The Minimum Wage Destroys Jobs

What is a ridiculous rate? Who determines whether or not it is ridiculous?

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socialists and labour unions, usually. They always complain that women (mostly them) don't get paid enough because they are on minimum wage

I'm curious: do women try to get better jobs? Or they are all waitresses?

This thing is sticky, and I don't like it. I don't appreciate it.

Originally Posted by Night Phoenix

Now play fair, I've answered yours - answer mine.

answer your what?

I am a dolphin, do you want me on your body?

My question, genius:

Quote:

What kind of idiot tries to support a FAMILY on six bucks an hour?

I was speaking idiomatically.

the kind that doesn't have any other better choice --- like i said, visit an urban center and the poor there are often working for minimum wage and supporting a family (trying, anyway)

What kind of toxic man-thing is happening now?

Ok, so then the question is - why don't they have a better choice?

Why do they have children when they can't do any better than a minimum wage job?

The simple fact of the matter is this: I've probably been to more hoods than you've ever heard of and people who work minimum wage jobs trying to support families are people who:

1) Got pregnant or knocked someone up while in high school
2) Had to drop out of school as a result to support those children
3) Have neither the requisite job skills or the education to get better-paying jobs

As such, raising the minimum wage will only hurt these kind of people because these are the FIRST people who lose their jobs when businesses have to cut expenses.

FELIPE NO

i conceded that in my first post of this thread -- it's sad, but this kind of measure would indeed hurt the individuals, if the economists are right about minimum wage raises being equal to job loss. at the same time, those very economists would predict that higher minimum wage would help our overall national economic strength.

that's my point, it's a conundrum and it's going to be a decision whose outcome no one will like either way.

What, you don't want my bikini-clad body?

The problem with the "minimum wage" is that the minimum wage is universal. It is zero. No job, no income, no wage. As it has been pointed out several times minimum wages decrease jobs, thus more people unemployed. However, what has not been pointed out is that most people who benefit from minimum wage are not the people who the minimum wage is intended to benefit. Most people on minimum wage are teenagers/students living at home, people using it as secondary income, people who are supported by non-minimum wage earners. Thus why is the extra cost incurred by society at large from businesses passing costs on to consumers being used to give more money to kids who work at burger king for the summer? What should be done is the minimum wage should only be applied to those who really need it. (The aforementioned, but rarer, $6.hr families). However companies would just not hire those individuals as they would just have to pay them a higher wage.

An aside to the poster who called Ontario a "have not" province. Are you nuts? Ontario is the havingest province to ever have in have-town.

I hope someone comes back to post more about CEOs/Executives/Greedy Republicans/Mysterious Cabals of Old White men being greedy and making "too much money". That argument is rational and not at all laughable.

Jam it back in, in the dark.

Originally Posted by Phoque le PQ

socialists and labour unions, usually. They always complain that women (mostly them) don't get paid enough because they are on minimum wage

I'm curious: do women try to get better jobs? Or they are all waitresses?

one little known fact is that waiters get paid less than minimum wage :3 they actually depend on tips. think about that the next time you go eat out at some restraunt ;p

and as a working woman, i get paid $7.00 an hour working in a deli at a grocery store. Keep in mind, I've worked in the same store (i started at about $5.15, minimum wage at the time) for nearing four years. Lets just say men who start working there just recently get paid as much as me (and even more than me), and all they do is cashier.
Iowa is raising minimum wage to $7.15 (i believe, its off the top of my head), and hell, that makes me feel like shit. I'd enjoy the extra money, etc, but the fact that a 14 year old boy who bags groceries will get paid just as much as me when I'm actually holding down 8 hour shifts and 30 hour workweeks (I'm still a student at this time, but during the summer I will most likely work 40+ hours).
But at least I'm getting paid more...

There's nowhere I can't reach.

That or you'll be fired.

They also don't depend on tips, employers are required by law to make up the difference if tips earned don't add up to the minimum wage.

How ya doing, buddy?

Lots of interesting perspectives here. I have a related story.

I work at Starbucks, in Iowa, where minimum wage was 5.15/hour.

Iowa just recently passed a law to increase the minimum wage from 5.15 to 7.25, (in steps, the first step was to 6.20 on April 1st, and the second stop is to 7.25 on January 1st, 2008).

Starbucks hired me at a starting wage of 7.00/hour. In a state that pays a minimum wage of 5.15/hour, that makes Starbucks a pretty attractive entry-level job. 1.50 more than the minimum wage? Awesome! Not to mention all the amazing benefits (but those have nothing to do with minumum wage so I'll leave those out of this discussion).

As a result, we got many many many applications for new employees, and we always had our pick of the litter for people wanting jobs.

