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Because the kind ofs increases will be unprecedented.
For example, minimum wage in Los Angeles is $10hr now, but it will be $15hr by 2020. 50% increase!
It's a huge gamble, especially considering many businesses are already leaving California.
It is only unprecedented because min wage has not kept up with cost of living and inflation. Raising it $5 in 4 years is what barely over a dollar a year I think businesses can handle that.
It is only unprecedented because min wage has not kept up with cost of living and inflation. Raising it $5 in 4 years is what barely over a dollar a year I think businesses can handle that.
I know it doesn't sound like much..but a lot of these businesses with minimum wage workers have very very small profit margins. It's not that they aren't good business people, it's just that's the nature of the business.
Do you know what the profit margin is for fast food places?
These businesses aren't really raking in that much and at $15 an hour they will be paying full time employees
$31,200 a year.
Lot's of small business owners of these little burger, pizza places, might be lucky to make much more than that themselves at the end of the year...and that's being the owner and have all the responsibility,etc.
Also as far as cost of living..In Los Angeles ,SF,or NYC even at $15 an hour that's not enough for someone to really live well.
So should the minimum wage be $30 instead or maybe $40?
??? ??? Portland has a number of college grads earning minimum wage; I've worked with some of them.
That was part of a discussion that I was having with jm, he had claimed that many college grads are currently making $15 an hour, his premise was that if the minimum wage was increased to $15 then those college grads would still be paid $15 an hour. We went back and forth a bit and I tried to explain the ripple effect of a minimum wage increase. In retrospect I was imprecise in the comment you quoted and I can understand why you read it the way you did.
These businesses aren't really raking in that much and at $15 an hour they will be paying full time employees $31,200 a year.
Lot's of small business owners of these little burger, pizza places, might be lucky to make much more than that themselves at the end of the year...and that's being the owner and have all the responsibility,etc.
You have to wonder why there is any incentive to have such a business if there is so little money in it? Answer: there is more money than that in it. Not that it matters how much a business makes.
Fast food typically pays <20% of sales in labor costs. Let's say inflation stays low, and so the MW increase amounts to a 40% real pay raise. At 20% that means the business would need to raise prices 8% and have the same sales to experience the same profit level. Since real aggregate demand went up due to the shift in buying power, they can probably do that and have the same sales. One thing is certain: real aggregate demand won't be hurt at all if businesses simply raise prices to cover their increase in costs. There will be some minor losers and winners however. Anytime you make any change, that is the case.
BTW, I don't advocate the whole state of CA having a $15/hr MW, nor do I believe a $15/hr national MW is reasonable. In some places the median wage is less than that, and I suspect it would be too disruptive. Currently though the MW is less than half that much and we could raise it to $10/hr without ill effects. It's been higher than $10/hr in the past.
That was part of a discussion that I was having with jm, he had claimed that many college grads are currently making $15 an hour, his premise was that if the minimum wage was increased to $15 then those college grads would still be paid $15 an hour. We went back and forth a bit and I tried to explain the ripple effect of a minimum wage increase.
and if their bump is 20% while everything else is also bumped 20% in costs, do they really come out ahead? But that 20% bump also bumps them into the next tax bracket, they go from 15% to 25%. so in addition to the increased COL, they also owe the govt more.
I'm hoping that people that want $15/hr realize that they will lose their subsidies. ACA still requires health insurance, or it comes out of their taxes. But ask if they can afford it without subsidies? Housing/food subsidies, gone too.
Good luck living on $15 when employers just adjust their sale prices and pass labor costs to consumers while the poverty line remains unchanged so they get squeezed at the front while making too much to receive aid.
They will be hoping they get their hours cut so they can make less and remain on the dole/lower tax bracket
I'm okay with increasing minimum wage just because it forces people into higher tax brackets which increases revenue for the govt. But it isn't going to help people who don't help themselves get out of the minimum wage jobs. Increasing it does not magically create more non minimum wage jobs, nor does it mean people will just gain skills for higher paying jobs. All it does is shift the numbers around, but they will stay in the same place on the social/economic ladder, the bottom rung.
Well the thing is after the $15hr hike , then like you said everything will go way up in price , employees will pay more in taxes and probably won't qualify for those same benefits .
Then it will be $15hr is still poverty so a push to change the income limits for welfare .
Meanwhile many businesses will be sacrificed because of these experiments with the economy.
Many Business owners will realize the incentives aren't worth it at $15hr and will just try to find a job or move out of state where they can pay much lower wages.
Then it will be $15hr is still poverty so a push to change the income limits for welfare .
with how much of a hoopla over the fight for $15, they won't push for increased limits for welfare... when have you last seen a push for higher welfare limits? I don't recall protests for more section 8 housing, no marches for food stamps, no sit ins over tax brackets
those things will slowly change over time, but it won't be "pushed" for, people at the low end just don't consider those things. they worry about the money coming in from their paycheck, not what is going out after they get it
An alternate strategy would be to pro-rate minimum wage to what it SHOULD be adjusted for cpi - which is about $10.90 an hour, then tie it to cpi so it goes up and down with the economy and we never have this argument again.
At the same time, we could fight housing costs - that is the main driver behind the "fight for $15." If you could get an apartment reasonably priced, $10 would be fine. But you can't. Oh, you can in rural areas where there are few jobs, but not in major metros with jobs. If we did not have a dysfunctional housing market in about half the country, minimum wage would not be an issue.
My neighbor insists that every time they raise the minimum wage here in the US the cost of living goes up too so that nothing ever improves financially for anyone and often they are worse off then before . He said he has seen it happen over and over again in his life and if they raise the minimum wage again to $15 dollars and hour all over the US the same thing will happen again things will become more expensive.
Is that true ? Does the cost of living always go up when the minimum wage increases?
People are idiots. Do you realize $15/hr min wage is cost more that $15/hr to an employer? Contribution to Unemployment, social security etc and even insurance to coverage if the worker gets hurt on the job. It will kill jobs, small businesses have hard enough time now. Mc Donald is already getting ready for computer/robots to do the work instead. And in some restaurants you have a computer where you can order you food instead of dealing with people.
Raising wages will continue to hurt the economy and we are heading to another depression. Just like the great depression, unions have caused a lot of problems.
Quote:
With the high demand for a minimum wage of $15/hr and the protests getting worse every day, this is something we had to implement. Plus with the tremendous margin of human error, poor hygiene, lack of education, laziness, as well as the recent advancements in artificial intelligence it just make sense to automate our restaurants now rather than later.”
i will be happy that my grocery store someday will be mostly run by robots. Personally I go to self checks at my local grocery store, where I rarely have to deal with another human being. Sure beats the unions forcing the grocery store to pay at least %16/hr already and some employees paid far higher than that just for simply tasks.
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