Minimum wage in the US

[Toxn]

For real, though, I wanted to see what the opinion of people in the United States is (which obviously excludes me).

 

Here, for interest, is the conversation which kicked this whole thing off:

 

Toxn’s Friend (F)

hey12:45

profesional lawyer guy12:45

when you aren't working your lawyer hands to the bone12:45

would love your input on this12:45

https://www.reddit.com/r/AskReddit/comments/3k10q8/serious_small_american_business_owners_of_reddit/12:45

 

Toxn (T)

Fingers to the bone, dude12:51

But my lunch break is in 512:51

So is the issue minimum wage per se, or minimum wage in SA?12:52

 

F

minimum wage in the US12:52

they want to up it to $15 an hour12:53

 

T

Legally there's nothing stopping it from happening, at least as far as I know.12:54

 

F

see, its less about the legal stuff12:55

 

T

In terms of it's effect - my opinion has always been that there is a certain percentage of the work force which will underestimate the cost of living and take the job, so minimum wage is a good way to prevent companies from finding these people and gouging them for their labour.12:55

 

F

and more just the interest factor12:55

 

T

Ah12:55

Sent two-parter12:55

 

F

at our current exchange rate12:56

thats like R36k per month...12:56

for flipping burgers12:56

so how12:56

considering the worldwide economic situation12:56

do you remain competitive12:56

as a small bussiness12:56

if you actually pretty much have to accept12:56

you can never go global12:56

 

T

They can't outsource flipping bugers, yo12:57

*burgers12:57

 

F

we have had legendary penetration into the US in the last year12:57

our software seems to compare pretty well12:57

 

T

So cost is the same for all companies12:57

 

F

and our prices12:57

are like retardedly low12:57

compared to their in country service providers12:57

and yeah, I hear you on burger flipping12:57

but without some sort of income disparity12:58

I would think it would be a disincentive to actually gaining any more skills12:58

ie12:58

you can flip burgers and earn $15 an hour12:58

or you can go get a BS degree and write software and earn12:58

like 12:58

$16 an hour?12:58

 

T

Partly12:58

 

F

I don't actually have any answers mind you12:58

I just found it fascinating12:59

 

T

So, there's a whole mess of stuff here12:59

Like, what is the cost of living in the US?12:59

And is it relatively constant?12:59

My guess is no.12:59

 

F

thats also pretty interesting yeah13:00

its really not13:00

like 13:00

not at all13:00

so some places13:00

$15 an hour will buy you a house13:00

others13:00

you can't afford a box13:00

 

T

Exactly13:00

Next issue is the idea that wages are correctly market determined13:00

Like, why is a dude who fixes toilets paid less than a dude who works a spreadsheet?13:01

God knows I'd take the spreadsheet job even if it paid a bit less13:01

There are a bunch of jobs like this where the pay seems to be determined by not much at all13:02

See: veterinary nursing13:02

Per dis-incentivising work, it does seem to be somewhat of an issue in countries with really strong social systems13:03

But the US is so far from a scandanavian country13:03

 

F

true13:05

they don't exactly kick the social system ass13:05

see here13:05

there really is an incentive to like work harder13:05

and get more13:05

disparity between rich and poor notwithstanding13:05

and I am not exactly advocating the SA model13:06

Just looking at it13:06

it would appear to me13:06

like the way it is going13:06

your minimum wage is high enough13:06

that if you don'13:06

want to study13:06

you really don't need to13:06

the benifit isn't really there13:06

especially considering the cost of their tuition13:06

here, you can really justify skills development13:07

there13:07

like checking some of the comments13:07

arts degrees net you nothing13:07

engineering pays well13:07

but like, many of the people in EE are sitting at about double what the minimum wage would be13:07

but13:07

you end up with so much student debt13:07

your net result is pretty much the same13:08

unless you are in a household with two professionals13:08

or13:08

you come from a background where your parents can straight up pay for you13:08

it seems to me13:08

it would really just re-inforce the current disparity between rich and poor families13:08

