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If the Feds decided to increase the minimum wage to $15 an hour, those that are smart enough to move to the states/cities with the lower/lowest cost of living will come out the biggest winners. Like moving to Las Vegas, Phoenix or Tucson.
You are conflating low real estate values with a low COL. Just because property is relatively cheap does not mean that other commodities are likewise depressed. Somewhat so, probably, but not enough to make someone from another state go through the hardship of a relocation.
Quote:
Originally Posted by tijlover
And I'm sure you'll find idiots that will move to high-rent San Francisco or Los Angeles, not realizing that even at $15 an hour, they'll find themselves lucky to find a one bedroom apartment to rent, which they'll need to share with a roommate or 2. In San Francisco, make that 3 or 4 roommates.
People do not just up and move because the Federal Minimum wage goes to $15/hr. All this hand wringing about something that should have been done years ago. It isn't the minimum wage that has you worked up. Its the wages that are $15/hr now that should be $30/hr, but no one has the balls to demand it!! That's really whats it's all about. The people making $7.25/hr. are fighting for their lives. The people making $15/hr not so much.
My neighbor insists that every time they raise the minimum wage here in the US the cost of living goes up too so that nothing ever improves financially for anyone and often they are worse off then before . He said he has seen it happen over and over again in his life and if they raise the minimum wage again to $15 dollars and hour all over the US the same thing will happen again things will become more expensive.
Is that true ? Does the cost of living always go up when the minimum wage increases?
The increased labor cost must be offset. This can be done by raising prices (if the market will bear the increase), reducing the cost of labor by automating or by simply cutting staffing levels (and having the same amount of work done by fewer employees), cutting the amount spent on benefits, or other such measures.
But most people are making more than MW, so this is really a non-issue.
There is no definitive answer to the OP's question. The economics studies of minimum wage effects are ambiguous. A bunch of economists say yes and other sizeable groups of economists say no.
The "moderate" view is that yes, some jobs are lost, but more money in people's pockets stimulates demand for goods and services that cause a longer term increase of job availability. What's relatively clear is that minimum wage increases do not result in immediate hiring bonanzas at the low end. It can result in short term reductions of hours or a suppression of hiring activity that might have taken place otherwise. Long term, the answer is not clear.
Law of Demand says that if the price of something goes up, demand decreases. Common sense, right?
Well, most economic "basic rules" operate on an "all things being equal" premise. In the real world, all things are never equal.
Law of Demand says that if the price of something goes up, demand decreases. Common sense, right?
You completely forgot the other side of the equation.
Demand doesn't go down because consumer buying power didn't change. It will actually rise a little because MW earners spend more than people who make higher wages.
There will be an added incentive for employers to automate, but this is a good thing. Automation drives higher productivity which is real wealth.
Who's going to staff the grocery stores, gas stations, restaurants, landscaping companies, etc if all the people who work those jobs have to move to a different area? And how are they going to survive in said low COL area where there are very few jobs?
Commute a couple hours each way, thus erasing everything they saved by moving to a cheaper town?
How are they supposed to get a second job when then first job has wildly unpredictable hours? And how long do you expect people to work 80 hours/week just to put a roof over their head and food on the table?
Arguing that we shouldn't pay people enough to survive is incredibly shortsighted. Sure, it helps you be greedy and smug today and keep a little more in your pocket, but long term it's an absolute disaster for everyone who actually has to work for living. People who have zero disposable income can't participate in the consumer economy, and that eventually trickles up and starts taking out jobs and diminishing wages for working professionals who depend on people buying stuff.
There is the long term effect of this which is often not factored -'HEALTH", the body can only take so much abuse and poor nutritional intake. When many who are trapped in these cycles get in their 40's they start to have health problems, even earlier we've seen a dramatic rise in Obesity, not because the people are not working and or having their time occupied, but because the quality of food and the depressive nature of deprivation, is a metabolic disaster as well.
It's a big struggle for people in these situations as well, to try and present their best image, (that becomes a cost factor), over time it takes more make up, it takes more things to keep up their esteem, and we often find "gaudy" has set in, and that carries its own penalty.
People seem to then get caught in the drinking loop as a pressure relief, and that habit takes on its own cycle.
