Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I tend to find those with higher earnings spend accordingly...
Of course their are outliers... like a school custodian that lived 35 years in a SF Studio Apartment and left the city a 2 million bequest for parks...
One of my friends banked every promotion or raise he earned from age 22 to 34 when he got married.
He was socking away a lot... it didn't take long before he was maxing the 401k and investing in a Schwab...
Many are looking forward to the increased minimum... it should be really good for those with in demand rental property who were farsighted enough to lock in good fix rate loans... all this extra money floating around is bound to be spent which is great for those with something to sell...
Of course it will be spent!
People at or near the minimum wage spend almost 100% of their earnings. Until a few years ago, they often spent well more than 100%, but since the recession credit card debt has gotten under control somewhat.
People that save make considerably more than minimum. Usually savers make considerably more than median.
My lawyer friend's practice of BK is almost all people with incomes above median... don't think he has ever represented anyone making minimum wage or close to it.
For some reason the largest pool of clients are Doctors and Small Business Owners like Contractors.
My first job paid $50 a week when I was in High School... of that $50 I paid my folks $20, another $20 went into the bank, around $4 and change was with holding and $5 and change was all mine and enough to buy a burger everyday for lunch.
I have been paying into Social Security since age 12 and had to get a School District Work Permit.
Face it... some people are savers no mater what and others are not.
Mom lives from Social Security and still manages to save half of it every year... she has her own home and a car...
People at or near the minimum wage spend almost 100% of their earnings. Until a few years ago, they often spent well more than 100%, but since the recession credit card debt has gotten under control somewhat.
People that save make considerably more than minimum. Usually savers make considerably more than median.
Based on my own experience, I'm not convinced that give an increase in the minimum wage will "spur" the economy with a high demand for products. Having had a few minimum wage jobs in the distant past, I can tell you that when I got an increase of around 25% I spent every bit of it and it still wasn't enough. However, keep in mind, I didn't spend it on a new car or going out to eat or anything that would spur the economy---I was still poor. Those on the lower end of the economic scale will spend any increase, that is not arguable, however, that doesn't necessarily mean they will spend it in ways that will have a positive impact on the economy. Instead they may actually pay the rent, phone and utilitiy bills on time!
Now that I'm on the opposite end of the economic spectrum I can tell you that I spend a lot of money. I purchase cars (often-just not GM since they screwed me on the stock deal), and numerous other items/toys, I go out to eat often, give money to charities. Much of what I spend now would have a direct economic impact on the lives of others unlike what I spent my money on when I was poor.
For the record, "basically" stealing is hardly "legally" stealing. Just because you disagree with the methods doesn't make it illegal, and any less their property that is being taken from them. And there are plenty of MW workers that game the system. You just refuse to acknowledge that fact.
Just curious - what people with large incomes basically steal that income? I truly want to know what you consider stealing.
I didn't say it was illegal. But it should be.
To maximize our economic performance and living standards, we'd want to reward people who take risks on new and higher productivity technology. When it comes to societal wealth, productivity is about all that matters. Reward them just enough so that they will pursue it. Other than that a reasonably egalitarian income and wealth distribution will maximize aggregate wealth and living standards. A truly competitive market with low barriers to entry is usually quite good at providing this. For salaries though, it is necessary to have a MW to keep the floor above subsistence.
Who are the thieves? Think about it for a moment. Who is getting rich while doing no good to society (or obvious harm)? Or extracting way more $$$ than their beneficial function would warrant? Leaches. First thing than comes to mind are the "too big to fail" finance A-holes who got rich bringing the global economy to its knees, and they are still at it! Crony capitalists who leverage market dominance and lobby the government for special laws to limit competition. Lawyers (most of them). Stock and market manipulators. Professional "investors". Many others.
To maximize our economic performance and living standards, we'd want to reward people who take risks on new and higher productivity technology. When it comes to societal wealth, productivity is about all that matters. Reward them just enough so that they will pursue it. Other than that a reasonably egalitarian income and wealth distribution will maximize aggregate wealth and living standards. A truly competitive market with low barriers to entry is usually quite good at providing this. For salaries though, it is necessary to have a MW to keep the floor above subsistence.
Who are the thieves? Think about it for a moment. Who is getting rich while doing no good to society (or obvious harm)? Or extracting way more $$$ than their beneficial function would warrant? Leaches. First thing than comes to mind are the "too big to fail" finance A-holes who got rich bringing the global economy to its knees, and they are still at it! Crony capitalists who leverage market dominance and lobby the government for special laws to limit competition. Lawyers (most of them). Stock and market manipulators. Professional "investors". Many others.
One big problem with this minimum wage hike is that it's going to hurt small business owners especially restaurant owners.
Many of the Pro $15 crowd always talks about McDonald's or Walmart making BILLIONS.
Well the average small business owner in a city like Los Angeles running a pizza shop or burger joint doesn't make much at all. This law hurts them. If they have to close up shop or cut back on labor that also hurts employees too.
As far as the big multinational chains they have the money and resources to implement robotics to bring costs down. Furthermore, even if they didn't have any stores in California or NY or Oregon or whatever else this higher minimum wage law gets passed...they have tons of stores in China, in Europe,etc .
The mom and pop business owner probably just has that one shop which they have operated for many years or decades and which is their livelihood.
In Los Angeles at least I see tons of these businesses , the kabob shop, the pizza place, the sandwich shop. They are in every strip mall, etc.
They will be effected
One big problem with this minimum wage hike is that it's going to hurt small business owners especially restaurant owners.
We've already addressed this. Most restaurants have <15% of their sales in low wage worker pay. Even if you doubled the MW, a 15% price increase would cover it.
The other thing you need to remember is that a bunch of low income workers will now have a lot more money to spend. If your business caters to high income people then you won't see any benefit, but businesses that cater to the lower income demographic will experience a big increase in sales.
And... no way in hell is a the federal MW going to $15 in today's money. It's ridiculous to consider it. Maybe $10, but even that is unlikely.
Let's say, for the sake of argument, that a 15% increase in prices covers the cost to a restaurant for increasing the minimum wage. Could this have a negative the business? Seeing how the demand for their product is elastic, would you expect the amount of business to increase or deccrease? Afterall, people don't have to go there and won't, if they perceive prices to be higher than value received. Let me give you a specific example: Currently I pay $6.45 for a quarter pounder value meal. Last year the same meal was around $5.50. Most of the McDonalds here pay above minimum wage (8.50-9.50) because of competition for the workers in our job market. That being said, I can tell you if it goes up much more, there is a point at which I and others will no longer consume.
While it is true that "some" low income workers will have more money to spend, I believe there will be more of them out of work (and thus have less to spend)! There will also be pressure to automate. When you think about it, what do low income workers actually spend their money on? When I was on of the working poor and got an increase, the only thing it did was help me pay the rent, phone, etc. I didn't go out and purchase a new car and I didn't go out to eat.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
