Miami Beach Mayor Wants to Raise Minimum Wage to More Than $13 (Homestead: condo, mortgages)

[hurricaneMan1992]

Originally Posted by BNBR

You aren't missing anything. It's not as simple as minimum wage goes up and prices go up... but generally speaking, markets work themselves out. Basic supply and demand. Apartments in South Beach are being rented, so how can you suggest people can't afford them? People are managing to get to South Beach and work, for less than $13/hr. When governments try to manipulate the markets by artificially raising wages, that's when issues happen. The ONLY one who wins is the government, as they collect higher taxes on higher wages. And it's an endless cycle. You then have to come in with rent controls, because with the higher wages, people can afford a more expensive home. So rents get driven up and it eats up the wages. Landlords win. Of course, property values go up, and most of the increases go to... you guessed it... taxes....

It's exactly how it works overseas. Once you get into that cycle, you can't get out. Raise minimum wage, then need government to lower rents, then need government to provide services because people can't afford anything, and government just keeps having to fix the problem it created... and it just goes on and on.

Or, you simply let the market balance itself and maintain liberty.

It's not quite a one-to-one relationship, since prices have been going up for some time without any minimum wage increase. In fact, the correlation between housing and wages is a poor one unless you're talking about Switzerland-level minimum wages. If you want to "blame" Miami's unaffordability on something, perhaps would be speculation, hedge funds, and investors, but not any action on the part of the government. The so-called free market is quite efficient at driving up prices on it's own.

And the "People can afford a more expensive home" arguement is making the assumption that people can currently afford their home to begin with (conventionally, professional financial advisers recommend 30% of income on housing expense). In the end, I'd rather have housing prices going up due to local wage increases rather than speculation, but if you look at it, most people who can afford their home are making more than the minimum wage.

[ruski]

I just hate it when one company starts doing something nice for its employees out of the goodness of their hearts, and then the government steps in and makes it mandatory for all companies to follow.

[oronzous]

Originally Posted by go-getta-J

Spot on BNBR - people just can't seem to grasp cause and effect; doubly so for anything dealing with economics. Rents are what they are on Miami Beach precisely because they are signalling the price level of demand for housing based on the current wage structure. Has nothing to do with greedy landlords. Housing prices are what they are because there already are enough people willing and able to pay those prices.

MB is prime real estate so all increasing the the MW will do is drive up rents and then back to where we started again. Like I said before, I'm all for a modest increase in MW and tying future increases to the CPI, but minimum wage should not be something that entitles a fast food worker their own 1 bedroom apt on South Beach.

What about all of the professionals that commute 1 hour in heavy traffic from the burbs to downtown Miami? Where is their convenient and affordable Brickell condo?

why are we even talking about real estate? MB is a premium location, not for MW earners.

However, there is not causation between the two variables at hand.

Minimum wage in MB might somewhat affect prices for food or hospitality, and never up to a 1:1 ratio. There are plenty of other components in their cost structure, and they also rely a lot on tip workers, who do not even get a MW.

Some labour intensive services might show larger price increases. Landscaping, for example.

But real estate? The rather stable MW has no correlation, and therefore no causation, in the ups and downs of real estate.

[rnc2mbfl]

Most people will listen to the spin that reinforces their own world view.
The reality on the beach is that "the rent is too damn high" for most businesses. Buildings that have sold in the last decade have done so for astronomical prices. This has caused enormous rent increases along Lincoln Rd specifically. In turn, small businesses have closed or moved. The costs of labor are negligible compared to the tripled and quadrupled rents that businesses face.

That said, there are people who work and live on the Beach and many others who do not live on the beach and would never live on the beach, even with the raise.

[pslhomie]

I am of the opinion that if you have lots of job openings you will find that wages will go up because the companies will be in competition for employees. Also if you limit yourself to a $13 an hour job you will never be able to make it. I had those jobs and I went back to school to better myself and now I make far above that an hour. If you pay minimum wage positions that kind of money you will find that many businesses will go out of business limiting the economy. Minimum wage jobs should only be used as a stepping stone for something better. If you make them too comfortable then you risk lots of unemployed people or a lower standard of living.

[ruski]

Originally Posted by pslhomie

I am of the opinion that if you have lots of job openings you will find that wages will go up because the companies will be in competition for employees. Also if you limit yourself to a $13 an hour job you will never be able to make it. I had those jobs and I went back to school to better myself and now I make far above that an hour. If you pay minimum wage positions that kind of money you will find that many businesses will go out of business limiting the economy. Minimum wage jobs should only be used as a stepping stone for something better. If you make them too comfortable then you risk lots of unemployed people or a lower standard of living.

The bleedinghearts never get this.

[miamifloridafan]

Which means more job losses then ever before.

[angelscorpio]

More lay offs to break even.

[AnnRyan]

I'm a big fan of raising the national minimum wage... because for every dollar earned by a low paid worker, they end up spending just about all of it (and sometimes more than all of it). So by giving these guys a break they actually go out and fuel the economy by buying more stuff.

Give a rich guy a dollar raise and he won't even notice the difference. He won't spend a dime more.

Yes, it will result in higher prices. But also more economic activity.

Yes, this is a form of income redistribution, lowering the gap between the rich and poor (and we've reached third-world type GINI levels, so it's time to work on that).

Yes, I know most of you will not agree with me on this. But I do most of my business helping regular people buy homes using mortgages, and this will begin to help those folks.

Raising the minimum wage in Miami Beach... I doubt that will have much effect. Too small an area with too poor enforcement of existing laws.

[BNBR]

Originally Posted by AnnRyan

I'm a big fan of raising the national minimum wage... because for every dollar earned by a low paid worker, they end up spending just about all of it (and sometimes more than all of it). So by giving these guys a break they actually go out and fuel the economy by buying more stuff.

Give a rich guy a dollar raise and he won't even notice the difference. He won't spend a dime more.

Yes, it will result in higher prices. But also more economic activity.

Yes, this is a form of income redistribution, lowering the gap between the rich and poor (and we've reached third-world type GINI levels, so it's time to work on that).

Yes, I know most of you will not agree with me on this. But I do most of my business helping regular people buy homes using mortgages, and this will begin to help those folks.

Raising the minimum wage in Miami Beach... I doubt that will have much effect. Too small an area with too poor enforcement of existing laws.

I'm sure you love it, it's not YOUR money that you are a "fan" of giving away.