America should know deeply the ravages of poverty, all it has to do is look at the history of former slaves and segregated people, as well as look at back woods, or inner city, poor whites and rural living minorities and whites in run down community areas.
This nation has the power to change these things, but it takes a cultural mentality change both among the wealthy and the poor, but to get and make that change function, people must be paid a wage suitable to develop and have a sustainable living environment and the ability to engage the social, civic and economic functions within the communities expanse.
The concept of "Middle Class" is what makes the economy work, makes for workers who are not despaired. there was a time when people "identified with their work and job community, they had a vested esteemed value about the company they worked for. The "Union Jobs" holders had bonds in both work, community and company. But when the Unions were busted, and people had no voice, no protections and eventually their benefits were diminished or stripped away, or in some cases the co-pays consumed a % far beyond their ability to maintain and still have functional allowance to expend in the community. If anyone has noticed, people no longer have the money they once had to give to organizations such as when the Church community center actually had services and amenities for young and old, culture clubs functions such as YMCA, YWCA and such things. Now there are massive churches, with community centers that are "closed" , or in some cases now leased out to organizations that help people get public service assistance of some sort. These are community and life change events in our society.
Even our schools have found suffrage, the "band" is almost non existent, culture clubs no longer are part of the cultural offerings, some have no science fairs or anything of such for the young people. Even the sports programs at many are gone, and sadly some schools have become so regimented toward state required scores under the budget squeeze games, they have taken away the recreation, and gym class is now far less than what it use to be. Often its cited that 'financial challenge" is tied as the root of loss of these attributes.
There are/is many positive collateral benefits to society when people are paid a decent living wage !!!! people use those resources, and that money circulates in the community multiple times, rather than the bulk of company and corporate money going to the headquarters and the executives overpay themselves to push the company into every phase of default, and blame it on employees wage and benefit. The systemic madness reverberates across the system. the unwise fix in the goon trained minds of the executives is to "seek slaves on foreign soil" and then pawn off cheap, low quality goods on the american low wage earners, and the big result is turning america people into generalized mass of store clerks at low minimum wage pay.
Then people wonder why communities fall, people no longer paint their homes, they don't trim their shrubbery and the streets in the community become potholed to the point that navigation is a nightmare to travel 10 blocks. Yes, there is a major ripple effect brought on by "low wages", "outsourcing jobs", and bleeding the people to repeat buying low quality goods because they can't afford to buy durable goods.
We can thank the Educational system and their Globalist mentality, who have forgot the premise that it takes a nation to be strong within itself, to be an effective and progressive stable entity in the globalist system.
China demonstrated that, when it used its money to uplift more than 300 million people, and invested in its infrastructure and put work into building its social safety nets, (they are far short but at least they are trying).
Here, we have people trained to think of how to bleed the public so the wealthy an buy homes on each Coast that sit empty most of the year, and they play "Jet Setters" trying to emulate the entertainers and titans of the 1960's as the imagery promoted in the movies and other media depictions.
Our salvation has to come through the young people; it has to be changed by the young who reject the "greed teaching" in the University programming of the elite schools, they have to reject the status games of degree titles being the new form of social segregation and they have to understand the re-investment in American is what produces stability of person and nation.
The corporate leaders of tomorrow have to become people who understand community, city, person and system, and what it takes to head a business which respects its responsibility unto these things, and not be driven by personal greed and vain status objectives.
Last edited by Chance and Change; 04-13-2016 at 06:02 AM..
To get back to 1960s minimum wage, we'd need to raise it to about $20/hr to keep it the same buying power. If we did it back then and the economy didn't fall apart as a result, you'd think it could be done today, somehow.
You completely forgot the other side of the equation.
Demand doesn't go down because consumer buying power didn't change. It will actually rise a little because MW earners spend more than people who make higher wages.
There will be an added incentive for employers to automate, but this is a good thing. Automation drives higher productivity which is real wealth.
There will be an added incentive for employers to automate, but this is a good thing. Automation drives higher productivity which is real wealth
What type of automation must be considered?
