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Old 03-28-2016, 10:46 AM
 
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CA is working on a plan to raise min wage over 5 years to $15/hr. If a employee in a higher position gets $15/hr based on free market wages and an employee below then gets $15/hr based on min wage, assuming that the business can't function without both employees, what would likely happen?
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Old 03-28-2016, 10:50 AM
 
Location: Carolina
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Quote:
Originally Posted by FelixTheCat View Post
CA is working on a plan to raise min wage over 5 years to $15/hr. If a employee in a higher position gets $15/hr based on free market wages and an employee below then gets $15/hr based on min wage, assuming that the business can't function without both employees, what would likely happen?


You would know how it feels to be in North Korea or be any state employee.
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Old 03-28-2016, 11:01 AM
 
Location: Ruidoso, NM
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Quote:
Originally Posted by FelixTheCat View Post
CA is working on a plan to raise min wage over 5 years to $15/hr. If a employee in a higher position gets $15/hr based on free market wages and an employee below then gets $15/hr based on min wage, assuming that the business can't function without both employees, what would likely happen?
$15/hr employee will get a raise. The MW sets the floor that all the rest reference. There will of course be more wage compression than there is currently, and a small increase in prices. The only significant aggregate effect would be net benefit for the working poor to the detriment of everyone else.
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Old 03-28-2016, 11:19 AM
 
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you learn more skills or become the new minimum wage worker?

and the ones currently with little skill and hoping to make $15/hr all of a sudden... won't find jobs because the "new minimum workers" (from above) now crowd them out
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Old 03-28-2016, 11:47 AM
 
Location: Ruidoso, NM
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Originally Posted by eyeb View Post
and the ones currently with little skill and hoping to make $15/hr all of a sudden... won't find jobs because the "new minimum workers" (from above) now crowd them out
Complete nonsense, based on a flawed understanding of economics.

Assume businesses raise prices to compensate. In real terms, low end incomes go up, and higher end incomes go down. Aggregate incomes don't change. Aggregate demand will actually rise a little. No aggregate change in profits. No change in employment.
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Old 03-28-2016, 12:17 PM
 
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Originally Posted by rruff View Post
Complete nonsense, based on a flawed understanding of economics.

Assume businesses raise prices to compensate. In real terms, low end incomes go up, and higher end incomes go down. Aggregate incomes don't change. Aggregate demand will actually rise a little. No aggregate change in profits. No change in employment.
There are some things left out of your theory, because there are alternatives to simply keeping all min wage employees. Some employees (illegal aliens), will take cash as wages. There are also self serve options, like increases use of self checkouts. Outsourcing, importing and automation can be increased. These options would become more attractive.
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Old 03-28-2016, 12:17 PM
 
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What happens? You'd see tons of further automation of the low skill jobs. You would order your fast food at a kiosk because businesses won't pay $15.00 per hour for that position.
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Old 03-28-2016, 12:31 PM
 
Location: NE Mississippi
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Originally Posted by GeoffD View Post
What happens? You'd see tons of further automation of the low skill jobs. You would order your fast food at a kiosk because businesses won't pay $15.00 per hour for that position.
Right. The new 15$ an hour worker will be there to supervise the operation. He used to supervise 12 people, now he will supervise 2 and their equipment, and occasionally help out customers.
Go look at how Home Depot and Walmart use supervisor cashiers at the automated lanes. Each one of those automated check-out machines used to be a person.

If you used to make 15$/hour you probably will see no change in salary, but your job will change.

It is the people who are making $7.50 now who are in danger of losing their job.

Food for thought: It takes fewer people to supervise 12 people than 40. So some of those supervisors may see their job disappear.
It takes skill to manufacture, install, and maintain the kiosk, so those jobs may increase. But then in the future they may go the way of the TV repairman.
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Old 03-28-2016, 12:44 PM
 
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Nobody ever gets the economics right on minimum wage law threads....
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Old 03-28-2016, 01:35 PM
 
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Originally Posted by Listener2307 View Post
Right. The new 15$ an hour worker will be there to supervise the operation. He used to supervise 12 people, now he will supervise 2 and their equipment, and occasionally help out customers.
Go look at how Home Depot and Walmart use supervisor cashiers at the automated lanes. Each one of those automated check-out machines used to be a person.

If you used to make 15$/hour you probably will see no change in salary, but your job will change.

It is the people who are making $7.50 now who are in danger of losing their job.

Food for thought: It takes fewer people to supervise 12 people than 40. So some of those supervisors may see their job disappear.
It takes skill to manufacture, install, and maintain the kiosk, so those jobs may increase. But then in the future they may go the way of the TV repairman.
This thread is specific to CA, where it is now $10/hr. The plan is to raise it by $1/yr for 5 years.

So after adjusting to inflation, in 5 years min wage workers would get about a 35% raise. And each min wage worker would cost about $800 more per month full time, including the additional cost like social security.
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