View Full Version : Raising the minimum wage: Good for the economy and employment
At least according to a study by the National Employment Law Project. Of the nearly two dozen times the minimum has been raised since 1938 employment increased 68 percent of the time. 73% of the time in some commonly minimum wage jobs like retail. This study seems to suggest that a rising tide really does lift all boats.
http://www.businessinsider.com/minimum-wage-effect-on-jobs-2016-5
At least according to a study by the National Employment Law Project. Of the nearly two dozen times the minimum has been raised since 1938 employment increased 68 percent of the time. 73% of the time in some commonly minimum wage jobs like retail. This study seems to suggest that a rising tide really does lift all boats.
http://www.businessinsider.com/minimum-wage-effect-on-jobs-2016-5
If only the news media would bother to report the statistics vs. anecdotes. I've lived through enough of these increases in the national minimum wage, and every time - every time - a newscaster runs to a local business and lets them moan and wail about how they're going to have to shut their doors. It's lazy, knee-jerk "reporting" that muddles everyone's minds on this issue.
Having $70K employees doesn't seem to be cramping this guy's style:
http://fortune.com/2015/10/27/company-that-promised-70000-minimum-wage-reaps-rewards/
My take on it is that it's simple greed that keeps companies from paying reasonable wages to "the little people," as hotelier Leona Helmsley once characterized us.
Teacher Terry
6-5-16, 5:18pm
I love the guy that paid everyone such a good wage and took the same wage himself. The minimum wage being increased is great. Some states lets employers pay servers just a few bucks/hour because the rational is that they will get tips. Luckily NV does not allow that. My DIL is a cocktail server so makes way more in tips then wages.
I love the guy that paid everyone such a good wage and took the same wage himself. The minimum wage being increased is great. Some states lets employers pay servers just a few bucks/hour because the rational is that they will get tips. Luckily NV does not allow that. My DIL is a cocktail server so makes way more in tips then wages.
I wouldn't rank the guy with Gandhi quite yet. His non-salary compensation is holding up pretty well.
http://www.geekwire.com/2016/court-filing-reveals-gravity-payments-ceos-pay-and-companys-financials/
Looks like investing in robotics is the way to go...
https://www.youtube.com/watch?v=KMZYWsGS5dg
Saw this innovation at the major railway terminal, Union Station, in Toronto that is under major renovation. People were using it but with no sitting area it was all to go. Lots of people waiting for their order though so the service was slow. It seemed to be popular but there was a terminal for ordering the old way.
I do a lot of people watching at these places waiting for the transit train going home so enjoyed the new view. i see if as reducing staff myself.
I wouldn't rank the guy with Gandhi quite yet. His non-salary compensation is holding up pretty well.
http://www.geekwire.com/2016/court-filing-reveals-gravity-payments-ceos-pay-and-companys-financials/
Exactly. He may be a nice guy but at the end of the day he's still a businessman hoping to make money off his investment. That he found an alternative to the standard thinking just proves the standard thinking isn always right. Although if his entire industry followed his lead he might end up struggling with the loss of differentiation.
Looks like investing in robotics is the way to go...
https://www.youtube.com/watch?v=KMZYWsGS5dg
Geez, this isn't news. My corner QuickChek has had this for years--it's how DH and I get our fast food.
BUT the real impressive change in how we order is taking place at Newark Liberty Airport. They're replacing all the people movers, and many of the gate areas with self-serve bars/luncheons. Each seat has its own iPad/tablet.
http://www.theverge.com/2014/11/20/7254931/how-ipads-are-making-airports-less-miserable-places
Looks like investing in robotics is the way to go...
I can some pluses and minuses with a system like that - big investment and ongoing costs for a franchise. And it's not like you can bring on extra kiosks during busy times and send them home when it's not and only pay for the hours you use them. You don't see employees standing around with "out of order" signs on them, either. I expect the franchises also won't like that total amount hanging in the corner reminding customers when they are paying more than they want.
Employees also know how to "push" people through - I can imagine someone standing at a kiosk for 15 minutes browsing and browsing or worse doing it for someone on their phone or for their kids before they even get to placing an order. Or someone technically challenged like my mom who would eventually work her way through it - or need to ask questions. With more of the same standing behind them.
So instead of thinking--"Great! We'll pay our employees a little more even if it cuts one percent off our profit. The economy will be better for it and people will be able to buy more of our product, so we'll come out ahead." The response is "I'll show you, you scurvy SOBs. I'll buy robots and fire the lot of you!" Telling, I believe.
