Posted on 07/12/2017 5:38:54 AM PDT by Kaslin
There are political movements to push the federal minimum hourly wage to $15. Raising the minimum wage has popular support among Americans. Their reasons include fighting poverty, preventing worker exploitation and providing a living wage. For the most part, the intentions behind the support for raising the minimum wage are decent. But when we evaluate public policy, the effect of the policy is far more important than intentions. So let's examine the effects of increases in minimum wages.
The average wage for a cashier is around $10 an hour, about $21,000 a year. That's no great shakes, but it's an honest job for full- or part-time workers and retirees wanting to earn some extra cash. In anticipation of a $15-an-hour wage becoming federal law, many firms are beginning the automation process to economize on their labor usage.
Panera Bread, a counter-serve cafe chain, anticipates replacing most of its cashiers with kiosks. McDonald's is rolling out self-service kiosks that allow customers to order and pay for their food without ever having to interact with a human. Momentum Machines has developed a meat-flipping robot, which can turn out 360 hamburgers an hour. These and other measures are direct responses to rising labor costs and expectations of higher minimum wages.
Here's my question to supporters of higher minimum wages: How compassionate is it to create legislation that destroys an earning opportunity? Again, making $21,000 a year as a cashier is no great shakes, but it's better than going on welfare, needing unemployment compensation or idleness. Why would anybody work for $21,000 a year if he had a higher-paying alternative? Obviously, the $21,000-a-year job is his best known opportunity. How compassionate is it to call for a government policy that destroys a person's best opportunity? I say it's cruel.
San Francisco might give us some evidence for what a $15 minimum wage does. According to the East Bay Times, about 60 restaurants around the Bay Area closed between September and January. A recent study by Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research calculated that for every $1 hike in the minimum hourly wage, there is a 14 percent increase in the likelihood that a restaurant rated 3 1/2 stars on Yelp will go out of business. Fresno Bee reporter Jeremy Bagott says that even some of San Francisco's best restaurants fall prey to higher minimum wages. One saw its profit margins fall from 8.5 percent in 2012 to 1.5 percent by 2015 (http://tinyurl.com/y6wy3gne). Most restaurants are thought to require profit margins between 3 and 5 percent to survive.
Some think that it's greed that motivates businessmen to seek substitutes for labor, such as kiosks, as wages rise. But don't blame businessmen; just look in the mirror. Suppose both McDonald's and Burger King are faced with higher labor costs as a result of higher minimum wages. McDonald's lowers its labor costs by installing kiosks and laying off workers, but Burger King decides to not automate but instead keep the same amount of labor. To cover its higher labor costs, Burger King must charge higher prices for its meals, whereas McDonald's gets by while charging lower prices. Which restaurant do you think people will patronize? I'm guessing McDonald's. What customers want is an important part of a company's decision-making.
But there are other actors to whom companies are beholden. They are the companies' investors, who are looking for returns on their investments. If one company responds appropriately to higher labor costs, it will produce a higher investor return than one that does not. That means "buy" signals for the stock of a company that responds properly and "sell" signals for the stock of one that does not, as well as possible outside takeover attempts for the latter.
The best way to help low-wage workers earn higher wages is to make them more productive, and that's not accomplished simply by saying they are more productive by mandating higher wages.
It sounds like she is very good at what she does and she enjoys it. The real question is does she WANT to go higher than she is? Perhaps she is happy doing exactly what she is doing and she is providing a service that keeps the customers happy and coming back for more? I am a capitalist and believe everyone should have the opportunity (by their own means and hard work, not given to them) to do exactly what they want and earn all they can...if that's what they want. Perhaps it's my experiences but I have been on the promotion path in several positions I've had in my career, some to executive level positions, but I can honestly say some positions that paid the most, cost me the most, too, in intangibles and tangibles...family, time, peace of mind,even health, etc. I have also had positions where my earnings were very good but what I felt like I was contributing to others/society was worth more than I could ever earn. As my children are entering their earning years and raising families my wish for them is to enjoy what they do and make a difference in their lives and the lives of others...if that rewards them handsomely in $$, so be it, if it rewards them in different ways, then so be it.
If $15 is good, why not $150?
the love of money is the root of all evil.
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A feast is made for laughter, and wine maketh merry: but money answereth all things.
Ecclesiastes 10 V. 19
“or many years we had virtually none because we were too busy paying for them”
Amen brother
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“My wifestill gets all excited when she can go to the store and spend $20 without worrying about it”.
