Minimum wage in the US

[Toxn]

So a friend of mine brought my attention to the fact that the US is debating a universal minimum wage.

 

As I am not from the US, I was wondering: what is everyone's take on this?

[Priory_of_Sion]

If min wage is increased then prices of goods and services will increase thus you arrive back at square one. This isn't to mention that smaller businesses will just downsize leaving even more unemployed, you can also assume that larger companies can replace workers with machines if workers cost too much. A large increase would also spell a wage decrease for those who already make slightly above min wage until you get back to square one again. 

 

You ultimately want stuff to cost less which would increase the standard of living for those who make min wage or below. 

 

My semi-educated opinion.

[EnsignExpendable]

If businesses could increase prices for goods and services and still have the market sustain them, they will do so immediately, regardless of how much their employees make. I also don't see how a minimum wage increase would be a decrease for those making above minimum. They would still make as much money, maybe more.

[Toxn]

To update a little - I have now chatted with said friend about this at length and have some opinions, but want to see what the consensus on the US side is.

[Priory_of_Sion]

I also don't see how a minimum wage increase would be a decrease for those making above minimum. They would still make as much money, maybe more.

If minimum wage is $10/hr and is increase to $20/hr then an employee who makes $15/hr might not have their pay jump to $30(it could be $20 or $25 for all we know) so in effect their purchasing power is decreased. 

 

Also if a person makes $25/h and min wage is raised to $20/hr there is a chance that their wage may not increase at all and thus this would be a decrease in their purchasing power as prices rise.

 

This isn't the rule as they could all have their pay increase proportionantely to the increase in min wage. However I am skeptical that businesses would do that. 

[Donward]

Seattle has just instituted a $15 Minimum wage which will be rolled into effect over the next couple of years. It's at $11 now as I recall. There have been price increases for consumers and some restaurants have eliminated tipping. However, Seattle's economy with Amazon and whatnot has shrugged off most of the effects so far.

[EnsignExpendable]

If minimum wage is $10/hr and is increase to $20/hr then an employee who makes $15/hr might not have their pay jump to $30(it could be $20 or $25 for all we know) so in effect their purchasing power is decreased.

Also if a person makes $25/h and min wage is raised to $20/hr there is a chance that their wage may not increase at all and thus this would be a decrease in their purchasing power as prices rise.

This isn't the rule as they could all have their pay increase proportionantely to the increase in min wage. However I am skeptical that businesses would do that.

Your "purchasing power" gets reduced every time anyone gets a raise. Do you notice?

[Priory_of_Sion]

Your "purchasing power" gets reduced every time anyone gets a raise. Do you notice?

At what point would I notice? I don't know. 

[EnsignExpendable]

You wouldn't, that's the point. A couple of bucks per hour raise to some small portion of the population would affect you in approximately zero ways.

[Walter_Sobchak]

I remember when I had a job in highschool the minimum wage was $3.15 and hour.  

 

Anyhow, given the increasing disparity between working peoples income and the highest earning segment of the population, I would think it would be a good thing,

[Priory_of_Sion]

You wouldn't, that's the point. A couple of bucks per hour raise to some small portion of the population would affect you in approximately zero ways.

Huh, I didn't realize the portion of people on min wage was pretty small. Always assumed it was fairly large and would have a bigger impact if messed with. 

[Sturgeon]

I am agnostic about increasing the minimum wage. It's obvious that, on the one hand, the national minimum wage, adjusted for inflation is less now than what it was during my parents' generation (it is about 81%). Increasing it at least to that level is unlikely to End The Economy Of The USA As We Know It. Having said that, the minimum wage in 1945 was only 73% then of what it is today, adjusted for inflation, and I doubt anyone could say the late Forties were an economic slump for the US! There are a lot of reasons for that, but my point there is that the national minimum wage may not be the right string to pull for an economic improvement - maybe more investments should be made in better labor/industrial jobs than just trying to get Kroger to pay its employees $9/hr, where they may respond by opening a new bank of automated tellers.

What I will say beyond that is that minimum wage jobs suck, their pay sucks, and there's a serious problem with entry-level jobs in this country. Young people are unemployed and under-employed, for what I perceive as a variety of reasons. First, I think that employers have no faith in the entry-level worker, now, and that may be due to a variety of factors ranging from the spat of hit pieces put out in major publications against my generation, to there being an aggressively competitive market that shuts out workers who will need training in favor of those who don't, to Millenials just being a bunch of ungrateful lazy shits, why don't you have a job yet? Jesus, I paid for my college with a summer job you parasitic little bastard! Millenials appear to have responded by closing off, being fastidiously cheap, and seeking jobs in areas not dominated by Baby Boomers, such as tech and media. I would hazard a guess that if you surveyed Baby Boomers a majority would respond that they'd be more likely to hire another Boomer for any given job than a Millenial, even if the two had the same qualifications. This means that Millenials are likely to have a better chance, I think, with employers who are not Boomers. That necessarily means franchises, startups, new media, etc, where employers tend to be under 40. Those jobs also pay less than, say, finance, medicine, engineering, or law.

[Donward]

One of the complaints with minimum wage is if it is applied across too wide of a geographic area.

As I mentioned Seattle with its strong economy is pretty much able to shrug off any ill effects because there are enough god damn Californians moving up here so they can clog up my freeway, increase rents and chase out all of the locals.

However, if you go about 60-100 miles in any direction from Seattle in Washington state, you might as well be living in Idaho with how depressed the economy is in say Aberdeen. A 15 dollar minimum wage there would likely kill whatever non-governmental job there is.

