American Politics 3.0 - Back to Brunch

[edslunch]

Originally Posted by GirlySports

Sure but some of that is misguided.

1. When did minimum wage jobs become a career?
- When we were kids, minimum wage jobs were delivering flyers, pumping gas, working fast food only for teenagers. It was always a stepping stone to something better. We all have moved on from our first minimum wage job. Some of us probably never worked a minimum wage. My first job was a cashier at Superstore in 1996 and it was way above minimum wage.

2. By raising the minimum wage, the number of jobs at minimum wage increases.
- You raise a job from $10 to $15 but you don't raise the already $15 job so it now gets lumped in. Cashiers, office cleaning, even secretaries were never minimum wage, hence they never got tipped. But now they are. I know cleaners in the 80s that absolutely made a killing, mostly immigrants. Made 3x sometimes 5x the minimum wage at the time.

You’re responding as if the number of people on minimum wage is the main problem, and horrors if the minimum wage increased there would be more of them. The issue is actually too many people making too little money, particularly relative to decades prior. Raising the minimum wage would address that (yes with some side-effects)

[FlamesAddiction]

Originally Posted by GirlySports

Sure but some of that is misguided.

2. By raising the minimum wage, the number of jobs at minimum wage increases.
- You raise a job from $10 to $15 but you don't raise the already $15 job so it now gets lumped in. Cashiers, office cleaning, even secretaries were never minimum wage, hence they never got tipped. But now they are. I know cleaners in the 80s that absolutely made a killing, mostly immigrants. Made 3x sometimes 5x the minimum wage at the time.

This no doubt true in some sectors, but from my experience, it caused wage increase across the board. I had several minimum wage employees and some that proved more value and I paid more than minimum wage. When the first wage hike happened, the employees who were making more than minimum wage demanded an increase proportional to the minimum wage increase.

[iggy_oi]

Originally Posted by FlamesAddiction

This no doubt true in some sectors, but from my experience, it caused wage increase across the board. I had several minimum wage employees and some that proved more value and I paid more than minimum wage. When the first wage hike happened, the employees who were making more than minimum wage demanded an increase proportional to the minimum wage increase.

Why is that a problem?

[FlamesAddiction]

Originally Posted by iggy_oi

Why is that a problem?

Why is it a problem for the person paying it? That should be self-explanatory. It's like asking why higher gas prices are a problem.

[iggy_oi]

Originally Posted by FlamesAddiction

Why is it a problem for the person paying it? That should be self-explanatory. It's like asking why higher gas prices are a problem.

You’re comparing apples to oranges because the higher price of gas isn’t currently leading to increased wages for the workers at gas stations or to those working in production of the fuel yet the companies producing it are making more off of it, but I will say that in general if workers were making more then higher gas prices wouldn’t be as big of an issue for them.

There isn’t anything forcing you or any business to give employees earning higher than minimum wage a raise.

[PepsiFree]

Originally Posted by FlamesAddiction

Honestly, consumers don't want to pay what things are actually worth and that is a big issue. The cost of the product or service would be passed on to the consumer, and suddenly the new minimum wage is no different than the old minimum wage.

This isn't really true, though, it's just a lie people are told to convince them some people need to stay poor for the betterment of everyone.

Put it this way. In a restaurant, food costs should be about 30% (of which, about 40% is labour costs down the line) and labour costs should be about 30%.

So for every dollar of revenue, right now, 42 cents is labour. If labour costs doubled (pretending everyone was at $7.50 minimum wage and they're now at $15), it would go up to 84 cents. So to cover the labour increase, a $10 meal would have to be $14.20 (a 42% increase).

Say all the customers are minimum wage earners. Previously, at $60 per day ($7.50 x 8) they were spending 17% of their day's salary on that meal. Now, with the increase they're making $120 a day and spending 12% of their salary on that meal. They can buy that meal and still have $6 more in their pocket than they would've had if they bought the meal when everyone was making $7.50. Almost a whole hour's worth of income at their previous wage.

So even with the increased cost of food, they are spending a lower percentage of their income on it. Obviously those are rough numbers, but no, it is not true that there is no difference.

Originally Posted by GirlySports

That's a push from the left, which is good so I can't see how you're saying that social upward mobility is declining. The right could care less about any of this, they would keep a 12 white man boardroom if they could.

But it can create other problems as not 100% of the people can socially move upward and leftist policies want to protect those left behind too. However, there still has to be competition, business still have the hire the best.