To put all this into context...Starbucks is a fairly physical intensive job. You're on your feet your whole shift, you're moving around, lifting moderately heavy to heavy items (gallons of milk repeatedly, up to boxes and cambros filled with coffee and liquids). Basically, when I get home I'm usually pretty tired, and sometimes even exhausted. But the wage was worth it.

With the new minimum wage, Starbucks is going to comply by raising the starting wage to 7.25. What once was a job that paid more than 1.50 over minimum is now going to be a minimum-paying job.

It makes little difference to me in terms of pay now that I'm in management and my salary is not affected by minimum wage... but it's frustrating because we can't find the same quality of help as we used to be able to -- people can get easier jobs where they just stand (or sit!) around and make just as much as the hard-working employees at our store. What we're faced with now more than ever is a huge influx of highschoolers wanting jobs at our store, and the more dependable and harder working employees quitting (unemployment is low in Iowa, no shortage of jobs). People that are still in grade school are great help during the summer... but labor laws and school hours really limit the availability we can get out of them during the rest of the year. And people with office cubicle jobs want coffee every day of the year.

I'm slightly disappointed with the way that Starbucks intends to compensate for the increase of minimum wage. It's one of the few things that I haven't agreed with them on. But I can also understand how they don't want to affect their bottom line more than is necessary. I just hope they will realize the mistake if/when the quality of workers degrades to the point where it affects business and customer loyalty. Ideally they would maintain a steady 1.50 wage gap over the minimum to keep employees happy and keep the quality ones around.

I am a dolphin, do you want me on your body?

Originally Posted by ComradeTande

and as a working woman, i get paid $7.00 an hour working in a deli at a grocery store. Keep in mind, I've worked in the same store (i started at about $5.15, minimum wage at the time) for nearing four years. Lets just say men who start working there just recently get paid as much as me (and even more than me), and all they do is cashier.
Iowa is raising minimum wage to $7.15 (i believe, its off the top of my head), and hell, that makes me feel like shit. I'd enjoy the extra money, etc, but the fact that a 14 year old boy who bags groceries will get paid just as much as me when I'm actually holding down 8 hour shifts and 30 hour workweeks (I'm still a student at this time, but during the summer I will most likely work 40+ hours).
But at least I'm getting paid more...

Or with their increased pay they'll be able to put more money into the economy, which means that grocery stores will sell more or be able to sell their products for more, which means that a person who makes $7.15/hour can also get a raise.

Or, like in Guru's case, with everyone who was making minimum wage making $1.50 more an hour, they can now spend their money at Starbucks, which means that Starbucks could similarly raise their base pay.

Or, one could argue that Starbucks was paying their employees a fair living wage while people only paying $5.15 were not (yeah, yeah, teenagers and bullshit, there are plenty of family earners on minimum wage).

I was speaking idiomatically.

Last time my state raised the minimum wage was ten years ago. Maybe it shouldn't be pegged to inflation - I think the libertarian argument that minimum wage will destroy your livelihood and lead to rampant inflation is just ridiculous, but I'm not educated enough in economics to say that a minimum wage hike every single year will have minimal adverse effects - but honestly it was well overdue.

And for the record, I too was pissed that I was working a wage slave job for a year, with an additional year's experience previously, and that new hires were getting paid the same I was. It sucks but on the grand scheme of things, it's less 'destruction' and more 'kick in the pants'.

And another thing, and I don't care how many of you disagree, but if a company resorts to hiring illegals and paying them less than minimum wage, they broke two laws and they should be punished for both. If that means I have to pay a little more for my milk - and I don't think the market would bear some sort of dire out-of-control markup like some people will say - I honestly don't care. Fighting illegal immigration by rounding up families and throwing the book at charities is hilariously inept.

I don't even DRINK milk, that's why I don't care. I am totally unaffected by the problem of outsourced labor!

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Quote:

I'm slightly disappointed with the way that Starbucks intends to compensate for the increase of minimum wage. It's one of the few things that I haven't agreed with them on. But I can also understand how they don't want to affect their bottom line more than is necessary. I just hope they will realize the mistake if/when the quality of workers degrades to the point where it affects business and customer loyalty. Ideally they would maintain a steady 1.50 wage gap over the minimum to keep employees happy and keep the quality ones around.

Increasing their current entry-level pay would constitute a massive increase in overhead, though, meaning that they would seek to decrease their overall employment and increase the burden of an already physically demanding job to their remaining employees. The end result is better workers, like you said, but it also means limited opportunities for expansion.

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing. Alternatively, prices would go up to meet the increase in overhead, which also means that on the net, nobody has increased buying power.

Nothing about a minimum wage increase reflects any real creation of wealth, which is how workers are able to increase their buying power on the net, you're just shifting the burden of production to a smaller amount of workers, or lowering the buying power of consumers on the net.

