Will a Higher Minimum Wage Cost Jobs?

Off Topic Politics & World Issues
21

[quote]groo wrote:

Some of what you say I’d be willing to move on but I think that it should be out and out illegal to do business with companies that use slave, child or prison labor. [/quote]

I very much get this, and I don’t want to seem like I’m in favor of it.

But without these jobs these people are still owned and forced labor. These jobs didn’t make the slaves, and taking them away won’t end the slavery.

What it can do is give people the taste of freedom, so they can rise up out of the ashes.

China’s biggest national security threat isn’t Japan, the US or any country. It is a growing population that knows what it is like to own property, and make choices, and it sees freedom on the internet, the true libertiarian paradise…

22

[quote]countingbeans wrote:

[quote]Zeppelin795 wrote:
Since you fancy yourself an economist,[/quote]

Never said any such thing.[/quote]

No you didn’t, but I am. I agree with you general observations.

23

[quote]groo wrote:
Eh cause I would like a living wage law enacted.[/quote]

How about a living salary? Living wages don’t do jack to help those who need help. Look at teenage black men, with the institution of minimum wage their unemployment has increased one of the largest unemployed sectors of our mother country. I wonder how that affects the fact that black men make up a huge section of our prison population? I’d wager that there is some correlation, possible causation…

24

Two words: Subsidiarity and Solidarity.

25

[quote]groo wrote:

Any business that is running with minimum wage…which isn’t most small businesses its more crap like Walmart and fast food has already shrunk the labor force down to the minimum necessary to do the job. They aren’t carrying more workers because the wage is lower. They are already at the minimum number of workers needed for the job.
[/quote]

So what you are saying is that this companies will simply disappear from the market?

I agree.

26

[quote]countingbeans wrote:
So say I employ 10 people at 2000 hours for $7 an hour. Total cost to me of 182K a year. Now the government tells me I have to pay them $9 total costs now 234k a year, 52k more a year with a zero increase in productivity or value.

My options:

  1. I’m a good business man so I operate on the margins. So in order to maintain (not even grow, just maintain) year over year I have to add 52k to my prices. So that means the market would have to otherwise call for a 52,001 a year increase in what it is willing to pay for me to make $1 more in profit year over year.
    [/quote]

And the market will absorb it. It really only has two other options as it is a national increase in the minimum wage:

  1. Outsource (Over such a small amount? Not likely. Also unlikely to be the kind of job you can outsource)
  2. Innovate to reduce costs (in which case great for the economy)

[quote]countingbeans wrote:
2) Fire two people so my new costs are only a 5k increase year over year. This involves me asking 8 people to do the work of 10, for more money than they are worth… They will want raises (Ignoring small increases in overhead that come with firing people.)
[/quote]

Not really sustainable. If it was then you were not being efficient and it is a good thing that you let go the two extra people.

[quote]countingbeans wrote:
4) I can take 52k less in my salary. Which means I can take home less to my family, all while putting in the same hours, risking the same amount and doing the same amount of work for significantly less money. Um yeah, everyone wants everyone else to do this, and aren’t willing to do it themselves…[/quote]

Unlikely to happen.

27

[quote]countingbeans wrote:
You been at a place 3 years, got a $1 raise every year, and now all the people who just started make $1 less than you? You don’t want a raise?

Think man, you are smarter than this.
[/quote]

The truth is that jobs paying minimum wage (well almost) are based around skills that can be picked up within a matter of weeks. Someone with 2 years experience is worth little more than someone who has been there 3 months.

And as soon as you get a more reasonable gap people don’t tend to demand a raise in kind.

Not to mention that they might want a raise but it does not mean they will get one.

28

[quote]NickViar wrote:
Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself![/quote]

As stated earlier, the minimum wage pump is directed mainly at crappy, bottom of the barrel corp jobs at the storefront level or behind the scenes, like Walmart…

You guys want to talk about productivity, it tends to increase with better wages… Just do a little research, Walmart vs. Costco. Remember when I was bitching about parasitic business models? Well there is the comparison and example…

Another way to think about it, if they aren’t getting paid by the employer, you are paying for them somehow via some sort of program that goes to low wage workers, whether it be housing assistance, food stamps, etc…

So, do you want Walmart to pay something of a living wage, or do you want to foot the rest of the bill as a taxpayer? Just think about it for a second.

Okay, if you haven’t figured it out… Walmart isn’t the great business model the country has been selling it as… It’s parasitic on many levels and increases levels of poverty in locations where stores open… But, it brings stock owners tons of money, or at least it did for a very long time until employee theft/ unhappiness began causing the corp to bleed unprecedented profits.

