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.
One of my daughter’s is a lower level retail department manager for a national book chain.
She earns $11 something an hour and gives 110% to her employer and more importantly to her customers. She manages the children’s department.
Several mothers have told her that they want to go see her at the bookstore. They know her name and seek her out for recommendations and to have some fun.
She brings tremendous value to the company. I know that she’s got the eye of the store management and hopefully regional management. Hopefully, her reputation might bounce her up to a different position with higher wages and responsibility. In the meantime, she’s on the stepping stone. That’s what entry jobs are supposed to be.
Why not shoot for even more than $15? If the job is going away,anyway...DUH!! What’s wrong with these people? Entry level jobs were never meant to compete with the higher-paid jobs.
Until the USA gets a grip and cuts immigration to nothing, both legal and illegal, then I am for the minimum wage. You can’t have open borders and no minimum wage that is a one way trip to Brazil style economics.
The Chamber of Cronies and K Street has corrupted the Congress into keeping the borders open and as a result labor has very little value. There are to many people chasing to few jobs.
“In the meantime, she’s on the stepping stone. That’s what entry jobs are supposed to be.”
Exactly right. They were never intended to be lifetime jobs with which one could raise a family, but due to importing of millions of unskilled uneducated unassimilated third world democrat voters, that is just what has happened.
the love of money is the root of all evil.
more money solves very few problems, because the root problem is not usually money.
I’m doing my part. I’m no longer chasing any job. That feels wonderful. Now I have to demand that my wife raise my allowance to $15 per hour or I won’t do my chores.
Exactly.
Just tie the minimum wage to inflation and de politicize the damn thing.
Oh, please, keep us informed of the successfulness of that endeavor.
When my kids started their first jobs, I was actually upset at how much they were making.
I think the current minimum wage is too high. Perhaps they should have a staggered wage.
Min wage should be zero so the employer decides what a job is worth and the market determines if he is correct or not. But if the government decides there must be a minimum wage, for kids below 18, it should be 60% of that for people above 18.
There would be an incentive to hire kids and give them a jump start and my kids wouldn’t end up having more disposable income than I do. For many years we had virtually none because we were too busy paying for them.
My wife still gets all excited when she can go to the store and spend $20 without worrying about it.
If I was in the robot business, I would be contributing handsomely to the $15-per-hour activist movement. I would be giving as much as I could to the most militant, loud, violent, extreme groups in it.
” 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. “
Because that puts the unemployed and welfare recipient directly into the hands of the Democrat party. Everything the Democrats do is meant to destroy the human spirit and make the affected dependent on the Democrats for his next meal.
“She brings tremendous value to the company. I know that she’s got the eye of the store management and hopefully regional management. Hopefully, her reputation might bounce her up to a different position with higher wages and responsibility. In the meantime, she’s on the stepping stone. That’s what entry jobs are supposed to be.”
That’s wonderful. If she is that good and is adding value to the store, she will be rewarded for her work ethic.
I paid my own college tuition, as well as a large portion of that of two siblings, partially with cash earned before 18. I wouldn’t have enjoyed working my ass off for 60% of what my coworkers were making.
Maybe -- or perhaps they'll say "thanks for the memories," and cut her position into 3 for greencard holders.
The photo is quite telling. Nicely dressed white young adults holding professionally designed protest signs demanding $15 an hour minimum wages. Someone is paying them to protest. I wonder if they are getting $15 an hour to agitate against businesses that can’t afford to pay the demanded amount. I wonder who is paying them to protest. I wonder if it is someone with the consonants S, R, S. Can I buy a vowel, Alex? I would like an O.
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Until the USA gets a grip and cuts immigration to nothing, both legal and illegal, then I am for the minimum wage. You can’t have open borders and no minimum wage that is a one way trip to Brazil style economics.
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You can’t have WELFARE and open borders...
Even if govt were to throw the immigration doors wide open, w/o welfare, the influx would be min. to null.
Course, we’re discussing 2 areas where govt has NO AUTHORITY to begin, so the debate is moot.
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