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Old 01-13-2018, 05:47 PM
 
33,046 posts, read 20,714,185 times
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Quote:
Originally Posted by Elliott_CA View Post
Until the excess labor pool is exhausted, higher wages will make the economy grow and businesses will have more revenue and profit.

In California the minimum wage was sharply raised from $8 to $11 in just a few years. The pay hikes resulted in the unemployment rate dropping from 8% to just under 5%, despite the many armchair economists on here saying that raising the minimum wage always results in job losses.

Here's why unemployment fell while wages went up: Our economy is constrained by a shortage of money at the bottom and an excess of money at the top. Raising wages at the bottom gives the working poor more money to spend. They spend it at local businesses, who see rising demand and sales, and who then hire up to meet that rising demand.

Which causes rents to necessarily skyrocket, causing protesters to demand another minimum wage increase.

Because NIMBY-minded anti-development homeowners don't want to resolve the shortage of housing affordable at the bottom.
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Old 01-13-2018, 05:51 PM
 
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Quote:
Originally Posted by C2BP View Post
Sadly higher wages drive the push towards increased efficiency and automation. That drives a decrease in jobs. In economics things have a trade off. Those pushing for higher salaries across the board better be ready for the potential fallout which tends to be job loses and inflation. Growing the real economy is harder than just demanding wage increases. People need to read economics books before proposing overly simplistic solutions. Today we have too many people who think they understand economy, but in reality they don't have a clue .

Homeowners in many states have effectively decided that they're not willing to allow an ample supply of housing affordable to minimum wage earners, and are willing to increase the minimum wage in order to mitigate the inflated cost of housing.
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Old 01-13-2018, 05:52 PM
 
33,046 posts, read 20,714,185 times
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Originally Posted by cedarite View Post
Something not often brought up but that is relevant in business: paying better wages can reduce employee turnover. Turnover is expensive. Retaining employees who know their job rather than perpetually retraining and getting new workers who in turn will jump ship any time they get a better offer up to speed over and over is more expensive than the slightly higher wage. It's not always wise to pay as little as possible. Target could be using this tactic to improve employee retention, loyalty and provide a better experience for customers who benefit from the increased experience of the average employee. This can help with customer loyalty in a crowded retail sector.

The hypothetical college educated person upset that retail workers aren't making less in relation to his or her job is not Target's problem.

Minimum wage employers know that. They have done the math, and have CHOSEN to accept the high turnover associated with low wages.
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Old 01-13-2018, 09:35 PM
 
6,166 posts, read 3,251,225 times
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Quote:
Originally Posted by MillerThyme View Post
Target announced they would raise entry wage to $15 an hour by 2020, and with the advent of the new tax reform Walmart states they too will raise their entry wage to $15 an hour by 2020.

My question is what will happen to other business that are both entry level such as McDonald's and those in a professional sector that requires a degree and is considered high risk?

Lets make a scenario (something I am horrible at).

A student who worked very hard to complete college for a better wage and lifestyle in a professional career is now in debt a good chunk of money to learn a useful trade. The market for an entry level position in the completed degree field starts between $19-29 an hour depending on location, size of business, and severity of potential health risk along with long hours.

Now big corporate retail world decided they want to raise their entry wage which will trickle down to the consumer and even other business over time. What will happen to other business industry like fast food, home delivery, and truck driving (an industry that is hurting already)? Also what would happen with the higher paid individual who has a degree? They now effectively make less due to prices increases.

Will these other industries be forced to increase their wages to keep everything in-line?


PS. Not really sure my concern and curiosity is coming across clearly.

Thanks!
This has been going on in our country for a century. Entire sectors have trouble attracting employees, so they raise wages. Like in tech.

When all those places were paying subpar wages, we still had the Great Recession, and the economy at times was stunted.

I'd say it has the most effect in local communities...some of them.

I'm of the belief that rising wages helps the economy. The reason is that LOW INCOME PEOPLE SPEND THEIR MONEY. Not because they're wasteful, but because they don't have much money. So when they get a few extra dollars, they can get those new shoes or the washing machine repaired. This HELPS the economy.

As for fast food places, the big ones will be transitioning into using more kiosks and robots. This has nothing to do with WalMart's wages, since fast food has been planning this for some time. I began seeing articles about this a while back.

And think of this. With the add'l benefits that WalMart will be giving...maternity leave. adoption assistance, health ins., local communities will be better off because of it. And the govt may be able to save on spending on assistance programs to help them out, which is what WalMart has been relying on since the beginning: They paid that low because they expected the govt to make up the difference, thereby subsidizing their business expenses.
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Old 01-13-2018, 11:14 PM
 
16,326 posts, read 6,088,087 times
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Quote:
Originally Posted by cedarite View Post
Something not often brought up but that is relevant in business: paying better wages can reduce employee turnover. Turnover is expensive. .
Retail training is, most often, less than one day in length.

Turnover in industries requiring skilled labor is expensive.
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Old 01-14-2018, 06:32 AM
 
Location: Cebu, Philippines
2,170 posts, read 797,279 times
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Maybe raising the minimum wage will raise the incomes of some low-wage workers, who then will have more money to spend on goods and services, and create job demand for other workers. Resulting in both higher employment and higher wages.
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Old 01-14-2018, 09:07 AM
 
Location: Bellmawr, New Jersey
271 posts, read 94,638 times
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Some folks could lose more jobs due to higher wages, it happens a lot and it's sadly normal. And would also help push more stores, especially like Kroger and Walmart to speed up the process of having technology overtake some jobs.
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Old 01-14-2018, 09:47 AM
 
Location: Proxima Centauri
3,754 posts, read 1,592,841 times
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There is no question that the trickle down theory must be legislated for it to be more than talk. There was a study done in San Jose that reports that a moderate rise in the minimum wage will only add 1.45% to the cost of doing business.

The San Jose study is documented in the current issue of Foreign Affairs.
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Old 01-14-2018, 09:50 AM
 
16,326 posts, read 6,088,087 times
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Quote:
Originally Posted by Tonyafd View Post
There is no question that the trickle down theory must be legislated for it to be more than talk. There was a study done in San Jose that reports that a moderate rise in the minimum wage will only add 1.45% to the cost of doing business.

The San Jose study is documented in the current issue of Foreign Affairs.
I do think MW should be linked to COL indexes, with 2-3% annual increases being the norm. If that is what you mean by a moderate rise, I agree. That would typically be 25-30 cents per hour increase.
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Old 01-14-2018, 10:13 AM
 
15,385 posts, read 8,682,121 times
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Quote:
Originally Posted by freemkt View Post
Which causes rents to necessarily skyrocket, causing protesters to demand another minimum wage increase.

Because NIMBY-minded anti-development homeowners don't want to resolve the shortage of housing affordable at the bottom.
Funny, lots for time to protest, but not enough time to better their skills or get another job.
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