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Obama to use executive order to raise minimum wage

Wrangor said:
You raise it $3/ hour I guarantee you it would. Raise it $10 and it would have an even bigger effect. Raise the minimum wage .75 or a buck, and you can probably get away with it without a huge backlash. Think about a single hotel that probably employs somewhere between 30-40 hourly/minimum wage candidate employees.

30 employees x $3 raise x 40 hours a week x 50 weeks = $180,000 in new labor costs. For a single hotel that will eat up your entire profit for the year. So what will they do? Probably lay off 5-8 employees to mitigate some of the cost difference. It is math. You can't increase wages 30-40% and not expect backlash. Some industries like hospitality will be hurt more than others, but in the end it would make a huge net loss for employment when you take that big of a jump at one time.
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So they lay off 5-8 employees and then have the same amount of labor left to do. They don't want to pay overtime to those employees since time and a half is going to eat up even more of that profit. Small businesses aren't employing minimum wage labor for the most part, it seems that it's almost disproportionately large corporations. If they raise the minimum wage and McDonald's has to take the hit, even if they internalize zero of the costs they can just charge more for food and make consumers take the hit. Obviously this is a small-scale point and doesn't have unintended consequences (positive or negative) just an example.
 
Wakeforest22890 said:
I think framing it solely as an issue of "low wages" versus "no wages" is dishonest. A lot of it is how we view who should bear the costs of low-wage workers. Under the current regime employers hardly bear any of the costs while the brunt of the force falls on the low-wage worker and then some of it falls on the taxpayers who subsidize it. I'm fine shifting the costs more to employers, particularly restaurants. And besides who really knows if we will actually see a lot of people out of a job if minimum wage is raised? People definitely won't want to pay overtime so we may see hours dwindle slightly for low-wage workers but more people employed.
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You do realize we just put the load of healthcare on employers as well. We are trying to revitalize hiring not kill it.

More taxation + higher healthcare costs + increase labor costs = more people being employed.

Didn't you say you moved away from the REpublican party because they weren't dealing with practical solutions?
 
Wrangor said:
You do realize we just put the load of healthcare on employers as well. We are trying to revitalize hiring not kill it.

More taxation + higher healthcare costs + increase labor costs = more people being employed.

Didn't you say you moved away from the REpublican party because they weren't dealing with practical solutions?
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I don't think that health care should be tied into employers either. That doesn't make any sense to me at all.

How is it practical that we should just not raise the minimum wage because there might be some negative consequences? Maybe raising minimum wage is not the best way to go about increasing the purchasing power and total income/wealth of the low-wage workers, but it's the only politically viable option since most people in America regardless of party affiliation are against a living wage.
 
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Meh. It's a variable. Businesses plan for variables. A due increase in wages won't send everything into a death spiral.
 
Wakeforest22890 said:
There are plenty of studies out there that show that raising the minimum wage doesn't even have a tangible impact on employee displacement like a lot of other economists posit that it would.
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There are also plenty of studies and economists who say raising the minimum wage does kill jobs. Further, most of the studies I've read that show minimal impact deal with a $1-2 dollar raise. Nothing I've seen has looked at a jump of nearly 3. Among other things, the studies that demonstrate no loss in jobs posit that things like decreased benefits and increased prices are part of the explanation. When prices go up at McDonalds, Wal-mart, and other large minimum wage employers in order to respond to an increase in minimum wage, who does that affect the most? Minimum wagers who buy there. It's just not as simply as "it's obvious we should raise the minimum wage to $10...how can anyone disagree?!?!?! OMG!"

That said, I'm not a huge fan of a minimum wage at all. I think we'd gain more, especially those in the lower income bracket, if the Federal Reserve with stop monkeying around with their own version of "trickle-down" economics.
 
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Wakeforest22890 said:
I don't think that health care should be tied into employers either. That doesn't make any sense to me at all.

How is it practical that we should just not raise the minimum wage because there might be some negative consequences? Maybe raising minimum wage is not the best way to go about increasing the purchasing power and total income/wealth of the low-wage workers, but it's the only politically viable option since most people in America regardless of party affiliation are against a living wage.
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Some studies have shown that it'd cost less economically to just increase tax credits to the poor vs. raising the minimum wage, but then we're giving handouts. And handouts are bad. Working and bootstraps are good.
 
Wrangor said:
I am against raising the minimum wage from 7.25-10.10 in one fail swoop when we are finally making traction on unemployment. It sounds real nice until a bunch of people are laid off because labor costs just skyrocketed. The primary issue isn't low wages, the primary issue is whether they have wages or not.
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Wrangor, I defend you sometimes, because I find myself both agreeing with you and understanding you when I disagree with you. However, this is a false/ straw man argument. The people who do the hard (underpaid) work don't get the axe. In the corporate world it is the middle management that gets cut when the "belt tightens". Example: 1 Year ago Hertz bought Dollar Thrifty Auto Group. In the past year Senior/ Area/ General Managers from the Dollar Thrifty side have been forced out and under qualified Hertz managers have replaced them. Regions have expanded for these managers, and quality of service has dropped.

In any business payroll is your highest expense - and IT SHOULD BE. You want the best workers doing the best job for the company. The $3 raise is like pissing in the ocean to try to make the sea level rise.
 