[Sturgeon]

Yeah, I'm not sure what the reason is in seeing that you're getting paid 81% as much as your parents were to do the same job, therefore you deserve a 107% pay raise.

And, I'm given to understand that the California experiment with super-high minimum wage has not been a terribly productive one.

[EnsignExpendable]

There's probably a middle ground between doubling everyone's salary and making the minimum wage a living wage. Unless your lower class is that fucked, I don't know.

[Sturgeon]

There's probably a middle ground between doubling everyone's salary and making the minimum wage a living wage. Unless your lower class is that fucked, I don't know.

 

First, I think you need to establish what you mean by a "living wage". Second, before you touch the minimum wage, you need to unfuck the incentives that make employers hire people for 30 hours a week so that they don't have to give them healthcare.

[EnsignExpendable]

Nationalize the business and send the owners to Alaska.

[SergeantMatt]

Nationalize the business and send the owners to Alaska.

Hm, there is plenty of room for gulags in Alaska. I think you're on to something.

[CrashbotUS]

Minimum wage jobs used to be the things people did while pursing other options, like education. The US has managed to collapse the middle class to a point people are needing to work these service industry jobs as full time careers. It has also managed to con the younger generation with newspeak terms like "shared economy" which is simply a smoke and mirrors version of Victorian era piecemeal work. 

[Mike E]

Raising the MW effectively leads to inflation, which leads to a less valuable currency, which leads to less purchasing power as already noted. It is basically a never ending spiral of doom (sound effects here) because the Fed is allowing for more inflation to begin with, thanks to low interest rates and QE.

 

I think there are a few solutions; 

- Establish a higher MW for full time employees, and a lower MW for part-time employees. 

- Slowly deflate the currency, so a higher MW can be avoided. 

- Eventually rid of the MW, so employees can be paid what they are actually worth, and not a number forced upon the employer via government. 

[EnsignExpendable]

Have you ever worked for minimum wage? You're scheduled for up to an hour less per week than what counts as full-time, if they can help it you're scheduled an hour less per shift than necessary for you to get a lunch break. You can, in theory, get another "full time" job and work more hours there, but good luck getting the schedules to sync up. 

 

What they're "actually worth" is as little as humanly possible. We got through this in the industrial era. That number is forced by the government so people can actually live on this money and not end up unable to make ends meet in a job that, as Crashbot says, used to be a thing that you did on the side for beer money but is now the primary source of income for some people.

[Meplat]

It's a manufactured crisis intended to buy votes.

You make it so that people of late middle~high school age are of a class that is not easily hired, creating a demand for low cost labor. This is filled by the small number of people who'd normally be able to find work in slightly above minimal wage/entry level manufacturing, and by a tacitly approved amount of illegal immigration.

 

You couple this with an increase on the cost of basics, I/e rent., utilities and transportation, and you end up with a controllable, easily manipulated 'force' to drive up the base wage and further reduce the value of the dollar.

 

All in all if it works out you end up with a body of voters who eat up the swill sold by the politicians without having to think about -why- these people are seeming to "support" them.

[Mike E]

Have you ever worked for minimum wage? You're scheduled for up to an hour less per week than what counts as full-time, if they can help it you're scheduled an hour less per shift than necessary for you to get a lunch break. You can, in theory, get another "full time" job and work more hours there, but good luck getting the schedules to sync up.

What they're "actually worth" is as little as humanly possible. We got through this in the industrial era. That number is forced by the government so people can actually live on this money and not end up unable to make ends meet in a job that, as Crashbot says, used to be a thing that you did on the side for beer money but is now the primary source of income for some people.

Yes, part-time at that. Of course companies will try to skirt around a higher range, but actually, blurring the lines between part and full time could help that

And you think people would be willing to work for cents? This could just be in my area, but the Minimum Wage acts as an excuse to pay people less than what they actually deserve. Simply raising it would have potentially devastating long term economic effects, and in the end, would be unfair who deserve more.

As already discussed, what is going to happen to someone making $20 when the minimum is raised to $15, from ~$10? They will effectively be worth less, despite potentially getting paid what they are worth in the first place.

Deflating the currency to match the MM, rather than the opposite, would serve to increase a workers' purchasing power.

[EnsignExpendable]

What does "deserve" mean? The unfeeling free market determines the price of labour. If the market determined that they make minimum wage, well then, they make minimum wage. You think they should make more, but the people paying them clearly don't. Removing the minimum isn't going to make them pay more, it will make them pay less.

 

I still don't see how someone making $20/hr will be worth less if other people start making $15/hr. Will they be unable to feel superior to the plebs that used to make half as much as they did? 

[Mike E]

Deserve? 

 

If Person A works 40 hours a week in a demanding position, he deserves to be payed a greater amount than...

 

Person B, who works 40 hours at the same place, in a less demanding position. 

 

B being payed as much as A is nonsensical in this example. 

 

The whole point of removing the MW is that no-one can determine an average over how much everyone should be paid. As I mentioned, people are ******** over getting paid $10 an hour, what makes you think they will accept getting paid less?

 

A part-time toilet cleaner at McDonald's doesn't deserve to be paid $15 an hour, heck, $10 an hour. 

 

That person getting paid $20 will have a reduced purchasing power thanks to the effects of everyone else receiving higher wages...and what makes you think companies can pay higher-wages? I'm not a huge fan of large corporations, but even their revenue will go down, causing investments to drop among other things.

 

Raising the Minimum Wage is based on the false ideology that spending creates an economy, in this regard it is no different than 0% interest rates. 

 

There's also the issue of; raising the MW lowers the demand for labor.