$5/hour Minimum Wage

[mikoyan29]

Not sure if politics or social woes....


Apparently there was an editorial in the Wall Street Journal where the Vice President of some company was putting forth the idea of a $5/hour minimum wage. Evidently, this was one of the ideas put forth by the Heritage Foundation (or whatever group was talking about Republican planks). Anyway, the WSJ editorial person said that it would create more jobs, blah blah blah. Then he started doing math which evidently is not his strong suit.

Okay, current minimum wage is $7.25/hour, someone wants to bump that up to $10.00. This guy said that would mean the dollar menu at McDonalds would become the Three Dollar Menu. I guess he assumes that one worker at McDonalds only makes 1 burger per hour or something because that entire $2 would go into the cost of the burger. Now increasing the wage to $10 would mean a 38% jump. Assuming that cost goes into the burger, it would mean the dollar menu would become the $1.38 menu or some such. But we know that labor costs are fraction of the overall cost of a product, so the the cost increase would not be that much. So we get a case of fuzzy math on his part.

Next thing he says is that the poor people could live together and share costs. Even then, if you have 3 or 4 people making this minimum wage and they all work full time, we are talking about $10,000/year (roughly) meaning a combined income of $40,000 (if 4 are living together). In some cities, that can be tough for 1 person, let alone 4.

But all of this begs a simpler question: How come the wages of the workers have an impact on things but the people making millions don't?

And it begs another question: How can someone that math illiterate rise to the ranks of a company?

[s_stabeler]

the problem is, what companies forget to factor in is that higher-paid workers are able to work harder, thus producing more ( the reduction in money woes allows you to concentrate better on the job- which means a lower error rate, as well as faster work) so (for example) a worker might make 10 burgers per hour currently, but 15 per hour if their wages rise to $10 per hour- which would completely cancel out the rise in labour costs ( indeed, would more than- it would result in a 5c per burger cut in labour costs)

the truth behind why companies want a lower minimum wage is uglier. Mega Corps want a return to the Victorian era, when they could more-or-less control the entire lives of their workers. You lived in a comany-owned hovel, bought food at the company store and generally, owed your entire existance to the company. oh, and your kids likely had to work for the company in order to help keep the family finances from imploding. Come election time, you more-or-less had to vote for the company candidate. (if you even had a vote) Oh, and if you went on strike? fired, and you lost everything. Get sick? same.

[TheHuckster]

The folks who think a specific minimum wage works everywhere is a dolt. A $7 minimum wage is more feasible in low-cost-of-living areas like the south, and is downright impossible in high-cost-of-living-areas like New York or San Francisco.

Also, I would argue that using McDonnalds as an example is absolutely wrong, even with your more correct math. Prices at McDonnalds are a little more elastic. Sales might drop a little by raising the price of a dollar menu item to $1.38, but not by much. Contrast that with a place like Best Buy, and even a 10% price increase that might result from a 38% wage increase would make a $500 item a $550 item, which is not as negligible a difference.

I'm not against raising the minimum wage, though, even with whatever price increases may result from it. I think that, first of all, in times that have volatile prices on necessary purchases like food and gas, the minimum wage can be anywhere from "marginally fair" when prices are low to "impossible to live on" when they are high. I remember back in 2007ish I was living paycheck-to-paycheck and when gas went from $2.50 up to nearly $4.00 in a matter of weeks, I has serious financial issues, and the only reason I survived without defaulting on payments was due to the price falling back after a week or two... and even then I was making far more than minimum wage.

People contend that the minimum wage has historically been somewhat on par with inflation, but they fail to point out that inflation alone has little effect on one's cost-of-living compared to essentials whose prices are increasing at far higher rates than the inflation rate.

[s_stabeler]

Personally, I think the bets bet is not to tie minimum wages to a dollar amount, but tie it to the cost of living- that is, the minimum wage for a particular area is whatever it takes for one person to be able to live independantly on.Not nessecarily more than a basic living, but be able to afford 1) a one bedroom apartment- wages should not be low enough to force people to share an apartment. If people choose to save money by living together, good for them, they can afford more luxuries. 2) utilities- having a roof over your head with no water or electricity is more or less impossible these days. 3) food- you should not be forced to go hungry. again, it doesn't have to be enough that you don't need to be frugal- but you should be able to afford decent food. 4) miscellaneous- things like retirement contributions, insurance costs, and suchlike. Plus the occasional luxury.

[Rageaholic]

Personally, I think the bets bet is not to tie minimum wages to a dollar amount, but tie it to the cost of living- that is, the minimum wage for a particular area is whatever it takes for one person to be able to live independantly on.Not nessecarily more than a basic living, but be able to afford 1) a one bedroom apartment- wages should not be low enough to force people to share an apartment. If people choose to save money by living together, good for them, they can afford more luxuries. 2) utilities- having a roof over your head with no water or electricity is more or less impossible these days. 3) food- you should not be forced to go hungry. again, it doesn't have to be enough that you don't need to be frugal- but you should be able to afford decent food. 4) miscellaneous- things like retirement contributions, insurance costs, and suchlike. Plus the occasional luxury.