So instead of thinking--"Great! We'll pay our employees a little more even if it cuts one percent off our profit. The economy will be better for it and people will be able to buy more of our product, so we'll come out ahead." The response is "I'll show you, you scurvy SOBs. I'll buy robots and fire the lot of you!" Telling, I believe.
Well, given the price of the components used to build these sorts of things ($25 Raspberry Pi, $300 display, software amortized over 10,000 installations...), it's going to be a lot cheaper to have robots taking orders than $15/hour minimum wage counter workers.
And it's not like taking fast food orders is really the peak in human self-actualization. Robots doing dreadful work like that seems like it would free up humans to write poetry, play with their children, sing songs, and all that.
I don't see people mourning much the passing of hand-labor to harvest wheat.
After watching a fast food worker using one of those picture-based cash registers, my little girl asked me why they didn't just turn it around to face the customers.
...
And it's not like taking fast food orders is really the peak in human self-actualization. Robots doing dreadful work like that seems like it would free up humans to write poetry, play with their children, sing songs, and all that.
I don't see people mourning much the passing of hand-labor to harvest wheat.
Yeah, they can all write poetry and play with their children in the homeless camp--when there are no more jobs for the proletariat. Maybe it's time for a serious discussion of guaranteed incomes, since the captains of industry consistently show how much the country's financial health means to them.
Yeah, they can all write poetry and play with their children in the homeless camp--when there are no more jobs for the proletariat. Maybe it's time for a serious discussion of guaranteed incomes, since the captains of industry consistently show how much the country's financial health means to them.
We're headed that way - most consumers get their money from working. When that breaks down the money makers will need to either give them money to be consumers - or figure out how to run a profitable business without consumers.
They could make robots to go in and order from the fast food kiosks, but the robots don't have money, either.
I don't see how an economy based on us each selling fast food to each other, while The Owners skim off the surplus value of our labor, is sustainable.
each morning on the way into work I stop by McDonalds..........sausage biscuit & water $1.37........I have grown attached to the employees. I would be willing to pay more than $1.37 to see them earn more money...........same for all the places we eat.
each morning on the way into work I stop by McDonalds..........sausage biscuit & water $1.37........I have grown attached to the employees. I would be willing to pay more than $1.37 to see them earn more money...........same for all the places we eat.
I suppose you could hand them tips, instead of waiting for Corporate to come to their senses.
Yeah, they can all write poetry and play with their children in the homeless camp--when there are no more jobs for the proletariat. Maybe it's time for a serious discussion of guaranteed incomes, since the captains of industry consistently show how much the country's financial health means to them.
Ha! and +1
less labor cost = more profit = Wall Street happiness
Ha! and +1
less labor cost = more profit = Wall Street happiness
Labor costs = consumer dollars. At what point do we reduce labor costs enough to destroy our consumer base? I've wondered if this "weak recovery" has been primarily because we're hitting that point in the curve.
catherine
8-19-16, 10:13am
https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/08/CBOinequality.png&w=1484
This just doesn't seem right.
https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/08/CBOinequality.png&w=1484
This just doesn't seem right.
What would seem "right"?
iris lilies
8-19-16, 11:22am
Catherine, this chart is about wealth, not income. It uses assets as the measure.
I know with absolute certainty that a rise in minimum wage means that recipients would spend it all. There would be no more investing than there is now. In fact, you could give each household in the lower 25% $10,000 and in two years you would not see evidence of that gift in this chart because the households would have spent all of that money on consumeristic crap that does not increase wealth.
Anyone else reading Hillbilly Elegy by J.D. Vance? I will start a thread on it soon. Interesting insights into poverty.
catherine
8-19-16, 11:36am
Good point, IL. I've attached another chart for you.
LDAHL, in a free market economy, what difference should it make if wealth grows exponentially among a small minority of people and remains flat for everyone else? To me it's a signal of something wrong with the economy, and it makes the voice of the people very vulnerable.
https://www.cbo.gov/sites/default/files/cbofiles/new/homepage_graphic_large.png
The share of income going to higher-income households rose, while the share going to lower-income households fell.
The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
Most of that growth went to the top 1 percent of the population.
All other groups saw their shares decline by 2 to 3 percentage points.