Also, Lurker, about inflation. The lack of raise in pay to meet inflation is reflected in the overall price in goods. If workers aren't being payed more, then the price of goods provided by the employer will also remain the same, all things being equal. Unfortunately the devaluation of currency raises the price of raw materials, meaning that products have to rise in price relative to commodity prices. The solution isn't to raise the minimum wage, but to end inflation.

FELIPE NO

Originally Posted by Bradylama

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing.

So the choices are everyone gets next to nothing, or some people get nothing and the rest get a bit more?

What, you don't want my bikini-clad body?

That's how it works. Arbitrarily raising the minimum wage without any reflection on the actual productivity of minimum wage workers is zero-sum. Workers on the net aren't any more productive after the minimum wage hike than they were before. So the choice is, either everybody suffers, or the lowest skilled become economic and political losers doomed to cronic unemployment.

Of course, the other solutions would be to not increase the minimum wage and end inflation, but those are laughed at as entirely "unrealistic" by people who think inflation is a force of nature and not a real result of government fiscal policies.

How ya doing, buddy?

Originally Posted by BlueMikey

Or with their increased pay they'll be able to put more money into the economy, which means that grocery stores will sell more or be able to sell their products for more, which means that a person who makes $7.15/hour can also get a raise.

It doesn't and wont work that way for Kroger. The #1 Grocery Retailer that is known for paying thier employees crap pay(8 years with them, 7.75/hr - quitting in 2 weeks) they also have the worst overall work ethic among employees(which probably affects how future employers will percieve me when reading my application).

This will happen with places like Publix.

There's nowhere I can't reach.

Originally Posted by Bradylama

That's how it works. Arbitrarily raising the minimum wage without any reflection on the actual productivity of minimum wage workers is zero-sum. Workers on the net aren't any more productive after the minimum wage hike than they were before. So the choice is, either everybody suffers, or the lowest skilled become economic and political losers doomed to cronic unemployment.

If it's zero sum, then why would anyone care if it happens or not? =\/

Also, aren't you assuming that every dollar earned is of equal importance? What if the dollar between earning $5 and $6 for four people is much more valuable than the $5 the one person loses?

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It's not the same. In fact it's less. You're looking at a dollar less being circulated in the work place. So I guess my math is pretty off, I made a B in Pre Algebra Plus for Christ's sake.

But yeah, all other things being equal, that extra dollar being earned is of same relative value to the 5 dollars lost.

There's no real increased amount of consumption going on, because you have more money circulating among fewer people.

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But the value to a certain person. Could their standard of living increase enough with the extra $1 enough to outweigh the decrease in standard of living for the person making $5? Not talking about total economic wealth going on here, I'm talking about standard of living (where curves don't necessarily have to be straight lines).

Think of it this way, if you take away $100,000 from a CEO's salary and give $10,000 of it to 10 people making $10,000 a year already, would their quality of living most likely increase more than the decrease in quality of life for the CEO that lost 5% of his salary?

How ya doing, buddy?

Yes, but we're not talking about wealth distribution whose end result is a marginally smaller loss for the CEO, you're talking about wealth distribution that forces a fraction of the population into destitution. People think blacks must be stupid or lazy to be so poor in the inner city, but the fact is that you can't be either to survive ghetto economics! They can't get legitimate work because they simply can't perform well enough to be hired at the prevailing wage! Attempting to justify this kind of "benefit" is inhuman! Socialist bastards and unions have stacked the odds against the poor of this country by denying them the ability to compete and I'm sick of it.

What kind of toxic man-thing is happening now?

I guess it wouldn't be a Brady thread without "socialist bastards" making an appearance.

I hate unions, but I also am not about to allow a corporation to justify paying workers $1/hour.

Originally Posted by Bradylama

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing. Alternatively, prices would go up to meet the increase in overhead, which also means that on the net, nobody has increased buying power.

You can't claim that raising the minimum wage forces businesses to both fire people and raise prices. It's one or the other (assuming the owner knows anything about balancing a checkbook).

Originally Posted by Winter Storm

It doesn't and wont work that way for Kroger. The #1 Grocery Retailer that is known for paying thier employees crap pay(8 years with them, 7.75/hr - quitting in 2 weeks) they also have the worst overall work ethic among employees(which probably affects how future employers will percieve me when reading my application).

You felt you were paid crappy but you stayed for eight years??

That's the equivalent of spending $100,000 on a Toyota Corolla. If you feel you were getting a raw deal, you were free to quit. And if enough people shopped their employment services around, then they would be forced to treat their employees better.

You, effectively, are a justification for them paying people who have worked for them for 8 years $7.75 an hour.

FELIPE NO

Originally Posted by Bradylama

Yes, but we're not talking about wealth distribution whose end result is a marginally smaller loss for the CEO, you're talking about wealth distribution that forces a fraction of the population into destitution.