 

T

I should also add it's not like being able to earn a similar wage flipping burgers or working in an office has ruined Scandinavian countries for competitiveness.13:09

But then, they already have a strong social system etc.13:09

I'm actually going to put this to some of the forum peeps I know, as they are overwhelmingly American13:09

I'll let you know what comes up13:09

Per your comment - I think part of the problem the US has is that nothing except having money already invested actually pays well anymore. There was this sort of surreal example where someone calculated that Bill Gates earns more now that he's cashed out his position at Microsoft13:13

Then he ever earned as founder/CEO13:13

It literally pays more to have a pile of money and put it into investment funds or whatever than it does to go and build up one of the biggest companies on earth13:13

so your social mobility is fucked no matter what13:14

What is your take in the South African context?13:16

Like, would you support a universal minimum wage of, say, R15 000 per month?13:16

 

F

R15k, no13:17

but13:17

R8k, yes13:17

in my head13:17

there needs to be a financial incentive to work hardwer and earn more13:17

especially if you DON"T move careers13:18

so13:18

if you start working at mcdonalds flipping burgers for R8k per month13:18

and after 5 years, you are like the most legend burger flipper ever13:18

you need to have the ability to get paid like R15k13:18

so if you can demonstrate better output13:18

there must be a matching slaray increase13:19

so your performance is rewarded13:19

I disagree STRONGLY with the idea of a general wage13:19

especially for unskilled work13:19

because over time13:19

unskilled work naturally becomes skilled work13:19

like, if you ever see builders next to the road13:19

dudes that like flip bricks up and just trust their team member catches it13:20

that is so totally skilled labour13:20

and if that technique makes the building go up quicker13:20

it should make u get paid more13:20

for putting in the effort to learn it13:20

 

T

Doesn't this sort of ignore the fact that almost nobody working at McD's flipping burgers will ever see a promotion? Like, the job is literally designed to use the least skill possible so that you can burn through unskilled workers without disrupting process.13:21

Similarly, there is no 'brick flipper 1st class' job to which a construction dude can aspire13:21

There are a whole swathe of jobs at the bottom income bracket for which there is no way to move upwards.13:22

So I guess the actual question is: how do you make it so that the legendary cement throwing guy gets his increase?13:22

Because you're right: minimum wage won't do that at all.13:24

There's also another issue which I find interesting: the effect of minimum wage on employment vs. the minimum wage as an economic stimulus package13:25

The idea is that, for a lot of jobs (burger flipping again) there is just no way ay present to outsource or mechanise, so raising the minimum wage won't actually affect employment rate.13:26

If this is the case, then a minimum wage is effectively an economic stimulus package which draws cash away from corporate savings and into the economy in general13:27

When you look at the issues which happen when companies simply save or invest money instead of spending it (see: the whole stock buyback issue for companies like google), then the idea of trying to extract those savings somehow looks very good to an economist concerned with the falling demand spiral13:28

So from this perspective a really high universal minimum wage, even if it doesn't do a damn thing to encourage hard work, would actually be a good thing13:29

That's one of the theories behind the gigantic boom in living standards following the second world war - that the literal destruction of capital and the full employment generated to do so functioned as a Keynsian stimulus writ large.13:31

By this metric it would be a good idea to grab and redistribute as much private capital as possible while maintaining full employment.13:31

So, again, up the minimum wage to nigh absurd levels, pass a whole bunch of legislation designed to punish large companies from saving or investing in capital rather than plant and beg, borrow or steal full employment somehow.13:33

End result in a world where politics isn't an issue: you get to stimulate the economy on a massive scale.13:34

End result in the real world: you get hounded out of office by the same elites who put you there to begin with.13:34

 