Catherine, this chart is about wealth, not income. It uses assets as the measure.
I know with absolute certainty that a rise in minimum wage means that recipients would spend it all. There would be no more investing than there is now. In fact, you could give each household in the lower 25% $10,000 and in two years you would not see evidence of that gift in this chart because the households would have spent all of that money on consumeristic crap that does not increase wealth.
Anyone else reading Hillbilly Elegy by J.D. Vance? I will start a thread on it soon. Interesting insights into poverty.
Iris, that consumeristic crap does increase wealth - for the people making, selling it. Sometimes I wonder if the push for increased minimum wage is pushed more by the folks that stand to profit from it, rather than for any benefit to people whose wages would be raised.
Looking at the chart, minimum wage earners (actually the whole bottom 50%) are not where the potential investment dollars are anyway.
LDAHL, in a free market economy, what difference should it make if wealth grows exponentially among a small minority of people and remains flat for everyone else? To me it's a signal of something wrong with the economy, and it makes the voice of the people very vulnerable.
OK then. What would you consider to be a necessary limit on income growth?
iris lilies
8-19-16, 12:01pm
I looked at the complete report at cbo.gov. It seems to have been released in August 2016, just recently. Odd, because Ive seen some of these charts before.
Anyway, if I am reading chart #2 correctly, one had to have only $1 million in assets in 2013 to get into the top ten percentile.
That is not a hard number to achieve. I am surrounded by people in that asset group--siblings, parents, friends. I guarantee you they got there through saving their not large salaries and investing in some form with not a lot of expertise but just common sense. They did not " invest" in consumer crap. They did not blow weekly paychecks on Air Jordans, pedicures, shiny wheels. They had the number of children they could raise with little outside help. They tend to stay married and live life drama free. They bought modest houses and paid off the mortgage. They paid cash for most everything.
They are The Millionaire Next Door personified.
I am so f-ing tired of having this lifestyle villified. Its not "right?" That is compete crap.
I will admit that I know older generations, people 50+ and up. I dont see the path to $1 million being that easy for next generations. And it may be that the next generation doesn't even want to grow assets, they will spend it on experiences. That is not wrong, but neither do internet warriors get to kvetch about poorer people when their choices purposely pu them on the bottom of charts like this.
iris lilies
8-19-16, 12:02pm
Iris, that consumeristic crap does increase wealth - for the people making, selling it. Sometimes I wonder if the push for increased minimum wage is pushed more by the folks that stand to profit from it, rather than for any benefit to people whose wages would be raised.
Looking at the chart, minimum wage earners (actually the whole bottom 50%) are not where the potential investment dollars are anyway.
exactly. Yes! Bingo, we have a winner.
could this chart be reflecting values of the populace to some extent? Do they get to spend money on the things they value? I say, sure, whyever not?
I'm still handling my mother-in-law's estate details. She passed away last year, ~90 years old.
She was a college professor her entire career, and divorced her husband, another college professor about 40 years ago.
She did not come from money, I visited her childhood home just a few months ago, a house smaller than my garage in a poor sheep-farming village.
Her estate, accumulated from simply saving and investing in very very boring things, was in the $3-6 million range. Some of the stocks she owned had been sitting in her account since the '40s....
catherine
8-19-16, 12:54pm
OK then. What would you consider to be a necessary limit on income growth?
Why do you assume I would advocate for a limit on income growth?
I do think the best options for making rates in income growth consistent across class/income levels would be:
Raise the minimum wage
Higher taxes on the super-rich
Close some tax loopholes
Make all higher education 100% tax deductible. I truly don't understand why mortgages are deductible but tuition is not. Doesn't make sense to me.
I don't understand why mortgages are deductible.
http://www.usnews.com/opinion/articles/2016-05-26/the-mortgage-interest-deduction-is-bad-for-schools-and-education
I also don't understand why a Ph.D. in Basketweaving Criticism should be deductible.
I don't understand why mortgages are deductible.
I don't understand why all expenses aren't deductible, limiting federal taxation to the return on savings and investments, which should be capped at no more than 5%.
iris lilies
8-19-16, 1:18pm
Get rid of all deductions,they are social engineering efforts and they pander to favored groups. I deducted mortgage interest for maybe, oh, 4 years of my life. It didn't hurt me not to do it and indtead served us well to knock out a mortgage.
Flat tax all the way, baby. Everyone pays in.everyone has skin in the game.
