Anonymous wrote:Why can't they choose and amount like $15 and scale it to cost of living based on state or region? Wouldn't that be a reasonable compromise? The goal should be a living wage in every state. People should not have to work 2-3 jobs in this country to make ends meet.

Anonymous wrote:higher minimum wage = more automation displacing workers and fewer jobs for young people entering the workforce...

Argue as you might that those outcomes are fantasy but this is the truth.

When I was a kid I got my first W2 job at 15 when minimum wage was $2.25. The company had a policy to limit hours to 28 hours per week to avoid paying benefits from what I understood.
My kid just turned 16 and has been having trouble finding a job because many place will only hire people over 18 years old now. I stopped by my old job from high school the other day to ask if they are hiring and was told they still limit hours to 28 per week and will only hire if over 18 with at least a high school degree. The $15 minimum wage will simply lead to more selective hiring which will make the completion for the comparatively fewer entry level jobs more stiff.

Anonymous wrote:The argument that I hear from those opposed to raising the minimum wage is that it will cause employers to cut jobs.
However, it seems to me that the main impact is that it would cause pressure to raise wages for those currently making between $7.50 and $15 an hour.
Someone who currently makes $15 an hour isn’t going to be happy to find themselves as a minimum wage worker.

So if wages increases, inflation will increase causing those who will be making the new minimum to have roughly the same standard of living as they do now.
At least, that’s how it would seem to play out to me.

Can someone who has a better understanding of economics explain why raising the minimum wage wouldn’t significantly increase inflation, thus negating the benefit of a higher salary.

Anonymous wrote:

Anonymous wrote:The cost will be passed along to the consumer so the companies can keep making a comparable profit. In some states, the labor input to the price of goods will more than double. Some small businesses will not be able to stay in business because fewer people are willing to spend $7 on an ice cream cone as opposed to $4.50. My family is lower middle class and I know we will have to cut back on things like that if prices go up because our budget is very tight.

I do support an increase in the minimum wage but there are definitely costs.

Your math misses the mark, in part because it is the very rare industry where minimum-wage labor costs make up the bulk of costs of production. To use your example of the ice cream cone, let's say I run an ice cream shop. During a moderately busy time of day, I have two employees working who each earn $7.50 an hour. I sell about 20 ice cream cones an hour at your $4.50 price per cone. If I have to double my employees' salaries, that means I'm paying approximately an extra $15 per hour in labor costs. Spread over 20 ice cream cones, that's an increase of only 75 cents per cone without affecting my bottom line. If I'm marking up labor costs at 100% in setting my price per cone, that's still an increase of only $1.50 per cone, not $2.50. I don't have to mark up the labor increase that much if I'm concerned it will negatively impact demand for my ice cream cones, 75 cents is enough to cover the cost of a $15 minimum wage.

Anonymous wrote:The cost will be passed along to the consumer so the companies can keep making a comparable profit. In some states, the labor input to the price of goods will more than double. Some small businesses will not be able to stay in business because fewer people are willing to spend $7 on an ice cream cone as opposed to $4.50. My family is lower middle class and I know we will have to cut back on things like that if prices go up because our budget is very tight.

I do support an increase in the minimum wage but there are definitely costs.

Anonymous wrote:

Anonymous wrote:higher minimum wage = more automation displacing workers and fewer jobs for young people entering the workforce...

Argue as you might that those outcomes are fantasy but this is the truth.

When I was a kid I got my first W2 job at 15 when minimum wage was $2.25. The company had a policy to limit hours to 28 hours per week to avoid paying benefits from what I understood.
My kid just turned 16 and has been having trouble finding a job because many place will only hire people over 18 years old now. I stopped by my old job from high school the other day to ask if they are hiring and was told they still limit hours to 28 per week and will only hire if over 18 with at least a high school degree. The $15 minimum wage will simply lead to more selective hiring which will make the completion for the comparatively fewer entry level jobs more stiff.

You do realize that your $2.25 minimum wage back in the 1970s was equivalent to $20-something in 2018, right?

Anonymous wrote:

Anonymous wrote:higher minimum wage = more automation displacing workers and fewer jobs for young people entering the workforce...

Argue as you might that those outcomes are fantasy but this is the truth.

When I was a kid I got my first W2 job at 15 when minimum wage was $2.25. The company had a policy to limit hours to 28 hours per week to avoid paying benefits from what I understood.
My kid just turned 16 and has been having trouble finding a job because many place will only hire people over 18 years old now. I stopped by my old job from high school the other day to ask if they are hiring and was told they still limit hours to 28 per week and will only hire if over 18 with at least a high school degree. The $15 minimum wage will simply lead to more selective hiring which will make the completion for the comparatively fewer entry level jobs more stiff.

You do realize that your $2.25 minimum wage back in the 1970s was equivalent to $20-something in 2018, right?

Anonymous wrote:higher minimum wage = more automation displacing workers and fewer jobs for young people entering the workforce...

Argue as you might that those outcomes are fantasy but this is the truth.

When I was a kid I got my first W2 job at 15 when minimum wage was $2.25. The company had a policy to limit hours to 28 hours per week to avoid paying benefits from what I understood.
My kid just turned 16 and has been having trouble finding a job because many place will only hire people over 18 years old now. I stopped by my old job from high school the other day to ask if they are hiring and was told they still limit hours to 28 per week and will only hire if over 18 with at least a high school degree. The $15 minimum wage will simply lead to more selective hiring which will make the completion for the comparatively fewer entry level jobs more stiff.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The argument that I hear from those opposed to raising the minimum wage is that it will cause employers to cut jobs.
However, it seems to me that the main impact is that it would cause pressure to raise wages for those currently making between $7.50 and $15 an hour.
Someone who currently makes $15 an hour isn’t going to be happy to find themselves as a minimum wage worker.