Umm...that seems like it's more aimed at the analogy than the actual point I was trying to make. If everyone is going to live in destitution at $5 an hour, but at $6 an hour some people can stop taking those second jobs and working eighteen hour days while one person gets fucked over, then isn't it beneficial to give those people $6 an hour instead of $5 an hour?

Quote:

People think blacks must be stupid or lazy to be so poor in the inner city, but the fact is that you can't be either to survive ghetto economics! They can't get legitimate work because they simply can't perform well enough to be hired at the prevailing wage! Attempting to justify this kind of "benefit" is inhuman! Socialist bastards and unions have stacked the odds against the poor of this country by denying them the ability to compete and I'm sick of it.

Ummm...ok?

What, you don't want my bikini-clad body?

Quote:

Umm...that seems like it's more aimed at the analogy than the actual point I was trying to make. If everyone is going to live in destitution at $5 an hour, but at $6 an hour some people can stop taking those second jobs and working eighteen hour days while one person gets fucked over, then isn't it beneficial to give those people $6 an hour instead of $5 an hour?

It's still not working. Nobody all of a sudden stops taking on a new job because they just earned an extra buck an hour instantly. You're also looking at a zero-sum game. At what point do you have to get before minimum wage workers stop taking on multiple jobs? 9 dollars an hour? 12 dollars an hour? How many people have to become unemployable just so 1/3 of the people at the minimum skill bracket don't have to take two jobs for a "living wage?"

Also, since I didn't clarify, the idea that an employer would keep all of their employees and raise prices is ludicrous. Doing so lowers sales and revenue, and a business owner would much rather keep the same overhead and keep the same product marketability than raise overhead and lose marketability. Like I said a long time ago, minimum wage hikes hurt small businesses and help the large corporate ones like Wal-Mart since they can easily eat the overhead.

Quote:

I hate unions, but I also am not about to allow a corporation to justify paying workers $1/hour.

And who's going to work a dollar an hour for, anything? You could make better money mowing lawns. The reason we even get payed higher than minimum wage is because entrepreneurs and other rival corporations compete for labor, and the wage earnings of a position as a result naturally gravitate to the actual worth of the labor.

Quote:

You can't claim that raising the minimum wage forces businesses to both fire people and raise prices. It's one or the other (assuming the owner knows anything about balancing a checkbook).

Isn't that what I said? I thought I presented it as an either/or situation, but I could've screwed up the delivery. My bad.

Quote:

That's the equivalent of spending $100,000 on a Toyota Corolla. If you feel you were getting a raw deal, you were free to quit. And if enough people shopped their employment services around, then they would be forced to treat their employees better.

You, effectively, are a justification for them paying people who have worked for them for 8 years $7.75 an hour.

Indeed. If you think you're deserving of a raise, nobody is going to negotiate for that except you. (Winter Storm) If you can't negotiate for one, then shop around for a job that will pay you more, and if you can't get a job that pays more then start saving money and go to classes in order to learn a trade. Then later on if you're dissatisfied with the trade you've learned you can use the money you saved from that to go towards a degree.

Addenda: Savings, though are a vicious game. Due to inflation it's being constantly devalued, and since the establishment of the Federal Reserve in 1913 the dollar has dropped in value 90%. Why would anybody want to save in an environment that forces people to constantly spend in order to derive the maximum value from their labor? It's why 401ks and other retirement plans which involve investing in stocks have become so popular. At least in that case your money can make some earnings (or by some horrible twist of fate you lose everything). With CODs and inflationary trends, there's no guarantee that the amount you saved will be worth any more or less by the time the account appreciates.

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Originally Posted by Bradylama

It's still not working. Nobody all of a sudden stops taking on a new job because they just earned an extra buck an hour instantly. You're also looking at a zero-sum game. At what point do you have to get before minimum wage workers stop taking on multiple jobs? 9 dollars an hour? 12 dollars an hour? How many people have to become unemployable just so 1/3 of the people at the minimum skill bracket don't have to take two jobs for a "living wage?"

There's some wage amount that will get people to stop working a second job in order to get by. I don't know what it is, and I doubt you do either, but do you see the reason why knowing that point could be important?

Also, do you know what zero sum actually means? Taking all the wealth in a country and giving it to one person creates a zero net change in wealth for a country, but I don't think anyone out there would argue the two situations are equivalent from any standpoint other than raw numbers.

Quote:

Also, since I didn't clarify, the idea that an employer would keep all of their employees and raise prices is ludicrous. Doing so lowers sales and revenue, and a business owner would much rather keep the same overhead and keep the same product marketability than raise overhead and lose marketability. Like I said a long time ago, minimum wage hikes hurt small businesses and help the large corporate ones like Wal-Mart since they can easily eat the overhead.

Don't smaller businesses tend to make one of their main selling points their exceptional customer service? You know, it's worth going to your local hardware store over Walmart because even though it's a little more expensive you're going to get expert assistance while you're shopping.

There's nowhere I can't reach.