California $15 an hour minimum wage passed

[TrainChaser]

"Minimum wage was not designed for people to "survive" on. It was intended only as a minimum base wage for starting workers new to the labor force, marginal performers, second change employees who have had run-ins with the law or former employers, students who are living at home and want a part-time job to obtain work experience to put on their resume for when they apply for their real job, etc. "

WHERE ON EARTH did you come up with THAT???

A minimum wage was created to prevent employers from paying slave-labor wages. It was created toward the end of the Great Depression (relatively speaking). People who had businesses were hiring children because they would accept less than adults would (like 50 cents a day, from sunup to sundown). Businesses that were literally the only game in the area (think 'coal mine') would pat themselves on the back because they would only pay their (adult) miners 21 cents for every ton of load loaded. Some of these businesses got all of their money back by owning company stores, where they charged inflated prices and the people were half-starved.

The easiest people to fool in America are the ones who don't know their history; they'll fall for any fake story that sounds reasonable.

 

[sushidog]

The point is, what employer would hire marginal workers, like the afore mentioned group, if they had to pay them $15 and hour? None. If I'm going to hire someone for $15 an hour he better work his arse off to earn his keep or I will be forced to let him go. At $8 an hour I can afford to hire an inexperienced person or a marginal performer, saving budgeted payroll dollars my higher skilled employees doing more demanding and challenging tasks. Or would you rather that they priced min wage so high that employers were forced to automate the menial jobs like burger flippers in a fast food establishment? As soon as it makes economical sense to do so, this what we will see: http://www.businessinsider.com/burger-robot-could-revolutionize-fast-food-industry-2012-11 Of course you still need one or two smart people that you can afford to pay $15/hr to run and maintain the burger robots which replace 4-5 others lower skilled workers (and make fewer mistakes, doesn't get sick, doesn't ask for time off, doesn't need employer funded Obamacare, etc.) so it pays for itself in a single year.

Then all of these people would be forced out of the workforce to go on welfare, food stamps, etc.. Taxes will have to be raised to pay for the larger percentage of unemployed dole earners, and guess where that money will come from, the new "middle class" really lower class $15/hr wage earners - and the cycle continues. It won't affect the rich much at all. The ones hurt the most (other than the huge number of new unemployed workers) will be those living on a fixed income which won't rise when the cost of goods and services are driven up to pay the higher wages.

I witnessed what happens when min wage is raised when I was the manager of a computer store in 1996. I saw min wage rise 50 cents an hour from $4.25 to $4.75/hr. Most of our employees were students working part time 20-30 hrs/wk. All the new hires were glad to see the increased wages, but the workers who had been with us for a few months and were making $4.50-$4.75 an hour didn't receive a penny more than the government mandated new min wage. We had a shift leader quit who was making $1 more than min wage when he discovered that his wages would not rise either and he thought it was unfair that someone who had been with us a year and was a supervisor, was only making 50 cents more than an unskilled new hire. We were in a very competitive industry, so the people I worked for chose not to raise our prices to make up the 50 cent difference, but if we had to double our wages we would have either had to raise prices (fueling inflation) or gone out of business (with everyone losing their job) as our small profit margin couldn't have absorbed the increase. In reality both would have happened. We would have fired about a third of the staff (the newbies who were benefiting the most from the min wage increase would then be unemployed and would be hurt the most) and raised prices a little hoping that the labor cuts would make up for the loss in sales - or another round of firings would be due. This is the nature of business, and what will happen when they double min wage. Watch and see.

Chip

 

[sushidog]

You are wrong Chip.  Research history.  FDR meant it as a wage a person could survive on.

http://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimum-wage/


http://www.presidency.ucsb.edu/ws/?pid=15405

Here's a history of the Federal Minimum wage. http://www.thedigeratilife.com/blog/federal-minimum-wage-history/

Tell me, at what time in history could a person ever live off the minimum wage? When I started work back in 1970 I was making the min. wage. then $1.45/hr. Who could live off that, even then?

No being able to live independently off the federal min wage may have been a dream of some, but it will never happen because as you raise the wage to say $100 an hour (absurd, but to make the point) a cheeseburger made by min wage earners will be $50-$75. Rent that is $1,000 month now will rise to $10-$12,000 a month and so on. I wish it were so, but it was only a dream of FDR's "great society" what we call socialism today.

Chip

 

[GotSmart]

The CEO of McDonalds made $7,900,000.00 last year.