But... that would make sense! We can't have that!

[Mytical]

@s_stabeler What you propose makes sense. Of course since it makes sense, don't count on it ever happening. You did forget one aspect, however, in your calculations. Medical Care. A person should not have to go bankrupt just because they get ill, have an accident, or otherwise need to go to the doctor. Nor should they have to choose between food or getting healthcare.

[mikoyan29]

As I said, why don't the costs of paying the CEO ever enter into these conversations? I mean a CEO who makes a million dollars could be 100 people making this hypothetical minimum wage. What makes that person worth 100 people?

[s_stabeler]

@s_stabeler What you propose makes sense. Of course since it makes sense, don't count on it ever happening. You did forget one aspect, however, in your calculations. Medical Care. A person should not have to go bankrupt just because they get ill, have an accident, or otherwise need to go to the doctor. Nor should they have to choose between food or getting healthcare.

actually, I didn't- it's covered in insurance costs. You are supposed to have health insurance these days.

[Gravekeeper]

Didn't we already have this discussion a little while back? I vividly recall recalculating McDonald's prices based on their tax filings and generally squatting over arguments like the Heritage Foundations. -.-

Ah, yes, here we go. It would cause a global price increase of 4.7% provided they past the entire cost of a minimum wage increase on to the consumers ( Which they would not do ). Additionally, an increase in minimum wage actually causes an increase in the growth and hiring of small businesses.

Which is particularly amusing because rich asshole Republicans like to use a "Think of the children!" style argument about small businesses in the face of any proposed wage, tax or insurance change.

All these fuckheads basically want is to keep having the government subsidize the bulk of their workforce instead of them having to pay a fair wage.

The folks who think a specific minimum wage works everywhere is a dolt. A $7 minimum wage is more feasible in low-cost-of-living areas like the south, and is downright impossible in high-cost-of-living-areas like New York or San Francisco.

I'm not sure which folks you're aiming that at. But the idea of a Federal minimum wage is to prevent underpaying people. Whether or not a State choose to set a higher minimum wage than the Federal is up to them.

Currently speaking, almost half the country ( 23 States ) has a higher State minimum wage than the Federal minimum wage. While 10 States have lower. Everyone else is the same.

[Aethian]

As I said, why don't the costs of paying the CEO ever enter into these conversations? I mean a CEO who makes a million dollars could be 100 people making this hypothetical minimum wage. What makes that person worth 100 people?

CFO not CEO.

[TheHuckster]

Ah, yes, here we go. It would cause a global price increase of 4.7% provided they past the entire cost of a minimum wage increase on to the consumers ( Which they would not do ). Additionally, an increase in minimum wage actually causes an increase in the growth and hiring of small businesses.

Can you cite that? I could see one saying it might have little to no effect on the growth of small business, but I fail to see how increasing the minimum wage increases small business growth. It's counter intuitive, and I'd like to see the data and logic behind that.

[mikoyan29]

Can you cite that? I could see one saying it might have little to no effect on the growth of small business, but I fail to see how increasing the minimum wage increases small business growth. It's counter intuitive, and I'd like to see the data and logic behind that.

When people have more money to spend, they will spend it. Likely some of that money may find its way to small businesses. When you have the disparities like we are getting now and money starts getting concentrated, one person can only spend so much money. Despite his many faults, Henry Ford seemed to get that idea and he increased his customer base several fold. When he announced the $5/day wage, all the other car companies balked and said he'd go out of business. That was over 100 years ago. Funny enough, the companies that balked are the ones that recently got assistance from the government (one of those companies twice). Of course the difference between Henry Ford is that he made stuff. Unlike Romney who only seems to make money (and stupid comments).

[Gravekeeper]

Can you cite that? I could see one saying it might have little to no effect on the growth of small business, but I fail to see how increasing the minimum wage increases small business growth. It's counter intuitive, and I'd like to see the data and logic behind that.

As mikoyan said, a increase in minimum wage is always followed by a surge in consumer spending over the next quarter. Its basically a stimulus package.

He's a study if you like though.

[Kheldarson]

So semi-relevant response from the Republican side:

http://www.glennbeck.com/2014/02/13/...ruth-about-it/

Who wants to find all the problems?

(Besides it being from Glenn Beck. That's a given)

[chozoghost79]

Glenn Beck described himself as a horrible worker when he made min wage at Mickey D's. Almost to say all min wage workers are that horrible, getting paid to goof off or not show. Definitely not true.