Why do you assume I would advocate for a limit on income growth?
I do think the best options for making rates in income growth consistent across class/income levels would be:
Raise the minimum wage
Higher taxes on the super-rich
Close some tax loopholes
Make all higher education 100% tax deductible. I truly don't understand why mortgages are deductible but tuition is not. Doesn't make sense to me.
Well, you seem to be objecting to the "super-rich" getting an "unfair" share of the growth in earning, so it seemed a fair question. And you certainly seem interested in using the tax system to redistribute wealth. If we're talking about putting a ceiling on income, it seems reasonable to ask how high.
I don't understand why mortgages are deductible.
http://www.usnews.com/opinion/articles/2016-05-26/the-mortgage-interest-deduction-is-bad-for-schools-and-education
I also don't understand why a Ph.D. in Basketweaving Criticism should be deductible.
You've got a point about the mortgage deduction. I look at mine every year on an after-tax basis, and when the point is reached that itemizing every year (net of a few other considerations) no longer makes sense, I plan on paying it off. I am happily gaming the system in a way I couldn't if I were in a lower bracket.
One interesting proposal vis-a-vis the Basketweaving Criticism issue is to require colleges and universities to cosign student loans. That would force them to consider the proportion of unemployable new graduates they release into the wild.
Well, you seem to be objecting to the "super-rich" getting an "unfair" share of the growth in earning, so it seemed a fair question. And you certainly seem interested in using the tax system to redistribute wealth. If we're talking about putting a ceiling on income, it seems reasonable to ask how high.
The charts I showed debunk the whole Reaganomics of the "rising tide" theory. If Reagan was right, you would see those curves running parallel to each other and the income bars also mirroring each other, but they don't.
So I don't care of those bars for the 1% are off the charts, as long as the other bars are trending in the same direction. If they are not, would you say the system is working well or not? Or do we just abandon the masses to sweatshops?
The charts I showed debunk the whole Reaganomics of the "rising tide" theory. If Reagan was right, you would see those curves running parallel to each other and the income bars also mirroring each other, but they don't.
So I don't care of those bars for the 1% are off the charts, as long as the other bars are trending in the same direction. If they are not, would you say the system is working well or not? Or do we just abandon the masses to sweatshops?
Of course you care. You want to tax them more and shift it downscale.
Even if you stipulate "trickle-down" to be a failure, it doesn't follow from that that "tax-and-redistribute" works. Every billion you confiscate from the undeserving rich will yield three bucks and change (less administrative costs) for the other 300,000,000 of us. You'll run out of billionaires long before your graph changes appreciably.
If we want more, we ultimately need to earn more. To earn more we need to become more competitive. To do that, we need to address the perverse incentives built into our tax system, take a good look at our often ridiculous legal and regulatory system, reverse the long decline in quality of our educational system, and many other things. We will ultimately need to adapt to technological and economic changes that will happen whether we like it or not.
We are fighting a "battle" with the populations of countries like China and India whose populations want the things they see us have in abundance. Enough clean food and water, safe housing, education for all the children, basic health care, etc.
We are fighting a "battle" with the populations of countries like China and India whose populations want the things they see us have in abundance. Enough clean food and water, safe housing, education for all the children, basic health care, etc.
I would argue that we do not, in fact, have any of those things in abundance. We do in my 'hood, for sure, but there are significant populations inside the US that don't. Rather than letting blood to confiscate and redistribute wealth why don't we simply invest in ways that foster creation of new wealth in the lower income/asset ranges? Any or all of the items on sweetana3's list would seem to be beneficial and a good place to start. We might even see a reduction in gun violence as a perk! ;)
I would argue that we do not, in fact, have any of those things in abundance. We do in my 'hood, for sure, but there are significant populations inside the US that don't. Rather than letting blood to confiscate and redistribute wealth why don't we simply invest in ways that foster creation of new wealth in the lower income/asset ranges? Any or all of the items on sweetana3's list would seem to be beneficial and a good place to start. We might even see a reduction in gun violence as a perk! ;)
agreed.....some of us are lucky enough to claw and scratch our way into a gated community......some of us are not. Chattanooga has shootings almost everyday, the amount has increased terribly over the past 10 yrs. If we put nothing into the children, this is what we have.
Powered by vBulletin® Version 4.2.5 Copyright © 2025 vBulletin Solutions Inc. All rights reserved.