Thank you for your time.

Here’s some Harvard article for you brains. The High Cost of Low Wages

Some NY times. How Costco Became the Anti-Wal-Mart - The New York Times

If your paying somebody 8 bucks an hour, in the green and having bi monthly vacations, you may as well be Benedict Arnold in my eyes. Unpatriotic, and parasitic.

29

[quote]Severiano wrote:

[quote]NickViar wrote:
Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself![/quote]

As stated earlier, the minimum wage pump is directed mainly at crappy, bottom of the barrel corp jobs at the storefront level or behind the scenes, like Walmart…

[/quote]

How else are people with no experience suppoesed to enter the job force?

30

[quote]countingbeans wrote:
'm obvi simplifyin:

[/quote]

OBVIOUSLY :slight_smile: you forgot to raise prices

31

All this is is a give-a-away to unions.

Most union contracts have a wage set on some multiple of minium wage — e.g., 5.3X minium.

This is just more gravy for the union thugs who support Obama, concealed as something “for the poor.” Very few people depend on minimum wage jobs for support. They are generally “extra” jobs for people who want to add a little to their bottom line or for the marginally employable (e.g., kids, ex-cons, HS drop outs).

Follow the money, people. It’s the most corrupt administration ever in the USA.

32

[quote]countingbeans wrote:
'm obvi simplifying but here goes:

Lets not forget that $1 increase in wage typically costs the employer $1.30.

So say I employ 10 people at 2000 hours for $7 an hour. Total cost to me of 182K a year. Now the government tells me I have to pay them $9 total costs now 234k a year, 52k more a year with a zero increase in productivity or value.

My options:

  1. I’m a good business man so I operate on the margins. So in order to maintain (not even grow, just maintain) year over year I have to add 52k to my prices. So that means the market would have to otherwise call for a 52,001 a year increase in what it is willing to pay for me to make $1 more in profit year over year.

  2. Fire two people so my new costs are only a 5k increase year over year. This involves me asking 8 people to do the work of 10, for more money than they are worth… They will want raises (Ignoring small increases in overhead that come with firing people.)

  3. Allow the additional 52k in costs to give my bottom line a haircut. Well the bank won’t like this, and it brings the overall value of my company down, effects ability to grow. Can’t hire more people without growth.

  4. I can take 52k less in my salary. Which means I can take home less to my family, all while putting in the same hours, risking the same amount and doing the same amount of work for significantly less money. Um yeah, everyone wants everyone else to do this, and aren’t willing to do it themselves…[/quote]

I see where you increased your price , The whole notion that you take home less money and work the same hours is amusing . Maybe a competitor would be happy to make less .

Raising wages would increase prices , but the over all winners would be the bottom . I subscribe that money floods up from the bottom rather than trickle down from the top . If minimum wage goes up everybody’s wages go up at least incrementally .

Labor is a commodity and Labor has the right to bargain . They just have to figure out the best way

33

Since it’s hard to compete with workers being paid ‘10 cents a day in the third world,’ our solution is to increase the minimum we can pay workers here? Yes, now that I think about it, how can that not work?

Way to stick it to those rich guys, America!

Pittbull, if a competitor is willing to work for less profit, what is stopping them from doing so now? Why does the government need to force it?

Labor certainly does have the right to bargain! When has anyone claimed otherwise? It’s not bargaining when one side uses force, however. It’s no longer a voluntary contract, which employee/employer deals should be, at that point.

34

% Corporate tax rate rather than just specific Corporations being tax exempt or even get subsidies

35

[quote]countingbeans wrote:

[quote]NickViar wrote:
Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself![/quote]

You know what you are right.

Everyone should just get paid 100k a year for every job, no matter what it is. Then everything will be perfect.

Yup, no issues there, none at all.
[/quote]

Communism FTW!

By the way CB I agree with your premise.

36

I am going to start with a rant.

Like Football, everyone is a fucking armchair Joe Namath when it comes to businesses and the economy. Left, right, it doesnt matter, people parrot the same fucking shit without ever taking accounting and econ 101.

Lets start with the comment above and the oft villianized “corporate tax rate”. A corporation invests in and utilizes capital to make products that society wants. This is different from being an INCOME based worker. If you are working your 9-5, you are not investing your capital and taking RISK in your job.

Furthermore, there is US GAAP reported corporate taxes, and federal income tax. Many times corporations have deferred taxes, which would lower their current period tax. Companies with high PPE will have high depreciation rates and lower taxable income.