Because I'm not using my own personal anecdotes as evidence? Just because you're doing well (in Canada) doesn't mean the American Dream is working as intended. That doesn't even make sense. Upward social mobility is also not restricted to people in minority populations.

https://www.theguardian.com/commenti...rd-mobility-us

https://www.visualcapitalist.com/the...-in-one-chart/

https://equitablegrowth.org/the-amer...-peer-nations/

And "there needs to be competition, businesses have to hire the best" would be compelling if it weren't for the fact that hiring decisions are almost always completely subjective and the idea of "the best" is based entirely on nonsense.

https://www.businessinsider.com/mana...mselves-2014-5

https://www.linkedin.com/pulse/myth-...ug-livingston/

https://medium.com/small-business-st...e-7860519b2003

As usual I'm a little confused about what your point is because you seem to be contradicting yourself and offering up random corporate platitudes that I don't really know how to respond to. You seem to accept the status quo. That's fine. Most people who have done well for themselves in a completely different country usually do.

[FlamesAddiction]

Originally Posted by PepsiFree

This isn't really true, though, it's just a lie people are told to convince them some people need to stay poor for the betterment of everyone.

Put it this way. In a restaurant, food costs should be about 30% (of which, about 40% is labour costs down the line) and labour costs should be about 30%.

So for every dollar of revenue, right now, 42 cents is labour. If labour costs doubled (pretending everyone was at $7.50 minimum wage and they're now at $15), it would go up to 84 cents. So to cover the labour increase, a $10 meal would have to be $14.20 (a 42% increase).

Say all the customers are minimum wage earners. Previously, at $60 per day ($7.50 x 8) they were spending 17% of their day's salary on that meal. Now, with the increase they're making $120 a day and spending 12% of their salary on that meal. They can buy that meal and still have $6 more in their pocket than they would've had if they bought the meal when everyone was making $7.50. Almost a whole hour's worth of income at their previous wage.

So even with the increased cost of food, they are spending a lower percentage of their income on it. Obviously those are rough numbers, but no, it is not true that there is no difference.

Labour cost isn't the only thing that increases with a minimum wage increase though. The cost for everything goes up all the way through the supply chain. Every industry that plays a role in getting a product or service to market increases their fees relative to their increased wage costs and it shows up in the prices. The cost of food production, energy, transportation, and rent goes up. Property owners that charge rent will certainly notice their costs going up and will pass that on to both commercial and residential renters.

There is lag, but eventually it all catches up and it doesn't take long. If it didn't, there would still be a $4 minimum wage. It's not a real solution to a much bigger problem. To be fair, I don't think there is a solution that doesn't involve a complete restart of the current capitalist system which won't happen. I think when I started in the workforce, the minimum wage was $4.55 in Ontario and increases since then haven't fixed anything. The only thing that seems to change are major chains benefiting at the expense of small business every time these purges happen and industries see hiccups, which just makes the capitalist pyramid that much more pronounced.

[SebC]

Originally Posted by FlamesAddiction

The only thing that seems to change are major chains benefiting at the expense of small business every time these purges happen and industries see hiccups, which just makes the capitalist pyramid that much more pronounced.

Come on. If that were true, Walmart would be for increasing the minimum wage, not against it.

Look, you're right that input costs have their own labour costs and those get affected to. But the whole cause of inflation isn't that the minimum wage goes up and then the price of goods goes up equally (it doesn't, labour isn't the only input) and then the minimum wage goes up again. In fact, inflation is generally controlled by monetary policy.

[PepsiFree]

Originally Posted by FlamesAddiction

Labour cost isn't the only thing that increases with a minimum wage increase though. The cost for everything goes up all the way through the supply chain. Every industry that plays a role in getting a product or service to market increases their fees relative to their increased wage costs and it shows up in the prices. The cost of food production, energy, transportation, and rent goes up. Property owners that charge rent will certainly notice their costs going up and will pass that on to both commercial and residential renters.

There is lag, but eventually it all catches up and it doesn't take long.

The cost of everything goes up because the labour goes up. I know, I showed this in the example by illustrating both the direct cost of labour and the indirect through the food supply. I also used an example that assume everyone involved was making minimum wage, which we know isn't true (especially when it comes to energy, transportation, rent, etc.) so the actual cost increases will be even smaller than I illustrated. So the point remains the same, which is that costs will go up, but to the end consumer (specifically the minimum wage one) the increases are so diluted that receiving the increased salary is a higher direct benefit than the associated costs are a detriment.

And yes, things will always go up. Costs will always try to catch up to wages. That's why cost of living increases exist. The problem right now is that the minimum wage lags so far behind the cost of living in many places, that people cannot afford to live. You put everything up to a living wage (which may not be $15, it's just the example) and then manage the rest through cost of living increases of those wages and the minimum.

When you started out, you were making $4.55. What if you were still making $4.55 today? How would you be doing? Unchecked capitalism is the reason things are always going up. It's also the reason wages, including the minimum wage, must continue to go up.

