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Or they will cut salary of executives and those living high off the hog.
Yea, that'll fix things!!!
The suffering starts at the bottom, PERIOD!
This view that if executives make less will fix anything is ABSURD. It's nothing more than a display of envy, which happens to be a deadly sin for a reason.
Look at the trouble Gravity Payments is in. The owner tried to do "the right thing" ideologically, and within just a few months a vibrant company, a darling of the left, is in real trouble. http://www.nytimes.com/2015/08/02/bu...at-roared.html CEO Who Raised Minimum Salary To $70k Falls On Hard Times | The Daily Caller
No matter what the "raise the minimum wage and all will be great" crowd claims, the entire chain above will expect a raise. When everyone earns more, the cost of living will rise, the cost of goods will skyrocket, and the value of money will drop.It's simple economics being completely ignored.
I've posted two studies that argue against your "simple economics" claim. How can your example of a firm which (over time) promised to raise employee's salaries to 70k a year prove anything about raising the minimum wage? And by the way, unless you solely rely upon the daily caller article you will find that while the company is facing challenges, they don't have much to do with the salary increases.
I've posted two studies that argue against your "simple economics" claim. How can your example of a firm which (over time) promised to raise employee's salaries to 70k a year prove anything about raising the minimum wage? And by the way, unless you solely rely upon the daily caller article you will find that while the company is facing challenges, they don't have much to do with the salary increases.
By raising the minimum wage, the government doesn’t guarantee jobs. It guarantees only that those who get jobs will be paid at least that minimum. But precisely by requiring this, the government destroys jobs. Someone whom an employer was willing to pay only the oldt minimum wage of $5.15 might not produce enough to be worth paying, say, $7.25.
It’s not all or nothing. Some of the workers currently earning $5.15 would find their wages rising to $7.25. But the marginal tasks, the least important tasks in the workplace, would not be worth $7.25, thus costing jobs. In the long run, employers will find more capital-intensive ways of having those tasks accomplished.
Economists’ consensus estimate is that a 10 percent increase in the minimum wage would destroy 1 to 2 percent of youths’ jobs. A federal increase to $7.25 would, therefore, destroy about 800,000 to 1.6 million youths’ jobs. Some older low-skilled workers would also suffer. And the hurt to youths isn’t just short term, according to economists David Neumark of the University of California, Irvine, and Olena Nizalova of Michigan State University. In a 2004 National Bureau of Economic Research study, they found that as people reached their late 20s they worked less and earned less the longer they had been exposed, especially as teenagers, to a high minimum wage.
Those adverse effects, they found, were stronger for black teenagers, recalling the famous line from liberal economist Paul Samuelson’s 1970 textbook, Economics, about a proposal to raise the minimum wage to $2: “What good does it do a black youth to know that an employer must pay him $2.00 an hour if the fact that he must be paid that amount is what keeps him from getting a job?â€
But couldn’t job losses of 1 to 2 percent be worth it, if the remaining 98 to 99 percent get a wage increase? This isn’t the trade-off, for two reasons. First and most important, the majority of youths are already earning more than the higher minimum that is typically proposed. For instance, in a study of a proposed minimum-wage increase in California to $7.75 from $6.75, economist David A. Macpherson of Florida State University and Craig Garthwaite of the employer-funded Employment Policies Institute found that, of 1.48 million California youths with jobs, 79 percent earned a wage higher than $7.75, and there’s no guarantee that these workers would get an increase. Some, but probably not most, would get what are called “spillover benefits†because of the new pressure on the wage structure. That is, they would get higher wages than before due to employers’ desire to maintain a differential between the wages of the lowest-paid and the wages of those further up in the wage structure.
Second, because the minimum wage does not make employees automatically more productive, employers who must pay higher wages will look for other ways to compensate: by cutting nonwage benefits, by working the labor force harder, or by cutting training. Interestingly, the Economic Policy Institute (EPI), a union-funded organization in Washington that pushes for higher minimum wages, implicitly admits the last two. On its website EPI states, “employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.†How would an employer get higher productivity and decreased absenteeism? By working employees harder and firing those who miss work. How would an employer lower training costs? By training less.
Nor is raising the minimum wage a good way to reduce poverty. The usual stereotype is a minimum-wage parent with no other family members working. But that’s a small segment of minimum-wage workers. The EPI website states that 14.9 million workers would benefit from an increase in the minimum wage to $7.25, 6.6 million of whom currently earn less than $7.25—it assumes zero job loss—and 8.3 million of whom earn more but, it claims, get a spillover. Yet EPI admits that only 1.4 million of the 14.9 million, less than 10 percent, are single parents with children.
The economists’ consensus about the job-destroying aspect of the minimum wage is less strong than it used to be. In the late 1970s, 90 percent of economists surveyed agreed or partly agreed with the statement that “a minimum wage increases unemployment among young and unskilled workers.†By 2003, this percentage had fallen to 73 percent, still a strong consensus, but a weaker one than previously. What happened?
The answer is one major study and a book by economists David Card, now at the University of California, Berkeley, and Alan Krueger of Princeton. In a 1994 study of the effect of a minimum-wage increase in New Jersey, they found higher growth of jobs at fast-food restaurants in New Jersey than in Pennsylvania, whose state government had not increased the minimum wage. This study convinced a lot of people, including some economists. It was comical to see Senator Edward Kennedy hype this study when he had never before mentioned any economic studies of the minimum wage.
