Should California's expensive regions consider increasing the minimum wage to $15.00/hour? (Brea: 2013, renting)

[eccotecc]

ringwise,

I guess an honest job would be employment where both the employer and employee pay taxes and into social security. We all know there are many jobs where people earn wages that aren't reported. This could be income earned through legal or illegal endeavors.

[Krispytopher]

For a period of my life I worked at a retail store, we (my team) were part time averaging about 24-30 hours a week. If our pay was bumped up from $8 and some change to $15 then our work force would have been cut down drastically and we would have been expected to do just as much work in 10 hours.

I don't understand how the average joe can like this idea. For $15 the "junk" jobs will become much more competitive and much better/qualified workers will swoop them up before those that desperately need the money can blink.

Short answer: no!

[CarawayDJ]

Originally Posted by Hemlock140

We really won't know the effect for 5-7 years, when they actually start paying $15, since the law as passed is gradual with exceptions.

I'd argue that voters will never "know" the effects. The economy is so complex that it's difficult for even the most unbiased economists to accurately measure cause and effect. The key word is "accurately". Throw in partisan politics and everything is obfuscated. Opponents of the measure will attribute every single job lost to the measure and proponents will blame every job lost on something else and every positive thing in the economy on the measure. Because the economy is so complex you will never be able to decisively judge one side as being right and the other as being wrong.

In a nutshell, in 5-7 years the voters will never connect the dots between what they see then and what law they passed today. Voters in general can't seem to connect the dots anyways. Politicians don't help the cause with their endless half truths and obfuscation of reality (both sides).

[NewbiePoster]

Originally Posted by NorCal Dude

It will result in automating cashier jobs and other service jobs.

This means no more jobs for illegals.

Sounds good to me.

Dude, cashiering isn't where the illegals are working. They tend to do stuff that can't be automated, like farm labor and factory work. Those wages are kept low in order to keep American workers out, and keep production cheap. (Americans used to do those jobs.)

[1AngryTaxPayer]

Originally Posted by NewbiePoster

Dude, cashiering isn't where the illegals are working. They tend to do stuff that can't be automated, like farm labor and factory work. Those wages are kept low in order to keep American workers out, and keep production cheap. (Americans used to do those jobs.)

Unless the Company uses I-9 it's very possible.

[CarawayDJ]

Originally Posted by eccotecc

I'm just wondering if an increase in minimum wage will be a benefit to entry level workers since the increase in the cost of business will ultimately be passed on to the consumer. Is there an economic benefit if prices rise because of the increase in wages?

Just a few thoughts:

1. There really is no such thing as an increase to "only" minimum wage. Let's say that you do not have an entry-level job today and that you are making $15/hr. What are you going to expect when minimum wage is raised to $15? What will happen when you find yourself making minimum wage again? There is a reason why you were earning $15/hr and not minimum wage. You weren't performing entry-level work. You will expect an equivalent raise. Your employer will be pressured to raise the wages on all positions, not just the entry-level ones. If you were making $7/hr above minimum wage before it was raised to $15/hr, you will probably expect to still earn $7/hr above minimum wage after it is raised. So now you end up making $22/hr and you are happy. Ahhh, but now all those people performing more complex and skilled work earning $22/hr want more too. You are now earning what they do for an easier and less skilled job. And this continues.

2. Prices will rise, but it really depends on what percentage of the costs labor represents. It varies widely by industry. It will be absorbed easily in some businesses and crippling in others. It's not hard to imagine small restaurants or cafes already barely existing being forced to close shop or turn to illegal labor.

This is a good topic nonetheless. It's one where I agree with the desired effect but am skeptical with the approach. It might shock people to learn that many countries in Europe either have no minimum wage or it is fairly low. No European country has a minimum wage as high as $15/hr despite very high costs of living. They apparently found other ways to get there. I also worry about the effects of providing a disincentive for American workers to get ahead and sharpen their skills. At a time when we are so concerned about school standards, STEM, and competitiveness, we will also allow people to live just fine on entry-level labor? That is actually a good social question. Should entry-level labor earn a livable wage? There is nothing dishonorable with entry-level labor. We need someone to flip the burgers and work the cashier. Someone has to do it. Why should they not be able to do it and earn a decent living? The devil is in the details. What is a "livable wage". It's very subjective. Does it mean I can afford a decent car and be able to buy a home? Does it mean I can afford to share a rent with three other roommates, a bus pass to get to/from work, and can put food into my mouth?

At the end of the day I don't think you can ever have a system that is perfectly fair to all people. There is nothing you can do that only helps people without any negative side-effects that hurt others. We can only hope to help more than we hurt and that is often a guessing game that not even the most accomplished economists can all agree upon.

[shooting4life]

Originally Posted by CarawayDJ

I'd argue that voters will never "know" the effects. The economy is so complex that it's difficult for even the most unbiased economists to accurately measure cause and effect. The key word is "accurately". Throw in partisan politics and everything is obfuscated. Opponents of the measure will attribute every single job lost to the measure and proponents will blame every job lost on something else and every positive thing in the economy on the measure. Because the economy is so complex you will never be able to decisively judge one side as being right and the other as being wrong.

In a nutshell, in 5-7 years the voters will never connect the dots between what they see then and what law they passed today. Voters in general can't seem to connect the dots anyways. Politicians don't help the cause with their endless half truths and obfuscation of reality (both sides).

I agree with your second paragraph. It would be nice if a service based business (like a restraunt) kept prices the same then added a disclaimer that x% will be added to every sale to pay for the raise in minimum wage. That way people can see the additional costs of their decisions. A few companies were doing this with Obamacare, an additional line item in the bill showing the consequences of the governments decision.

Maybe this will get people to wake up if they see everything they are paying for.

[eccotecc]

It's nice to see that most are of similar mind as it pertains to a minimum wage increase.

Now for something additional to ponder. Can an increase in minimum wage be considered as an increase in taxes. We agreed that if wages increased at all levels of present income, and businesses increased prices to sustain their margins, then wouldn't it be reasonable to think that taxes on sales, income, and social security would also have to increase. Again, as previously mentioned, the consumer absorbs the increase in the cost of doing business.

This might be considered as a regressive tax which would build inflation back into the economy. This kind of tax would benefit government but not those of a lower economic status.

[slo1318]

Originally Posted by Gentoo

I think it was FDR who said that no business who can't afford to pay living wages has a right to exist. "And by living wages I mean more than the bare minimum, I mean the wages of a decent living". I also heard that if wages had kept up with the cost of living, they would be over 16 dollars an hour now. If all of this is true, what happened between then and now?

I'd have to disagree with FDR. Teenagers who know nothing getting their first job do not need a living wage. My main point was my second paragraph.

[Gentoo]

Originally Posted by slo1318

I'd have to disagree with FDR. Teenagers who know nothing getting their first job do not need a living wage. My main point was my second paragraph.

But, the majority of people working those jobs are not teenagers. So I will ask again, who will do those jobs once all those people who are doing them and can't afford to live here leave?