Amen again. Know thw feeling well.
My reasoning for my proposal is that with higher minimum wage, a true entry level grunt job will go unfilled because the value of the work is not worth the cost of the wage.
But, for young people, the value of work is not learned as easily, because minimum wage is too high. As someone else said, minimum wage is not meant to be a career wage.
For a kid, who’s food, shelter, clothing and basic needs are paid for by his parents, that first job or two is for learning how to work, show up, be courteous and not get fired. Getting fired can also be a tremendous learning experience, one that’s better to learn when you’re 16 and not 25.
If you were that productive as a youth, I’m sure you wouldn’t have been at my sub-minimum wage proposal anyway. I didn’t say that employers had to pay that, I said that they would be able to.
They think Marx and Engels are the greatest economists to ever live and Marxist theory is utopia.
What ever happened to the belief that you earn what you are worth? Whether or not you like it, you are simply a TOOL that is used to produce income...nothing more. Don’t like it? Do something to improve your worth to an employer.
With that in mind minimum wage workers are like union workers. Their collective ignorance astounds me! Why? Let me delineate the perfect example: Let’s say your employer makes a net profit margin of 7%. That is that he makes a clear profit of $7.00 after paying all bills and expenses. Now the government (or union thugs) come in and tell him he is now going to pay the minimum wage employees $5.00 per hour more. Guess what happens?
His matching social security goes up accordingly. His gross operating costs went up substantially. Any (and all) insurance and/or employee related costs based upon employee pay go up. WHAT CAN HE DO? Raise the price of his services or products to try to maintain the same profit margin he had before the mandated pay raise!
Then...the union mentality kicks in again because they want another pay hike because for some strange reason their cost of living went up with the pay raise...and the circle goes around and around again... That’s what union members do: Strike and get a pay raise because the cost of living over the past years has gone up. Once they strike there is now more expendable income in the community and the prices go up again...and the circle goes around and around again.
She was asked yesterday if she could provide child care once a week for a home school group. It is a paid position.
She’s going to do it and said she may donate most or all of her wages to ministries.
That’s one benefit of empty nest.
Economics is politics. You cannot divorce the two. It took me a long time to realize that fact.
When most Freepers were young the USA had not been flooded with 3rd world immigrants competing for every job. Ironically when adjusted for inflation the minimum wage was actually higher in the 60’s and 70’s than today.
We shouldn't have either, and you probably mean Venezuelan style economics. Brazil's on the mend, Venezuela is an economic basket case.
Exactly my point of discussion with Libs about MW, only I start with $1000/hr because even the most dense Lib can see that won't work. Then ask them where the magic wage is drawn and have them try to explain why they set it where they did. Once done, tell them about the McDonalds kiosks that have already started to substitute capital for labor when the wage hasn't even reached $15/hr. A Lib will never engage in an honest debate without having to resort to an emotional, factless, diatribe when confronted with the facts.
I know very well what happens when the minimum wage is raised, because I used to work at minimum wage jobs. Every time the wage goes up your hours are getting cut, so at the end you are making less than before. I am not blaming the business, I am blaming the government for forcing the businesses to raise their wages, and it doesn't matter if the employee is dependable and always on time. Or the employee is lazy, undependable etc.
Forget minimum wage, especially at the federal level. The feds don’t need to be telling the locals how much to pay their workers. Let the market do its magic.
Seems like the powers that be have squeezed the current wage turnip as much as it can withstand. Raising the minimum wage will certainly allow for more taxes and union dues to be raked in at windfall proportions.
If only!
$21,000 a year QUALIFIES you for many welfare programs.
If she is a single woman, no children, she would be eligible for about $20 a month in Food Stamps, she would qualify for the most generous level of Section 8 rent assistance in most big cities, she would qualify for the most generous level of ObamaCare, she would qualify for phone assistance and heating assistance, and probably more programs I don't even know about.
If she has a child, add in full Medicaid coverage for the child and some medical assistance for Mom, free public schooling and multiple food programs for the child, additional Food Stamps, and TANF cash for the family, and the Earned Income Tax Credit.
Re: “Until the USA gets a grip and cuts immigration to nothing, both legal and illegal, then I am for the minimum wage.”
I agree.
America has a massive - and completely artificial - over supply of low skill labor because of LEGAL immigration.
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