So if wages increases, inflation will increase causing those who will be making the new minimum to have roughly the same standard of living as they do now.
At least, that’s how it would seem to play out to me.

Can someone who has a better understanding of economics explain why raising the minimum wage wouldn’t significantly increase inflation, thus negating the benefit of a higher salary.

While wage increases do have a positive correlation with inflation, this is only meaningful in a large economic context. During economic boom cycles, unemployment decreases, wages increase in order to compete for dwindling labor supply in order to address strong consumer demand. This strong demand shifts the demand curve, allowing for higher prices for a given demand level. The result is inflation. If the wage increase is the result of regulations rather than a response to demand, then there is no inflation: increases in price will simply result in less demand. Service/product providers will have the choice of providing an inferior product/service while maintaining price; sell less at a higher price, thus requiring less labor; or figure out some other way to improve efficiency to make up for the labor cost increase.

There is a good case study with NYC car wash businesses. When NYC implemented a $15/Hr wage, carwashing by hand became unprofitable almost instantaneously. People looking for a car wash was simply unwilling to pay for the higher cost. There was no inflation in car washes. What the car wash services ended up doing is firing the hand washers and installing automatic washing machines. The car washers who lost their jobs ran "black market" hand washing service, often for less than minimum wage after you factoring in their equipment and supply costs. These black market car washers are doing the washes on public streets, draining chemicals into the sewer system without any treatment. And of course, the individual car washers are not as efficient as shops in terms of procurement, time management, energy usage, and tax remittance.

of course what happens if we leave the minimum wage low so that the car wash people don't lose their jobs is this: since they cannot actually live on that wage, we have to pay them through social programs like welfare and food stamps. Because a person cannot work more than maybe 18 hours a day. So either we pay by paying more for the service or we pay through taxes. If we leave the wage low, we only have to pay part of their living expenses through salary. if we raise it, we have to pay more. What we cannot do is leave it low and not supplement, so that working people are homeless and without enough food.

We don't *have to*, we choose to as a society. This does not change the fact that the economic value of the carwashing labor is worth less than $15. If we want to affect certain social goals, it's better to implement them through social programs rather than applying heavy handed distortions to the labor market. We already use tax dollars for this specific purpose. Leave minimum wage alone.

Anonymous wrote:Its not going to pass, IMO.

Joe Manchin (Senator from West Virginia) is deeply against it. His vote is critical in the Senate. $15 minimum wage requirements would be devastating to his state’s already struggling small businesses. Imagine being a small business owner, barely making ends meet, and your labor costs doubled. Businesses in high cost of living states can absorb more easily, but many service industries are against this proposed legislation. You may raise wage for one worker, but layoff two

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The argument that I hear from those opposed to raising the minimum wage is that it will cause employers to cut jobs.
However, it seems to me that the main impact is that it would cause pressure to raise wages for those currently making between $7.50 and $15 an hour.
Someone who currently makes $15 an hour isn’t going to be happy to find themselves as a minimum wage worker.

So if wages increases, inflation will increase causing those who will be making the new minimum to have roughly the same standard of living as they do now.
At least, that’s how it would seem to play out to me.

Can someone who has a better understanding of economics explain why raising the minimum wage wouldn’t significantly increase inflation, thus negating the benefit of a higher salary.

While wage increases do have a positive correlation with inflation, this is only meaningful in a large economic context. During economic boom cycles, unemployment decreases, wages increase in order to compete for dwindling labor supply in order to address strong consumer demand. This strong demand shifts the demand curve, allowing for higher prices for a given demand level. The result is inflation. If the wage increase is the result of regulations rather than a response to demand, then there is no inflation: increases in price will simply result in less demand. Service/product providers will have the choice of providing an inferior product/service while maintaining price; sell less at a higher price, thus requiring less labor; or figure out some other way to improve efficiency to make up for the labor cost increase.

There is a good case study with NYC car wash businesses. When NYC implemented a $15/Hr wage, carwashing by hand became unprofitable almost instantaneously. People looking for a car wash was simply unwilling to pay for the higher cost. There was no inflation in car washes. What the car wash services ended up doing is firing the hand washers and installing automatic washing machines. The car washers who lost their jobs ran "black market" hand washing service, often for less than minimum wage after you factoring in their equipment and supply costs. These black market car washers are doing the washes on public streets, draining chemicals into the sewer system without any treatment. And of course, the individual car washers are not as efficient as shops in terms of procurement, time management, energy usage, and tax remittance.

of course what happens if we leave the minimum wage low so that the car wash people don't lose their jobs is this: since they cannot actually live on that wage, we have to pay them through social programs like welfare and food stamps. Because a person cannot work more than maybe 18 hours a day. So either we pay by paying more for the service or we pay through taxes. If we leave the wage low, we only have to pay part of their living expenses through salary. if we raise it, we have to pay more. What we cannot do is leave it low and not supplement, so that working people are homeless and without enough food.

We don't *have to*, we choose to as a society. This does not change the fact that the economic value of the carwashing labor is worth less than $15. If we want to affect certain social goals, it's better to implement them through social programs rather than applying heavy handed distortions to the labor market. We already use tax dollars for this specific purpose. Leave minimum wage alone.