard they work.

Also I have done much harder and more productive work at much lower paying jobs.

Frequently people are not paid based on their effort or productivity or whatever you want to call it.

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Effort and productivity are separate things. Someone can be giving maximum effort, but still deficient in productivity, or vice versa. When I suggest productivity, it refers to how much $$$ the employer can make off of you, or potentially your position in the company (likely a pool of employees).

Anyone who feels their time and productivity is more valuable than what their employer is willing to pay is free to seek other opportunities. If they are right, they are very likely to find someone that will pay them more. The example you give proves my point, you were previously in a job that required more production for less pay, and you left that job for one that now pays you more.

 

[AlaskanAssassin]

Employers are quite happy to pay well below the productivity benefit derived from the employee. There would be no internet billionaires if the CEOs were not deriving wealth from the productivity created by others.


Is this effect being seen in, for example, Seattle, which already has a $15 wage?

Well, the average salary at Facebook is $123K a year........yet somehow Mark Zuckerburg became a millionaire.

https://www.payscale.com/research/US/Employer=Facebook_Inc/Salary

Employees are always going to get paid less than their production. A business can't function otherwise. I personally don't see it as deriving wealth from another person's productivity. I see it as a reward for the risk undertaken, capital invested, or initiative and foresight to start a business. I suppose in reality it's a combination of the two.

Lots of mixed studies on the Seattle impact. I'm not sure Seattle is the best example study, considering its already high cost of living, etc. Results might be different in Kentucky, Alabama, Indiana, etc.

 

[AlaskanAssassin]

Note I just looked up, according to the studies I saw approximately 40% of working Americans earn under $15/hr, this would be a significant pay-raise for something like 1/3rd of the country.

Do people think that increasing the minimum wage is simply going to take money out of business owners hands, and give it to employees?

Every economic policy by government creates a reaction by the market. Business owners have invested time and capital, potentially taken out loans or engaged in other risk, are not simply going to move forward business as usual. They are going to take measures to minimize their losses (outsource, automate, raise prices, hire under the table, restructure the business, etc.).

Many companies will consolidate low-skilled jobs into a fewer number of jobs that pay above $15 an hour.

 

[fishonjazz]

Effort and productivity are separate things. Someone can be giving maximum effort, but still deficient in productivity, or vice versa. When I suggest productivity, it refers to how much $$$ the employer can make off of you, or potentially your position in the company (likely a pool of employees).

Anyone who feels their time and productivity is more valuable than what their employer is willing to pay is free to seek other opportunities. If they are right, they are very likely to find someone that will pay them more. The example you give proves my point, you were previously in a job that required more production for less pay, and you left that job for one that now pays you more.

But you were seeming to say that employers always pay people what they are worth.
I disagree with that

Also, lucky for me I lived in a place with a lot of opportunities and a strong economy. If I lived in butt**** wyoming I would probably still be making nothing.

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[AlaskanAssassin]

But you were seeming to say that employers always pay people what they are worth.
I disagree with that

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I would agree that people are not always paid "fairly", but someone's worth as a productive person is very subjective.

 

[idestroyedthetoilet]

To the part about paying $15 bucks to sweep the theater, I would argue yes, why not? Yes normally this is staffed by like high-school kids, but what about someone taking the job to make ends meet when there might not be anything else around? I think you cannot differentiate that way, or if you do then they need a sliding scale for school-aged workers, as I believe Utah has because 2 of my kids worked at Lagoon under this program at 14, and only promote that job to them, but if they can't find any, then they pay the minimum. Plus this is such a small part of the worker market to worry about. Just pay them the minimum like everyone else. A job is a job and it wouldn't be needed if it weren't making someone money somewhere up the chain.

We have EITC and a laundry list of programs that address this. Is there really a good argument that raising minimum wage to a living wage is better than targeting welfare where needed?

EITC, child tax credit, daycare tax credit, SNAP, housing assistance, utility assistance, all targeting programs.

Nobody has even gotten into a breakdown of who earns minimum wage and % in poverty earning it.

 

[Eminence]

Do people think that increasing the minimum wage is simply going to take money out of business owners hands, and give it to employees?

Every economic policy by government creates a reaction by the market. Business owners have invested time and capital, potentially taken out loans or engaged in other risk, are not simply going to move forward business as usual. They are going to take measures to minimize their losses (outsource, automate, raise prices, hire under the table, restructure the business, etc.).

Many companies will consolidate low-skilled jobs into a fewer number of jobs that pay above $15 an hour.

Do I think every single dollar from a minimum wage hike will go to workers - absolutely not. Do I think a meaningful amount of it will - yes.

 

[Eminence]

We have EITC and a laundry list of programs that address this. Is there really a good argument that raising minimum wage to a living wage is better than targeting welfare where needed?

EITC, child tax credit, daycare tax credit, SNAP, housing assistance, utility assistance, all targeting programs.

Nobody has even gotten into a breakdown of who earns minimum wage and % in poverty earning it.

There was a Senate report kinda related to this a couple of years back (not whether wages or targeted programs were better, but on who's earning what wages and what % are in poverty and qualifying for and using federal programs).

https://www.gao.gov/assets/690/687314.pdf

 

[idestroyedthetoilet]

There was a Senate report kinda related to this a couple of years back (not whether wages or targeted programs were better, but on who's earning what wages and what % are in poverty and qualifying for and using federal programs).

https://www.gao.gov/assets/690/687314.pdf

I've read similar studies over the years. One claimed only 3.2% work for minimum wage, and only 14% of families on govt assistance have a minimum wage worker. Now, the obvious problem with that one was not adding a higher tier, say up to $10/hr or so, so we get a broader picture.

These studies mostly paint the picture that those working for minimum wage largely aren't the needy, which is why I prefer beefing up assistance to the needy when necessary over a blanket increase of minimum wage to what many view is an outlandish number. Biden's new child tax credit, which was just doubled by Trump, is a good way to help the needy IMO (and also currently quite a bit overgenerous to those with children but not needy).