This professors argument is not even in favor of the minimum wage hike. He mentions the disruptions that it would cause and the main issue being a lack of small business credit.

The Harvard Business review case citing CostCo and Walmart (more specifically, Sams club) is a perfect example of letting the fucking market work. CostCo is blowing Sams Club out of the water in market share. They have lower turn over and high employee productivity. They attract and retain candidates because of their corporate culture and wage, but it is not at the point of a gun. They are winning. So in that sense, I agree, but you cannot FORCE a business to make decisions in this manner.

37

The give away to the unions comment by JB is also interesting given how this “proposal” comes at the same time as the immigration overhaul that is driving Trumka and other union bosses nuts.

This is BO’s mollification, ensuring big D gets the brown vote and the union vote…

38

[quote]666Rich wrote:
I am going to start with a rant.

Like Football, everyone is a fucking armchair Joe Namath when it comes to businesses and the economy. Left, right, it doesnt matter, people parrot the same fucking shit without ever taking accounting and econ 101.

Lets start with the comment above and the oft villianized “corporate tax rate”. A corporation invests in and utilizes capital to make products that society wants. This is different from being an INCOME based worker. If you are working your 9-5, you are not investing your capital and taking RISK in your job.

Furthermore, there is US GAAP reported corporate taxes, and federal income tax. Many times corporations have deferred taxes, which would lower their current period tax. Companies with high PPE will have high depreciation rates and lower taxable income.

This professors argument is not even in favor of the minimum wage hike. He mentions the disruptions that it would cause and the main issue being a lack of small business credit.

The Harvard Business review case citing CostCo and Walmart (more specifically, Sams club) is a perfect example of letting the fucking market work. CostCo is blowing Sams Club out of the water in market share. They have lower turn over and high employee productivity. They attract and retain candidates because of their corporate culture and wage, but it is not at the point of a gun. They are winning. So in that sense, I agree, but you cannot FORCE a business to make decisions in this manner. [/quote]

The problem with the CostCo and Walmart example is that someone at the top is still making more money than ME! You certainly can force decisions in that manner(at the point of a gun). There are more MEs in this country than there are business owners. Therefore, there are more votes coming from people who have no idea how to run a successful business. WE have learned our whole lives that this country is a pure democracy and whatever the majority wants should go(screw the rights of the minority!), so WE(those who are unable to run a business) can use the government(force) to make business owners make the decisions WE want them to. How can such a system not work? It’s genius.

39

[quote]666Rich wrote:
I am going to start with a rant.

Like Football, everyone is a fucking armchair Joe Namath when it comes to businesses and the economy. Left, right, it doesnt matter, people parrot the same fucking shit without ever taking accounting and econ 101.

Lets start with the comment above and the oft villianized “corporate tax rate”. A corporation invests in and utilizes capital to make products that society wants. This is different from being an INCOME based worker. If you are working your 9-5, you are not investing your capital and taking RISK in your job.

Furthermore, there is US GAAP reported corporate taxes, and federal income tax. Many times corporations have deferred taxes, which would lower their current period tax. Companies with high PPE will have high depreciation rates and lower taxable income.

This professors argument is not even in favor of the minimum wage hike. He mentions the disruptions that it would cause and the main issue being a lack of small business credit.

The Harvard Business review case citing CostCo and Walmart (more specifically, Sams club) is a perfect example of letting the fucking market work. CostCo is blowing Sams Club out of the water in market share. They have lower turn over and high employee productivity. They attract and retain candidates because of their corporate culture and wage, but it is not at the point of a gun. They are winning. So in that sense, I agree, but you cannot FORCE a business to make decisions in this manner. [/quote]

You can say this until you’re blue in the face, many here won’t listen. You know they read a book, or worse an article, one time and now they are experts. Then you have people here that have owned business’, are economist, accountants, etc… and they are looked at like they are nuts.

I have a BS in Accounting, almost an MS in Accounting, and am a Budget Analyst for a living and I wouldn’t even begin to try and tell someone with certainty how an increase would affect employment. Off course, that’s because I recognize how complex reality is and how seemingly small expenses given time can have drastic consequences. I also understand as was pointed out by Jewbacca (SP?) this is political as much it is economical.

40

[quote]666Rich wrote:
The give away to the unions comment by JB is also interesting given how this “proposal” comes at the same time as the immigration overhaul that is driving Trumka and other union bosses nuts.

This is BO’s mollification, ensuring big D gets the brown vote and the union vote…[/quote]

I can Buy it just like the same train of thought goes for why Mitt and Zeb :slight_smile: will vote Republican