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That is a very simplistic explanation that depends on assumptions. Raising the MW 25% means the jobs above MV also need to be raised. That can have a snowball effect in raising all salaries. By my simplistic explanation we just end up with inflated costs and no one wins. But there will be losers...those on fixed incomes.
I assumed that the effected zone would extend beyond the MW level. If you raised the MW 25% there would be very few people getting a full 25% increase (way less than 20% of the population). For instance raising it from $7.25 to $9, someone initially making 10 might be raised to $11 or $11.50, and the effect will further dissipate above that.
Actually, they're not. Agriculture and food production in the United States is highly automated. The unit labor cost of food in the US has been dropping for decades. The same is true for our transportation infrastructure.
That is true for grains but not for many products. The overall variable labor costs in agriculture average 15-20% with double those costs for many fruits and vegetables. Those labor costs do no include such costs as milling, slaughter houses, packing, storing, and distribution. Many of those jobs are low skilled, low paid and are currently paid under $15/hr.
I assumed that the effected zone would extend beyond the MW level. If you raised the MW 25% there would be very few people getting a full 25% increase (way less than 20% of the population). For instance raising it from $7.25 to $9, someone initially making 10 might be raised to $11 or $11.50, and the effect will further dissipate above that.
People getting SS get COL adjustments anyway.
Most of the MW discussion has been pointing toward phasing in a level of $15/hr. A great many jobs will be affected. Those at the current MW level and another very large portion of jobs under $15/hr. Then there are lots and lots of jobs in the $15-20 range. When everyone lower gets raises, employers are going to need to pay more for those midlevel employees.
People on SS get COL adjustments. Well sort of. First you have to accept that the COL adjustments actually reflect an individual's costs. Costs such as healthcare are increasing at rates way beyond average. Then the increased SS COL needs to translate to real spending money. That doesn't happen because of increased taxes. In addition many retirees have incomes beyond just basic SS. I still have a couple of small pensions. Both will pay fixed amounts for the rest of my life. Then I have some investment income. If I am lucky and my investment income increases, I will again pay more taxes.
You need to be retired to see what actually happens, but I can tell you inflation is not a good thing once you are retired.
The costs are already too high to afford for a great many. If the increased MW costs force many mid level wage earners to quit working, the impact on the economy could be huge.
You just won't quit, eh? Endless hand waving doom and gloom.
The only place I'm aware of anywhere near me that has a high MW is Santa Fe. They pay $10.91/hr when all the rest of the state is $7.25. They've done this since 2004. Frankly I'd be worried about the effects of a town raising the MW that much higher than surrounding areas, but there are many examples proving that it isn't a problem: http://cepr.net/documents/publicatio...ge-2011-03.pdf Santa Fe is a particularly interesting case because unlike San Francisco and DC, it isn't that wealthy and it's located in one of the poorest states in the country.
There is zero reason to worry about reasonable increases on a state and national level.
McDonald's makes uncountable billions of dollars a year. Do they HAVE to pass on all the costs of paying their workers a living wage? Really. Do they? I hear you, they probably will. But that's on them and also on people like you because it has not occurred to any of you that it is WRONG to do so. A rising tide lifts all boats. Absolutely there will be pressure on all sectors of employment to increase wages if the floor is raised to $15/hr. And? You think there isn't enough float (bloat) in the cream at the top to allow for it? I need a toke off what you are smoking if you don't think that the entire U.S. workforce of $150 odd million couldn't be given significant wage hikes without bankrupting the 1%. They have trillions. Tens of trillions. Has the Panama Papers informed no one? They sock it away in the Caymans and workers starve to death and they don't care because they can get another to replace the one that died before the day is out.
Totally agree. When upper level company employees get million dollar bonuses while the actual workers can barely affordbasic living expenses, things have to change. And the idea that pay should be based on job title is outdated. If a job is necessary, the compensation for it should be a living wage, regardless if it's flipping burgers, scrubbing toilets, or crunching numbers in some white collar bastion.
i dont get this country, people want a higher wage, but companies will use that to raise prices of their items. say if it gets raised to 12-15 an hour, then burgers will soon cost 8-9 $ just for a burger. its not like if the wage gets raised their not going to raise their items high, so why raise the wage so high ?
upping wages and prices makes bad loans good and makes the banks profitable, it also gets them to loan on productive enterprises instead of speculation.
i dont get this country, people want a higher wage, but companies will use that to raise prices of their items. say if it gets raised to 12-15 an hour, then burgers will soon cost 8-9 $ just for a burger. its not like if the wage gets raised their not going to raise their items high, so why raise the wage so high ?
Funny how that didn't happen when the price of beef doubled in 5 years, huh? Not to mention that nothing big happened when Truman raised the minimum wage 87% overnight...
You just won't quit, eh? Endless hand waving doom and gloom.
....
I do not know about doom and gloom, but someone needs to pay for the increased MW. The payment will come from increased costs for everything that depends on MW labor. And an inflationary snowball is likely because the MW being discussed by unions, Sanders and a great many others is $15/hr. At a minimum that affects a lot of workers who are currently making MW, or less than $15/hr. I also think it is likely that those making a bit above $15/hr will also be affected. Now we are talking about a great many millions more workers.
The costs do not come out of the pockets of the wealthy. They hit everyone. Day care is a prime example. Day care costs are already having a huge impact on the middle class workers. The wealthy are not affected. They will continue to pay for exclusive day care and later private prep schools.
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