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In today's economy he simply does not have any other options... he takes a modest salary, has commitments to pay start-up loans, and what little profit there is retained for emergency/growth. He told me that he regrets starting the business now that regulations over the past few years have reduced his chance for a real payout to compensate for the risk, work, and time he has dedicated.
Luckily for him, the 15 dollar minimum wage isn't an instant thing. Depending on the type of business, he has until 2017 or 2018 if he has more than 500 employees. If he has under this, he has 5-7 years to phase this in.
The $15 min wage would actually benefit college grads more than anyone. Why would McDonald's hire a person who is uneducated, and skill-less for $15 when they could get competitive college grads?
That hasn't happened one time since 1938 when the minimum wage was enacted. I'm not one who believes that raising the minimum wage will have dire consequences, but I do realize that historically it has had zero long term benefit. Minimum wage earners will still be making minimum wage, and that "living wage" that you're espousing is nothing but a pipe dream. Once the market corrects for governmental interference, minimum wage will still not enable people to afford the same things that they can't afford now.
Please explain your math. Do you think everything poor people buy will increase in price by the same percentage as the minimum wage increase?
Please explain your math. Do you think everything poor people buy will increase in price by the same percentage as the minimum wage increase?
This doesn't even take math in order to understand. All it takes is an understanding of business and the market - and a bit of history. Here's what has happened every single time the minimum wage has gone up, without fail.
There will be a brief period where minimum wage earners are a little better off than they are now. Not much, because the wages are going up incrementally, but a little. Then the labor market will adjust to the new minimum wage, meaning that those making (minimum wage)+xx% will once again be making (minimum wage)+xx%. This means that the median wage will go up proportionately (roughly) to the rise in the minimum wage. Some people won't actually get a matching increase, but overall it will average out.
Once the labor market gets itself sorted from the governmental interference, the market for goods and services will sort itself out. Businesses don't price point luxury items - or many basic items - for the lowest common denominator. These items are price pointed for the median wage, not the minimum wage. Therefore, those making minimum wage are going to be unable to afford those products.
Again, this scenario has happened every single time that the minimum wage has gone up. The only difference with large increases vs. small increases is that it takes the markets just a little bit longer to adjust to the large ones, such as what happened in 1968. That one actually resulted in a few years where minimum wage earners had some buying power, but it eventually corrected itself.
There is exactly one way to ensure that minimum wage earners are well off in the long term, and that is for them to move on to higher paying jobs. Trying to live a middle class lifestyle on a minimum wage income is not only mathematically impossible, it's downright stupid.
Now that we've covered that, let's take a look at the new player in the labor market which we didn't have to contend with the last time that the minimum wage went up. Thanks to regulations included in Obamacare, service industry businesses - which are the main employers of minimum wage earners - aren't hiring part time employees to work 35-39 hours anymore. The new norm for these businesses is 28 hours max, because if the employee goes over 28 hours they are forced to provide benefits. So now, instead of looking at wages of $15 per hour x 35 hours = $525 per week, what we're really looking at is $15 per hour x 28 hours = $420 per week. Before taxes, needless to say. Of course, that's not for 7 years or so. In the meantime, minimum wage earners - i.e. the working poor - have gone from +/- $255 a week to +/- $200 per week due to governmental interference in the labor market. Bear in mind, the same people in Washington D.C. who are pushing to raise the federal minimum wage are the very people who brought you Obamacare, which has quite possibly harmed more minimum wage workers than any other law ever written.
Less than %5, IIRC. Seems a bit silly to disrupt an entire economy over such a small portion of the population, but I guess Washington needs something to do.
This doesn't even take math in order to understand. All it takes is an understanding of business and the market - and a bit of history. Here's what has happened every single time the minimum wage has gone up, without fail.
There will be a brief period where minimum wage earners are a little better off than they are now. Not much, because the wages are going up incrementally, but a little. Then the labor market will adjust to the new minimum wage, meaning that those making (minimum wage)+xx% will once again be making (minimum wage)+xx%. This means that the median wage will go up proportionately (roughly) to the rise in the minimum wage. Some people won't actually get a matching increase, but overall it will average out.
You already lost me. If minimum wage goes up 40%, everybody's salaries will go up 40% on average? Is that what you're saying? Because that seems like the sort of supposition that I find pretty hard to believe. You think that folks making $50k per year now are going to be making $70k in a few years because of minimum wage going up? Where is the supporting data for that conclusion?
Less than %5, IIRC. Seems a bit silly to disrupt an entire economy over such a small portion of the population, but I guess Washington needs something to do.
Its a lot less disruptive than you are attempting to make it out to be. 5% of the workforce gets a bump in pay(in part of the country mind you not all) it doesn't equate a rise in pay across the board
You already lost me. If minimum wage goes up 40%, everybody's salaries will go up 40% on average? Is that what you're saying? Because that seems like the sort of supposition that I find pretty hard to believe. You think that folks making $50k per year now are going to be making $70k in a few years because of minimum wage going up? Where is the supporting data for that conclusion?
It's called history. It has happened over and over again, every time the minimum wage has gone up. Will the raises be an exact match? No, but they will be pretty close. Close enough, in fact, that the buying power of minimum wage earners will remain essentially the same as it is now.
Answer this question: When is the last time that raising the minimum wage had the long term effect of lifting minimum wage earners out of poverty? All the way back to 1938, when has it happened?
Its a lot less disruptive than you are attempting to make it out to be. 5% of the workforce gets a bump in pay(in part of the country mind you not all) it doesn't equate a rise in pay across the board
To clarify, I was talking about Washington D.C.'s attempts to raise the minimum wage. Seattle, quite frankly, can go pound sand. I've been there numerous times, and I still don't understand why people voluntarily move there. However, the same thing is going to happen in Seattle - on a smaller scale - as what has happened on a national level every time the minimum wage has been raised. They are devaluing the dollar on a local level, rather than a national level, but they are still effectively devaluing it.
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