Figuring a 52 week year, and a 40 hour week, that is $3,798.07 an hour.

That is 475 times what an $8 an hour worker makes if they were allowed full time.

 

[sushidog]

They can pass a law to raise min wage to anything we want, and give everyone free health care (paid for by everyone other than you, of course as nothing in life is free) and do any other socialist program they desire. And maybe they will, but we will soon learn that there is no free lunch, and doubling the min wage will double the price of practically everything.

Let's look at it another way from my personal perspective - a person who has advanced in his career - someone you think wouldn't be affected much by raising the min. wage.

I work as a corporate specialist for a supermarket chain and have about 50 department managers across as many stores in 3 states who I train and oversee, spending a lot of time on the road to accomplish my job. I also do special projects, plan and execute special catering events, festivals, etc. It is a demanding job which requires lots of hours. I put-in around 75 hours a week on average and make a salary of $1,100 per week for my efforts. If one would convert this to an hourly wage, with time and a half for overtime after 40 hrs (as is federal law) it equates to less than $12/hr. If min. wage was raised to $15 hr what do you think would happen to my job/wage situation?

a. They would fire me and hire someone willing to work cheaper.
b. They would continue to pay me what they do now in violation of federal law (as I still punch a time clock daily, documenting my hours worked.)
c. They would pay me the federal minimum wage (which is less than what the 50 or so dept. mgrs. I supervise earn.) This would equate to $1,387/wk.
d. For morale purposes and to be fair, they would pay me commensurate with the wage increase they would pay the dept. managers (who earn less than $15/hr now) so let's say they would pay them $20/hr (only $5 an hr more than unskilled new hires who they must train, develop and supervise – which is their current pay differential to current new hires.) This would equate to $1,850/wk (at $20/hr)
e. Or they would pay me a little more than the people I supervise on a per hour basis (a fair and reasonable solution, right?) Let's just say 10% more than the people I supervise, or $2,100/wk ($22/hr - about twice what I'm currently paid)

If they do give me a fat pay increase (along with everyone else on the payroll as well) then expect your grocery prices to skyrocket. If labor represents around 20% of the price of food at the retail level and another 30% at the wholesale, packaging, processing, transporting, etc. levels (all added together,) then expect your grocery prices to double if they implement a $15/hr min wage. It can't happen otherwise.

Chip

 

[highdesertranger]

I do not see the connection between a CEO and a minimum wage hourly employee. 2 completely different categories and skill sets. I do not believe in pitting the classes against each other. for you history buffs think of where this was done in the past and the outcome. most of the time the bottom rung of society that rose up to overthrow the status quo ended up worse off then they were before. highdesertranger

 

[GotSmart]

So you guys see nothing wrong with giving a majority of workers a yearly wage of $16K so the boss can make almost $8million ? 

Because that person making such a low wage, the system must pay to subsidize with food stamps, health care, and public housing.

The rich get richer, the poor get poorer, and everyone in the middle pays taxes.

Is tat fair?

 

[highdesertranger]

I am not saying it' fair and I agree our tax system is totally efed up. we have a lot of problems right now. I don't think we need class warfare thrown in. I really can't say more without it being taken as political. highdesertranger

 

[sushidog]

So you guys see nothing wrong with giving a majority of workers a yearly wage of $16K so the boss can make almost $8million ? 

Because that person making such a low wage, the system must pay to subsidize with food stamps, health care, and public housing.

The rich get richer, the poor get poorer, and everyone in the middle pays taxes.

Is tat fair?

I don't think that way. What is fair is paying someone what they are worth. If I hire someone who doesn't make me much money he is worth less to me than someone who earns me more. When considering hiring a CEO, they can either make the company tens or even hundreds of millions or cost the company the same. Naturally you want the best qualified person for that job regardless what it costs you, as a cheap but ineffective CEO, or even a moderately priced but moderately performing CEO would be a poor choice to leverage my investment in the company. The relative worth to a company of a CEO and a line worker is not even on the same scale. Just as the compensation for sales positions are performance based, a CEOs compensation should also be performance based - if I were in the board. A good CEO should desire this too. But this is the real world where businesses must compete for top talent and often pay a premium price to get the best. I see nothing wrong with this arrangement, as it is the American way. The reason top CEOs make such great money is that they are scarce, while low talented workers are abundant - even more so as illegal aliens willing to work below min wage, drives wages down. More workers competing for fewer jobs lower wages. Less qualified workers available for an abundance of jobs means employers must pay more to get the help they need. Reduce the number of foreign work visas, enforce immigration laws for foreigners overstaying their visas and wages (not just minimum wage) will also rise, as will incentivizing businesses to keep them here and not move their factories abroad. Many things can be done to raise wages for American workers, but I believe that direct government intervention in raising minimum wage is not one, as it always has negative unintended consequences, such as lowering the standard of living for seniors and other people on a fixed income.