The goal isn't to make everyone rich or well off. The goal is to ensure everyone can participate in the economy and provide for themselves with a living wage.

I know these kind of things are tough for small business owners. I get it. But businesses should not survive solely on their ability to pay people a wage they are unable to survive themselves on. That's putting a business owner, or one person, above the people that work for them. Why should that be? Why should we want that? (Honest question, not rhetorical). If a big company, as ####ty as they can often be, is going to come in and fill that demand and pay people the higher wage, is that not better for those people?

[PepsiFree]

Originally Posted by FlamesAddiction

The irony of restaurant owners surrounded by food all day having to rely on the food bank to feed their families while their employees were doing better than them financially. I saw it with my own eyes.

And just to circle back on this because it links to my point above. From an objective viewpoint, this is a better situation than having one restaurant owner do well while their employees were doing worse than them or struggling financially, isn't it?

Isn't it better to have a greater number of people doing well?

[FlamesAddiction]

Originally Posted by SebC

Come on. If that were true, Walmart would be for increasing the minimum wage, not against it.

Look, you're right that input costs have their own labour costs and those get affected to. But the whole cause of inflation isn't that the minimum wage goes up and then the price of goods goes up equal (it doesn't, labour isn't the only input) and then the minimum wage goes up again. In fact, inflation is generally controlled by monetary policy.

Wal-Mart might not be in favour of minimum wage increases just like they aren't in favour of other things that hurt all businesses from profiting, like pandemics for example. But they still benefit from the collateral damage.

And you are right about wage increases not being the whole cause of inflation, but it is on top of the other factors.

[nfotiu]

Where does this assumption Walmart is against increasing min wage come from. Their ceo has come out in favor of increasing it. https://www.businessinsider.com/walm...ongress-2019-6

Also Walmart has a $12 company wide min wage.

[calculoso]

They want their employees to have enough money to buy more product at Walmart.

[FlamesAddiction]

Originally Posted by PepsiFree

Isn't it better to have a greater number of people doing well?

I contend that you aren't going to have more people doing well. The system is self-correcting. The minimum wage has increased numerous times in my lifetime. Why is this going to be the time that it finally changes anything? I'm not saying nothing should be done or that there isn't a problem, I'm just saying that targeting employers isn't always the right step. Cost control of necessities, subsidies, and tax breaks for poor people would be a much better route to go IMO.

I think more wealth distribution is a good thing, but not at the expense of people that don't have excessive wealth. If you had $20, it wouldn't be a good thing for you to have to give $1 to nineteen people with no money. It wouldn't solve the underlying issues.

https://www.forbes.com/sites/timwors...h=1954a3125ec8

I'll admit that I am biased on the issue due to my personal experiences. It makes it difficult to not get emotional about it, so it feels like a good time to stop reading for a while. I'll just leave this here for consideration and critiquing if people feel so inclined.

https://www.fraserinstitute.org/arti...-it-meant-help

Of the 90 studies reviewed, five specifically examined minimum wage changes in Canada. All five studies concluded that there were negative consequences for employment from increases to minimum wages. For example, a 2006 study by economists Michele Campolieti, Morley Gunderson and Chris Riddell found that a 10-per-cent increase in the minimum wage resulted in a 1.4- to 4.4-per-cent reduction in the youth (aged 16 to 24) employment rate.

Research also indicates that employers often respond to increased minimum wages by reducing other benefits and on-the-job training. Even if workers earning the minimum wage are lucky enough to keep their job and the number of hours worked, they may still not be better off due to reduced benefits and/or training. A recent study in the Journal of Labor Economics found that the proportion of young workers receiving formal training fell by one to two percentage points for every 10-per-cent increase in the minimum wage.

Another unfortunate reality of increased minimum wages is that they increase high school drop-out rates. Duncan Chaplin and his colleagues published an important study in 2003 in the academic journal Economics of Education Review which found that higher minimum wages were related to reduced school enrolment among teenagers.

One of the most common misconceptions is that the majority of minimum wage earners are adults struggling to make ends meet while supporting families. In fact, the typical minimum-wage worker is young and lives at home.

The above is a right of center source (The Fraser Institute), but it does provide sources for the information.

https://hbr.org/2021/06/research-whe...20by%2014.9%25.

However, our data suggests that the way in which those hours were allocated among workers did change. For every $1 increase in the minimum wage, we found that the total number of workers scheduled to work each week increased by 27.7%, while the average number of hours each worker worked per week decrease by 20.8%. For an average store in California, these changes translated into four extra workers per week and five fewer hours per worker per week — which meant that the total wage compensation of an average minimum wage worker in a California store actually fell by 13.6%.