On the basis of criticism of their data from David Neumark and economist William Wascher of the Federal Reserve Board, Card and Krueger moderated their findings, later concluding that fast-food jobs grew no more slowly, rather than more quickly, in New Jersey than in Pennsylvania. But they never answered a more fundamental criticism, namely, that the standard economists’ minimum-wage analysis makes no predictions about narrowly defined industries. As Donald Deere and Finis Welch of Texas A&M University and Kevin M. Murphy of the University of Chicago pointed out, an increased minimum wage could help expand jobs at franchised fast-food outlets by hobbling competition from local pizza places and sandwich shops. This could explain, in fact, why Card and Krueger found fast-food prices rising more quickly in New Jersey than in Pennsylvania, a fact they were unable to explain.
Even many who favor increasing the minimum wage admit it would destroy jobs. In a recent New York Times op-ed favoring a minimum-wage increase, Michael Dukakis, the 1988 Democratic candidate for president, and Daniel Mitchell of UCLA’s Graduate School of Management write, “it’s possible some low-end jobs may be lost.†They claim that, somehow, those who lose jobs will disproportionately be illegal immigrants.
The focused support for the minimum wage comes mainly from labor unions, all of whose members earn more than the minimum. This isn’t benevolence at work but greed. Union leaders understand that the minimum wage prices out their low-wage competition: It acts like an internal tariff. If only most Americans understood.
reprinted with permission from
David R. Henderson
there are six studies showing raising the min wage will cost jobs, especially in the black community
For example burger joint manager is at $15 or $17 per hour, now a new hired burger flipper will make the same?
It's probably already been said a million times but the practical effect is obvious... prices for things will go up.
I remember how shocked I was to find out how cheap it was to live in Bolivia when I moved there in the late '90's. I realized pretty quick that things were so cheap because nobody had any money... if people charged more money for stuff they'd go out of business because nobody could afford to buy it. Only things NOT necessary for living were the same price as the USA such as automobiles, and only the very wealthy (and VERY tiny minority of) Bolivians had an auto... stuff like that was an unobtainable luxury for the majority.
The same sort of thing happens here in the USA; the main reason why housing is so overpriced in America is because dual income families became the norm over the last few decades. Too many families competing over a finite resource (single family homes) who were willing and able to pay higher prices naturally served to drive up prices across the board over the long haul.
These days you have very little hope of getting a decent house on a single average income and all the formerly extra money made by mom is vacuumed up by mortgage lenders (and taxes, and child care), completely negating the former benefit of sending both mom and dad out to work AND making the dual income strategy an unfortunate requirement for a comfortable middle class life.
15.00 an hour minimum wage laws are yet another example of good intentions leading to unintended bad consequences. If it becomes the norm across the country, we're ALL gonna get poorer in the end... wages won't go up across the board so we'll just end up with more competitors for the same finite resources and prices will rise to equal what most people are willing and able to pay for them.
and your sources...Opinions from Cato, EPI, Tim Worstall, vague references to a CBO study with 'mixed results' by a USA Today reporter. And one study from UC Irvine that demonstrates that there would be a net job loss particularly among teenagers but I can't find anything referencing the extent of that job loss. I'm going to leave it up to other readers of this thread to decide which sources they trust.
15.00 an hour minimum wage laws are yet another example of good intentions leading to unintended bad consequences. If it becomes the norm across the country, we're ALL gonna get poorer in the end... wages won't go up across the board so we'll just end up with more competitors for the same finite resources and prices will rise to equal what most people are willing and able to pay for them.
Very true. At $15/hr., people who were in the lower middle class are going to get pulled closer to poverty, as their wages will not increase to offset the shift in minimum wages.
Minimum wage earners would see their incomes increase by 50%-100%. People currently earning $15/hr might be lucky to see their wages increase at all, so those people all just got hosed. They're now no better off than new hires and the most unskilled class of workers.
This greatly reduces the incentive to work in currently low-paying fields that require skills or education. Why bother going through job training or college and racking up debt, to come out earning $2/hr. more than a burger flipper?
Right now, the minimum salary to be salaried exempt is $455 per week. That is roughly equivalent to $8.27/hr assuming a 50-hour work week and overtime.
That is why you do not see employers paying people subpar salaries in place of low hourly wages.
But if you bring the minimum wage up to $15/hr, that is $750 per week on a 50-hour work week. That is above the currently threshold for salaried exempt and you will definitely see more businesses switch eligible employees to that.
(The other factor is the work must be exempt work, which fast food work is not. But... being a fast food manager could be exempt work and you will see the proportion of managers to line workers change dramatically to switch more workers to salaried exempt.)
I would say it is a safe bet that this would be raised along with the minimum wage just like it has been raised in the past.
Look at the trouble Gravity Payments is in. The owner tried to do "the right thing" ideologically, and within just a few months a vibrant company, a darling of the left, is in real trouble.
No matter what the "raise the minimum wage and all will be great" crowd claims, the entire chain above will expect a raise. When everyone earns more, the cost of living will rise, the cost of goods will skyrocket, and the value of money will drop.
It's simple economics being completely ignored.
That is between them and their employers, maybe their employers will decide their jobs aren't worth more than minimum wage.
This view that if executives make less will fix anything is ABSURD. It's nothing more than a display of envy, which happens to be a deadly sin for a reason.
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