Chip

 

[Gunny]

Would $15 an hour get young couples just starting out over the hump and into their own place? I live in a Weekly/ Monthly place called Budget suites, I pay by the month and it's $1050. I am considered a resident. Many of the young couples here pay weekly and then extras are added by the State and County as 'entertainment ' taxes taking their rent to about $315 a week. 

There are several old retired types like me that the rent is not a big deal, I don't need food stamps or whatever. But these kids (and I call under 25 kids) work at 10 an hour but the fast food and restaurants don't give them 40 hours a week so they can be considered full time and get benefits. Many have a kid or two (it's their choice and I don't fault them for that) with both parents working and just barely making it. Many times I have bought an extra ham or roast and a couple of bags of potatoes that  I "need to get rid of before they go bad". No one in these United States should go hungry, Period.

They are trying to save to get a regular apartment which would be first and last months rent, deposit, deposits on utilities and all the other things associated with having your own place. Many are on a housing waiting list that I am told is almost 2 years. This is in Ft Worth Texas, doesn't seem right to me but I am surprised it takes so long. 

People on this forum are smart, we all know that any raise is passed on to the consumer. There is no free ride. 

I won't get political, but there are thousands of Pork Barrel projects funded by both parties and aid to countries who would destroy us if given the chance.

I wish there were an easy answer, some folks need a break. Rob

 

[highdesertranger]

let me ask this, why don't they get 40 hours a week? I bet most don't get 30 hours a week. highdesertranger

 

[GotSmart]

let me ask this,  why don't they get 40 hours a week?  I bet most don't get 30 hours a week.  highdesertranger

Because by not giving employees 40 hours a week, the employer does not have to provide health insurance.  The companies use that loophole to bypass the law.  People are forced to work two part time jobs so they can afford to be able to have a roof over their head.

 

[sushidog]

To avoid the paying the benefits that full-timers get, like Obamacare, that to remain competitive the businesses simply can't afford. Of course they could pay them anyways, and raise their prices an appropriate amount to cover it, but then their customers would simply shop at the competition which has lower prices because they keep their overhead low.

Chip

 

[highdesertranger]

exactly they do it to avoid paying for the benefits. so what do you think will happen with more government regulation? as in a higher minimum wage.

I will say it again, "when you make it more expensive for business to do something, they will do less of it." it's simple. highdesertranger

 

[WriterMs]

Maybe some facts would help.

Here is a quote from a 2014 article and study. I'll put the link at the bottom for those with bandwidth who want to read more. But Google "success of higher minimum wage" and you will find many other studies that show the same result:

[in article, there is a chart showing the states that have raised their minimum wage higher than other states]
"Each of these states has experienced higher employment: When critics lambaste an increase in the minimum wage in America, they often cite that it would be a job killer, an economic burden, and harmful to business.

New data may have debunked these arguments. Ben Wolcott of the Center for Economic and Policy Research found that in just the past five months, the 13 states that have increased their minimum wages saw higher employment growth than the states that did not.

It's not definitive, but the new results provide evidence that boosting the minimum wage does not hurt the economy.

Putting the job killer theory to death. Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington have all increased their minimum wage either through legislation or through automatic increases tied to inflation. As a result, the employment rate is up in all those states by an average change of .99% compared to the first 5 months in 2013, which saw an average change of .68%.

Wolcott found that 12 out of the 13 states saw employment increase. Nine out of the 13 saw growth that is beyond the national median rate. This means that higher wages are not curtailing job growth because the states with an increased minimum wage mainly saw faster job growth than states that maintained their lower minimum wages. ...."

https://mic.com/articles/92983/here...t-increased-minimum-wage-this-year#.of3rWu1Cj

 

[sushidog]

Maybe some facts would help.