This decrease in the average number of hours worked not only reduced total wages, but also impacted eligibility for benefits. We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%. This suggests that as minimum wage increases, firms may strategically adjust their scheduling practices to reduce the number of workers eligible for benefits: Our estimates suggest that the average store in our California data set recouped approximately 27.5% of the increase in its wage costs through savings associated with reducing benefits.

Not sure what the slant is for the HBR, but assuming the same as the Fraser Institute. Their data is specific to California.

Here are some anecdotal experiences in Ontario that go along with the themes above:

https://torontoobserver.ca/special-r...wage-increase/

The Toronto Observer has no particular leaning. I won't quote anything, but it is there to read.

[Harry Lime]

Need some TLDR to keep up in here.

The increase in cost to up an employee to a higher minimum wage is spread out amongst sales. For the example of the waiter, it's not one customer that is going to have to shoulder the burden of that increase. It's about 15 (less or more) customers over an hour. So the meal is not going to be $4.20 more. It's going to be $4.20 divided by customers. So more like 28 cents more per meal.

[FlamesAddiction]

Originally Posted by Harry Lime

Need some TLDR to keep up in here.

The increase in cost to up an employee to a higher minimum wage is spread out amongst sales. For the example of the waiter, it's not one customer that is going to have to shoulder the burden of that increase. It's about 15 (less or more) customers over an hour. So the meal is not going to be $4.20 more. It's going to be $4.20 divided by customers. So more like 28 cents more per meal.

Not quite. For one, there wouldn't be just one server working in the entire establishment. You would have prep cooks working in the day time, often before the place even opens up for business whose wages would need to be worked in. You would have kitchen staff working during the sales, possibly a host/hostess, bartender, other servers, etc... depending on the type of business.

You also have to account for the periphery costs that would go up. The companies supplying the product would have higher wage costs and would charge more for the food. The delivery companies would have higher wage costs and would charge more for delivery. If the business relies on advertising, the companies that provide those services will have higher wage costs which get passed on. Cleaning services, maintenance companies, equipment repairs, rent, and everything else becomes more expensive for the business owner. All those costs would have to get factored in.

[PepsiFree]

Originally Posted by FlamesAddiction

Not quite. For one, there wouldn't be just one server working in the entire establishment. You would have prep cooks working in the day time, often before the place even opens up for business whose wages would need to be worked in. You would have kitchen staff working during the sales, possibly a host/hostess, bartender, other servers, etc... depending on the type of business.

You also have to account for the periphery costs that would go up. The companies supplying the product would have higher wage costs and would charge more for the food. The delivery companies would have higher wage costs and would charge more for delivery. If the business relies on advertising, the companies that provide those services will have higher wage costs which get passed on. Cleaning services, maintenance companies, equipment repairs, rent, and everything else becomes more expensive for the business owner. All those costs would have to get factored in.

Should an establishment that is able to exist solely on the backs of that many people, including the generally higher paid professionals you mentioned, making less than $15 even be in business?

That’s an unsustainable model doomed to fail. Those are the types of businesses that deserve to fail.

[GGG]

Originally Posted by FlamesAddiction

Not quite. For one, there wouldn't be just one server working in the entire establishment. You would have prep cooks working in the day time, often before the place even opens up for business whose wages would need to be worked in. You would have kitchen staff working during the sales, possibly a host/hostess, bartender, other servers, etc... depending on the type of business.

You also have to account for the periphery costs that would go up. The companies supplying the product would have higher wage costs and would charge more for the food. The delivery companies would have higher wage costs and would charge more for delivery. If the business relies on advertising, the companies that provide those services will have higher wage costs which get passed on. Cleaning services, maintenance companies, equipment repairs, rent, and everything else becomes more expensive for the business owner. All those costs would have to get factored in.

So should the government subsidize these workers living expenses in order to keep these businesses providing hours?

Or should it just tax the people using these services more, cut out the middleman and pay out a UBI?

[CliffFletcher]

A great many businesses operate with a slim profit margin - especially small businesses like restaurants. Maybe businesses that can’t afford to pay all employees a living wage of $45k or whatever deserve to fail. But if that’s the route we want to go, let’s be honest about the likely outcome - better but fewer jobs. Given the profile of who works in the lowest-paid jobs, that means higher youth unemployment.

[GirlySports]

Originally Posted by PepsiFree

Should an establishment that is able to exist solely on the backs of that many people, including the generally higher paid professionals you mentioned, making less than $15 even be in business?

That’s an unsustainable model doomed to fail. Those are the types of businesses that deserve to fail.

That will be most businesses and only the big franchises will be left. Or the worker now getting a fait living wage will getting that wage for doing two jobs instead of one.