Posted on 08/18/2015 1:34:15 PM PDT by nickcarraway
Small businesses are already struggling to survive the spate of minimum wage increases to $15 per hour in parts of California.
Last month, the small Bay Area town of Emeryville, California, (population 10,000) decided to act as flag-bearer for raising the minimum wage in California, hiking its minimum wage to $14.44 per hour.
Even though businesses with less than 56 workers are exempt from the $14.44 rate and do not have to raise their wages to $15 until 2018, Vic Gumper, who owns Lanesplitter Pizza, with outlets in Berkeley, Oakland, Albany and Emeryville, decided not only to bite the bullet but swallow it, paying his workers $15 to $25 an hour while eschewing tips or raising prices.
(Excerpt) Read more at breitbart.com ...
What I’m making fun of is your belief that the labor cost of employees is simply payroll. It isn’t. And UI is part of the labor cost of employees, which we employers expect to be returned to us in dollar value.
Nope. The employer expects a value return on his dollar. If an employee’s gross is $30,000, but the actual cost of an employee is $60,000, an employer expects $60,000 in return value. That means every mandated labor cost is eventually paid by the employee himself, or he isn’t worth keeping.
That’s correct, and you expected a value return of $60,000, not $30,000. Employees who don’t realize their “freebies” paid by employers come right out of the aggregate labor costs — which employees could see in their paychecks instead — are one of the major reasons that salaries are stagnating.
Be that as it may, it is paid for by an employer tax, not by the employee himself. Believe me, I’ve had to set hundreds of claimants straight on that one. They as much as demanded their UI check, even though disqualified because “they’d paid into it” and “it was their money” and so on.
And what most liberal idiots -- and apparently altogether too many FReepers do not realize -- is when the money is spent by regulatory or compliance costs, it means fewer employees. But you must get the same dollar return from those who remain, since you can't raise prices to customers. What does that mean? That the productivity of those who remain must increase. Effectively, everybody who still has a job when the government music stops must pay the cost of their new "freebies."
Well put.
You guys are arguing past each other because you haven’t defined the terms.
If you talking about the LEGAL incidence of the tax, then 2ndDivision is correct. It is indeed the company that sends the money to the government.
If you are talking about the ECONOMIC incidence of the tax, then it is as FredZaruna says: that money is part of the company’s aggregate labor costs, and that money, if not paid to the government, would be passed on to the employees in higher wages.
My budget for labor is what it is. When the government tells me I must pay, say 5% more per employee for UI, that means I have 5% less available for employees. I let people go, hopefully by not refilling their positions when they leave, but sadly, by firing people if it comes to it.
Now, the 5% fewer employees left are effectively paying the cost, because 95 people now have to do the job formerly done by 100. Since their productivity has been forced to increase, they are paying the cost of the mandated insurance.
People who actually understand economics know this. It is why we argue against raising the minimum wage. Only liberals think that employers pay benefits. It's a Three Card Monte game, and when the cards stop moving, the employee is the person who has to work harder to pay the piper -- or take less money home to spend on the things he really wants to buy.
Just because I worked at the unemployment office doesn’t mean that is the only job I’ve ever had. Most of the rest of my career was in human resources, so I probably have at least as much as experience as you do. And if you are an employer you know that the UI tax is on a sliding scale.
The point is, the aggregate labor cost is what you have available to pay employees that is fully loaded by wages, benefits, government mandates, and labor compliance costs.
The employee effectively pays those costs, because if I didn't have to pay the fully loaded cost, I would be paying him more cash on the barrelhead. But make no mistake: whether I pay him $60/hour+benefits, or $85/hour as a contract employee who covers all of that himself, I still expect $85/hour in value from the employee. NOT $60.
But I'm honest about this. I don't try to tell employees I'm picking up the tab or running a charity. I need an increased value return from an employee when the government increases the price of keeping him on the payroll.
This is why liberals hate Uber and other contract fee for service arrangements. As soon as someone becomes an independent contractor, they understand exactly how much of this crap they're being forced to pay for in hidden fees they've never seen before.
I expect value from an employee on the basis of the entirety of his cost not on the basis of what's left over once the government is done working him over in his gross.
I’m not. The reply was to someone who said restaurant $30 and frozen $15.
The concept of proper payroll determination is business 101, why don't liberals realize that.....the employer pays NOTHING to anyone but the employee.....the money sent on his behalf to the government, or anyone else, comes out of the pocket of the employee.
that's not brain surgery but some just can't comprehend it.
Seattle’s the canary in the coal mine. But Moonbeam didn’t get his nickname for nothing. Besides he’ll be retired somewhere when the fallout happens in CA. He knows where this is going to lead and could give a rat’s rearside!
http://www.westernjournalism.com/15-minimum-wage-looms-seattle-restaurants-close-doors/
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