F

hmmm13:36

that is a good point though13:36

but on the one you made about legend brick flipper13:36

I think its one of our biggest downfalls13:36

is the lack of mobility for minimum wage workers13:36

there is no incentive to be better13:36

I think it would go a long way towards fixing some of our issues13:36

and all of the factories I have been in where there WAS an incentive13:36

have seen good increases13:37

mine were mostly in manufacturing13:37

but its stuff like pass rate13:37

so if you screw together widgets13:37

and you actually do it better and better13:37

places like microtronics will pay you more13:37

than if you did it the way you always did13:37

 

T

Interesting. When my brother was working in construction, he blamed the industry for deliberately ripping off its staff.13:38

Like, there used to be trade schools and everything13:38

 

F

the construction industry are bastards to a man13:38

manufacturing is easier to measure the output though13:38

 

T

Yup13:39

Restaurants are also famous for this 13:39

I guess it then depends on what workers are in what industry13:39

Maybe smart legislation would have a low set minimum wage plus a requirement for a certain number of wage levels or something 13:40

Like, your company has to have a certain number of 'improved' wage positions per minimum wage post13:41

But that gets really intrusive and easy to fuck up13:41

 

For background: my friend has one of the most insane work ethics I know of (he recently slowed down to 50 hours a week) and put himself through secondary and tertiary education (he told his folks to go fuck themselves and left the house at 16). He has also worked in the public and private sector, and has run his own company. So he has a lot of experience to draw on.

 

I accordingly expect folk to weigh his opinion a lot more than my gadfly-like musings.

[Belesarius]

For real, though, I wanted to see what the opinion of people in the United States is (which obviously excludes me).

 

Here, for interest, is the conversation which kicked this whole thing off:

 

 

For background: my friend has one of the most insane work ethics I know of (he recently slowed down to 50 hours a week) and put himself through secondary and tertiary education (he told his folks to go fuck themselves and left the house at 16). He has also worked in the public and private sector, and has run his own company. So he has a lot of experience to draw on.

 

I accordingly expect folk to weigh his opinion a lot more than my gadfly-like musings.

That was a really freaking fascinating discussion to read.  But I'm overtired, and a little high.  So I'm going to come back to this tomorrow and give it the sober thought that it deserves.

[Xlucine]

A staggered minimum wage between dependent teenagers and independent adults looks slightly promising. It provides a better living wage while getting the next generation work experience. 

 

It already exists in the UK

https://www.gov.uk/national-minimum-wage-rates

[xthetenth]

It's kind of cool and it's kind of really a great way to fuck people looking for some sort of light employment to let them get through school.

[Xlucine]

I don't like the lower rates for 18-21 year olds, since they straddle the dependent teens and independent adults barrier

[xthetenth]

I don't like the lower rates for 18-21 year olds, since they straddle the dependent teens and independent adults barrier

 

Yeah, as far as that goes, I have a friend who became basically unemployed once he got out of the lowest bracket, which is a pretty nasty way for a system to develop problems. Considering that in general the older the person the more they need the money, that's incentivizing problems.

[Toxn]

On a related note, it looks like the middle class might not exist in the US either:

 

http://www.theamericanconservative.com/articles/are-you-really-middle-class/

 

Edit: I find this interesting because I am trying on my end of the world to simultaneously start a family, own a house and so on. We're treading water at this point (no savings or investments over retirement-related stuff, no margin for things to go wrong, no debt not directly related to houses or cars and not a cent to spare) on a combined income of about a third of what that estimate states. Hopefully things on my end will improve in the next few years, at which point we'll be hitting all the categories mentioned about as hard as we can. Right now we're 7/12.

[xthetenth]

As far as such things go for a person a year into a career, 1, 3, 4, 5 (lol as far as that goes, I'm keeping my expenses crazy low), 6, 7, 8, 10, 11 and 12 kinda in a way is not bad at all. I'm trimming costs like mad to do it though, and I'm a single dude.

 

On the other hand, I'm a fucking software engineer, if the middle class here doesn't have room for software engineers I'm leaving.

 

I'm just really surprised that article wasn't by a leftist publication.