I'd say Managed "automation" is progressive, but full automation is not functional unto or for a society who needs to work. Full automation only benefits the Executive Industrialist!!!!!! If anything, it makes the middle class shrink more and devastates the working poor to levels of destitution beyond comprehension. We have to understand what is our reality among our masses and where we are as a society in how our economy functions and how necessary it is for people to have work to do, we have to understand how work supports a positive mentality and systems within our society, then we'd know how invaluable "full automation is to our society".
We have to understand limits within a social society dependent on the ability of its society to work. The worst thing is to create an "idled society", the premise of the old saying "An Idle Mind is the Devils Workshop"; is a reality we should not want to expand!! Currently we see and know the vile of such idleness which is demonstrated in the drug spread epidemics, the alcoholism and the many other vices as well as mental deterioration which comes to the unfocused mind and the idled hands of mankind.
We need to understand that; and not allow the pursuit of greed and the driving force of avarice blind us to the human factors as it relates to what makes a society and what invigorates a society to be functional for many. As well as, have and maintain a viable economic structure that is sustainable in economic rationale.
Last edited by Chance and Change; 04-13-2016 at 08:33 AM..
The increased labor cost must be offset. This can be done by raising prices (if the market will bear the increase), reducing the cost of labor by automating or by simply cutting staffing levels (and having the same amount of work done by fewer employees), cutting the amount spent on benefits, or other such measures.
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That pretty well cover it. I suspect that for many jobs, the increased labor costs will be passed on by higher prices. A lot of the low wage jobs are in agriculture where automated equipment has not been able to replace manual labor. So food costs will go up for all of us. Fast food and restaurant workers will earn more and the cost of fast food and restaurant eating will go up.
I am retired so a lot of my income is fixed. I will need to cut back on expenses. It is sad because as a retiree my income is low and I cannot easily pay for items and services. Millions of us are in the same position.
I am sure there will be a big push for automation. Another side effect may be more products coming from overseas. That could easily be true of agriculture. For labor intensive crops, we will need to import our food.
Sadly there seems to be some notion that every job needs to pay a "living" wage. A lot of low level jobs have been traditionally filled by high school kids looking for experience and spare cash. Many of those jobs are likely to vanish and we will have more kids who become educated but have no work experience. That is a combination that often does not turn out well. We had both of our kids work if nothing else to gain work experience. Just learning what is expected in the workplace can save lots of pain later in life.
I'm guessing that the fact of rising prices when the min wage, and most other compensation levels was static means little to those bent on living well at someone else's impoverished condition. Couple this reality with another view of jobs as a kind of "training ground" for those about to enter adulthood, as though a company was actually structured for this training purpose, and presto----it isn't really a job....But moreover, an "entry level" job. Yes, entry level jobs are kind of "special", why, well the employees are "in training", and therefore, not needing a real compensation for their effort.
People who think along these lines are simply ignoring the facts of price determination, in their belief there seems to be a basic misunderstanding of how wages impact prices as opposed to other factors weighing on price determination. Wages just happen to be one of those facets of business that allow for some adjustment, the business owners aren't getting any consideration from their municipal utility cost, nor are they getting any say in their supply chain cost, or the cost of much of their operation overhead, so--the worker is the one thing that IS open to a competitive situation in which the cost of an individuals labor can be acquired for less than the individuals "cost" of operation, better known as "the cost of living".
I can't find one high school kid here in my area to do a darn thing, even when the compensation offered is quite above that of min wage, they just don't want to work. And, why would they when they'e getting most of what they desire without working? We live in a far different world than the one I grew up in, that fact also doesn't automatically compute with all those of my age (70) and that causes the entire viewpoint of wages and living standards to be skewered with regard to many of the changing realities in our collective dilemma of what comprises a fair labor compensation minimum.
Many of these low wage jobs are being taken by older people who, for whatever reason are needing to work, and they will take what is offered, the youth working low wage jobs are not primarily teenagers but mostly folks in their twenties looking for money to carry them through their education years or simply needing the job as a stopgap measure of survival while looking to improve their lot in life. I'm retired and on a fixed income, I don't have a ton of money, I don't want to see any workers struggling financially in order that I may live a better life. I've already been paying higher prices for years, now it's time for wages to follow.
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