Here is a quote from a 2014 article and study. I'll put the link at the bottom for those with bandwidth who want to read more. But Google "success of higher minimum wage" and you will find many other studies that show the same result:

[in article, there is a chart showing the states that have raised their minimum wage higher than other states]
"Each of these states has experienced higher employment: When critics lambaste an increase in the minimum wage in America, they often cite that it would be a job killer, an economic burden, and harmful to business.

New data may have debunked these arguments. Ben Wolcott of the Center for Economic and Policy Research found that in just the past five months, the 13 states that have increased their minimum wages saw higher employment growth than the states that did not.

It's not definitive, but the new results provide evidence that boosting the minimum wage does not hurt the economy.

Putting the job killer theory to death. Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington have all increased their minimum wage either through legislation or through automatic increases tied to inflation. As a result, the employment rate is up in all those states by an average change of .99% compared to the first 5 months in 2013, which saw an average change of .68%.

Wolcott found that 12 out of the 13 states saw employment increase. Nine out of the 13 saw growth that is beyond the national median rate. This means that higher wages are not curtailing job growth because the states with an increased minimum wage mainly saw faster job growth than states that maintained their lower minimum wages. ...."

https://mic.com/articles/92983/here...t-increased-minimum-wage-this-year#.of3rWu1Cj

Cool I'm willing to be proven wrong, but you will have to describe the economic mechanism involved. How do businesses' expand when they have less retained profits, perhaps even negative profits (that means they are losing money so must close their doors and let everyone go) if they must pay out a higher percentage of their revenues in payroll? And if they are all forced to raise their prices to make up for the increase in their payroll, isn't everyone but minimum wage earners hurt by this? They get a 50% raise but everyone else must pay 10-20% more for their goods and services. What about those who are on fixed income. These poor people just got an effective pay cut. In my view, raising min wage to $15/hr is just a redistribution of wealth scheme, you know Marxism "from each according to their ability to each according to their needs." I'm a mid-level corporate manager, and I know I'll never make the proposed $15/hr minimum wage unless I quit my job and get rehired as a door greeter or some such, then instead of getting 75 hrs/wk as I am now I'll get 20-30 hrs, losing all benefits and having a net loss in income just to get a higher "rate."

Let's make it easy. I have an oil change business selling my labor only (to simplify things for the illustration). I currently pay my "technicians" $10 hr (on average) and it takes 2 of them, on average 15 minutes to do an oil change, costing me $5. I must pay rent for my building, advertising, garage keepers liability insurance (very expensive, but required by law), recycling fees, regulatory compliance, workman's comp, electricity, bookkeeping and legal costs, payroll taxes, cleaning supplies, facility maintenance and repairs, etc. to the tune of $10/oil change (to keep things simple) when all is said and done. Now let's say I charge my customers $20 for an oil change, netting $5 gross profit (less whatever I must pay my manager to run the place - let's say 10% of revenues or $2, leaving me only $3 net profit/ oil change.) Now the government comes in and says I must pay my workers $15/hr ($5/hr more than I am now.)

Do you propose I raise my retail price to pay for this increase (losing business and forcing me to either cut hours or let some folks go)? Or do I pay the extra $2.50 labor/oil change. leaving me only 50 cents in retained profit? And if you do want me to cut my profits by that much, how do I pay my managers and still have enough to expand my business, open new locations and hire new people? Remember, I have to eat too and am entitled to a reasonable return on my investment - or I'll close up shop and invest my money somewhere else) Wouldn't it be more logical to demand that my employees now must work much harder to earn that huge pay increase, increasing their speed to only 10 minutes per oil change or get replaced? How many employees will I lose (and workers go unemployed) because of this new law that forces me to fire all but the best and fastest workers or go out of business? What if I have a different type of business, say a retail store or grocery and my business model is based on an $8/hr labor rate, making my wages almost double, magnifying this effect?

If you have another solution or an explanation how this can work in the real world, then let me know. I'm all ears.

Chip

 

[flying kurbmaster]

there is no way anyone, will ever convince me that these CEOs with multi million dollar salaries are earning it, what the hell could they possibly know that is worth that kind of money, it is all hype. Like hairdressing, Nor will anyone convince me that movie stars or sports stars earn it either, There is a people factor in an economy, it can't just be about making money or no one has a life, including the CEOs and people we put high status on. Who wants to work 75 hours a week? that is no way to live. We should realize that having a balanced work play, in the long run is better for the health of the economy, the people, the county and the planet. Gives us time to reflect, learn, and create. Sustainability, not boom or bust, in all aspects for a robust, civilized future.