What Happens When The US Increases Its Minimum Wage?

https://www.ibtimes.com ^ | By John BIERS 01/30/21 AT 10:39 PM

[Hot Tabasco]

If you have a bar and restaurant with 15 employees making $12 an hour, an increase to $15 will add an additional payroll of $45 an hour, $450 for a 10 hour day, $3,150 per week, $163,800 per year in payroll only.

Now you tell me how that owner is going cope with that wage increase and try and tell me it won't affect me as a customer...........

[mewzilla]

The jobless are one part of the problem.

Want to see another?

Head to a local nursing home and watch what happens when the minimum wage goes up and there’s less money to pay the more productive.

[central_va]

The push for automation has nothing to s with the minimum wage. If anything the stagnant min wage proves this. Automation is happening regardless of wage.

[central_va]

Ok less employees but the work load stays the same? Who picks up the slack?

[DoodleDawg]

Now you tell me how that owner is going cope with that wage increase and try and tell me it won't affect me as a customer...........

Is that not also true for any increase in costs for the owner? The minimum wage has been static for 12 years yet costs have still gone up because the owner passes those costs on. Wages are no different.

[OldGoatCPO]

Most places are like that now. While my wife and I had COVID, my daughter would order food that way. She then showed up at the take out window and picked up the food. She had minimal contact with other people. There is a local coffee shop that when you utilize the drive through you can pay via your phone or use card and/or cash at what looks like an ATM machine. They never have more then 2 employees working as baristas at any time. Honestly, minimum wage jobs will disappear and that hurts the poorer classes of people. Around 2003, I knew a Mexican who was a shift manager at McDonald's. His whole family, kids and all worked there (they also worked for a landscaper in summer). The family pooled there earnings for a decent place to live in a community with good schools. That type of scenario will go away when an employer has to pay $15 per hour. Forcing an artificial wage increase will simple cause entry level jobs to disappear faster then they normally would have.

[central_va]

If you have a bar and restaurant with 15 employees making $12 an hour, an increase to $15 will add an additional payroll of $45 an hour, $450 for a 10 hour day, $3,150 per week, $163,800 per year in payroll only.

The is a big restaurant/bar. What is it's gross revenue? What percent of revenue is the $163K? 2%, 5%?

[palmer]

Ok thanks. If we fix 1-4 then there will be no need for #5.

[mewzilla]

Nobody.

And the residents end up paying for it.

Lessons on economics are everywhere if one just bothers to look.

[central_va]

The Cheap Labor Express( The GOP ) are masters at manipulating wages through unbridled LEGAL immigration.

[redgolum]

That is a great point.

Also, it would cut down on the jobs managing public assistance.

There is a lot of money in the poor.

[central_va]

You are not making sense. The employer let one of his employees go because of the increase so he doesn't have to raise prices. So same prices = same demand = same work. Again who does the work now?

There is a lesson in policies to be learned here...

[central_va]

Is that not also true for any increase in costs for the owner? The minimum wage has been static for 12 years yet costs have still gone up because the owner passes those costs on. Wages are no different.

We actually agree on something. Weird...

[OldGoatCPO]

It won't matter. We have become a service oriented economy. Even Trump could not bring back enough manufacturing jobs to change that. As more services can be performed by AI less employees will be needed. One person used the phrase “automation,” that is outdated. Artificial Intelligence a thinking machine that can deal with different situations, answer questions off the cuff and provide services like, completing unemployment applications. Think of the Presidents show at Disney World in Florida. I do not know if they still have it, but those where automatons, they acted human like but were mechanical in their responses. Convert them to AI and you could have George Washington sit down with the Times and give an interview without pre-programmed questions.

[babygene]

It's simple... If everybody makes more, everything costs more. It just devalues the dollar.

[econjack]

Also, unions and workers do coercive comparisons on wage differentials and will try to maintain that spread. If your friend’s employees used to say “I’m earning twice the minimum wage.”, they will continue to try and maintain that wage spread, hence an upward pressure on non-minimum wages, too.

[OldGoatCPO]

While minimum wage has stagnated have real wages gone up? Minimum wage was meant as an entry level wage not a living wage. So yes, it was stagnant. In part because it is just an entry level wage and in part because of government policies. In recent years it has been used as a political football and is treated as a living wage vice its intended purpose as a entry level wage.

When I was 17 and 18, I baled hay in the summer. The last summer before I joined the military, I was paid $5 per hour (cash). I hired three other teenagers at $4 per hour. We worked 10-12 hour days, generally took us two days to finish the job. We did two hay crops per summer I would easily earn $200 (1974). If I was lucky another farmer would hire me for a day or two. I used $100 for new school clothes and the remaining $100 was my summer money. By 1984, the farmers were no longer hiring teenagers because farm work fell under minimum wage rules for the state and farmers had to pay insurance and unemployment insurance. Hire a teenager for cash and the farmer took a risk if somebody got hurt. We usually had at least one dumbass nail his leg with a bailing hook. That was a great way for me to earn what was a decent amount of money, buy school clothes and put gas in the car. Government labor laws put an end to that. Most farmers baling operations are completely automated now, all you need is one person to drive a tractor. With GPS, you won't even need a person to drive the tractor pretty soon. That is what happens when the federal government steps in and mandates things like minimum wage. You will lose a lot of entry level jobs.

[econjack]

The minimum wage was never intended to be a wage for maintaining a family. How have wages been kept "artificially low"? Fact is, they haven't. Labor's share of GNP has been virtually constant at about 67% since they started tracking wages and GNP.

In 1970 a new car was about a 1/3 of an annual average wage. Now a new cars equals the average annual wage.

I kinda doubt this. Look at average annual wage data for those who own a car. That wage is higher than average wage data.

[cableguymn]

I have heard it’s public sector union contracts.

The Biden people.

[stylin19a]

This is bill has the same stuff passed by the house in 2019.
the minimum wage is graduated until it hits 15 bucks and hour in 2025.