RacerDeac said:
There are also plenty of studies and economists who say raising the minimum wage does kill jobs. Further, most of the studies I've read that show minimal impact deal with a $1-2 dollar raise. Nothing I've seen has looked at a jump of nearly 3. Among other things, the studies that demonstrate no loss in jobs posit that things like decreased benefits and increased prices are part of the explanation. When prices go up at McDonalds, Wal-mart and other large minimum wage employers to respond to an increase in minimum wage, who does that affect the most? Minimum wagers who buy there. Like I said, it's far more complicated than "it's obvious we should raise the minimum wage to $10...how can anyone disagree?!?!?! OMG!"
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Well first of all those were two different thoughts. One was, raising the minimum wage is obvious. The second was having it at $10 to me seems to be pretty reasonable. The real question I have is how purchasing power is impacted, not that jobs will be decreased. Businesses will still have the same amount of labor to do and can't just lay off workers unless they weren't needed in the first place. The real problem is that companies like Wal-Mart are getting their products in the globalized economy from areas where there are limited or no minimum wage protections while also willing to just take the FLSA violations and pay it off as a business expense. We need more expansive FLSA legislation that punishes repeat offenders and does so at a higher rate (tie it to percentage of profit from the last year). Wal-Mart specifically is pretty much universally regarded as a company who willfully violates the FLSA and they don't really care at all because it still makes them more money to do so.
 
So let me understand what Wrangor is saying here.

The drawbacks of raising the minimum wage are that businesses become leaner and more efficient by retaining their top workers that they need and paying them enough to get above the poverty line.

Meanwhile, the taxpayer is off the hook for the minimum wage worker and only left with those who legitimately don't have a job because the jobs don't exist.

I don't really see a problem with this.
 
bigdoublezero said:
Some studies have shown that it'd cost less economically to just increase tax credits to the poor vs. raising the minimum wage, but then we're giving handouts. And handouts are bad. Working and bootstraps are good.
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Yep it's like asking people to self-identify if they've ever received a form of government welfare and there's a hilariously high gap between those who believe they have received it and those who actually have. Americans love to self-identify that they've done it all on their own when not realizing what the government actually provides for.
 
PhDeac said:
So let me understand what Wrangor is saying here.

The drawbacks of raising the minimum wage are that businesses become leaner and more efficient by retaining their top workers that they need and paying them enough to get above the poverty line.

Meanwhile, the taxpayer is off the hook for the minimum wage worker and only left with those who legitimately don't have a job because the jobs don't exist.

I don't really see a problem with this.
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How do you figure? Isn't this an Executive Order applying exclusively to federal employees?
 
It's not like there's also going to be a concurrent rise in purchasing power to offset the economic losses, too.

It's not a simple scenario, and the economics on it are mixed. It's not open and shut. But to paint a rise in the minimum wage as unequivocally bad for the economy is irresponsible.

Bottom line, though, is that it's about wealth redistribution, plain and simple. Either you're informed and understand that the current distribution of wealth in the U.S. is dangerous and we should be trying to figure out ways to counteract that, or you're not.
 
jhmd2000 said:
How do you figure? Isn't this an Executive Order applying exclusively to federal employees?
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I thought we had shifted to talking about what would happen with a $10.10 minimum wage across the board. Obviously the gloom and doom in Wrangor's posts would be just from this Executive Order.
 
bigdoublezero said:
It's not like there's also going to be a concurrent rise in purchasing power to offset the economic losses, too.

It's not a simple scenario, and the economics on it are mixed. It's not open and shut. But to paint a rise in the minimum wage as unequivocally bad for the economy is irresponsible.

Bottom line, though, is that it's about wealth redistribution, plain and simple. Either you're informed and understand that the current distribution of wealth in the U.S. is dangerous and we should be trying to figure out ways to counteract that, or you're not.
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Great post, especially the last paragraph.
 
Here's a 2011 study of employers re: raising the minimum wage to $9/hour:

http://www.businessinsider.com/minimum-wage-increase-job-loss-unemployment-workers-2013-2

"Notice that only 8 percent of managers surveyed thought that firing current employees was at all important to make up for lost wages.

Only 8% THOUGHT about firing people not WOULD fire but thought about it.

Further:

"Indeed, raising the minimum wage allowed management to extract more performance from current employees in more than half of all cases.

Higher labor costs weren't only offset from cuts to total labor cost, either. Management also took several steps to increase efficiency and productivity to compensate for the higher costs:"

As usual RWers scream, yell and create fear over non-existent boogeymen to harm those who can't lobby.

Their position is abject BS and always has been.
 
Wakeforest22890 said:
How many people do you think are "mooching" off the government because they're too lazy to get a job?
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Go spend some time at your local SSA Office of Disability Adjudication and Review. It's a bigger problem than you think.

I think the minimum wage needs to be a living wage but I don't know that a living wage is equivalent to 40 hours per week.
 
DeaconCav06 said:
Go spend some time at your local SSA Office of Disability Adjudication and Review. It's a bigger problem than you think.

I think the minimum wage needs to be a living wage but I don't know that a living wage is equivalent to 40 hours per week.
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Yeah I did a few SS orders that were sent back from ALJs at my last internship and there were definitely some hilarious arguments out there concerning disabilities.

I don't think living wage is equivalent to 40 hours in all circumstances, it's a pretty broad term though that definitely varies from jurisdiction to jurisdiction
 
Wrangor said:
You raise it $3/ hour I guarantee you it would. Raise it $10 and it would have an even bigger effect. Raise the minimum wage .75 or a buck, and you can probably get away with it without a huge backlash. Think about a single hotel that probably employs somewhere between 30-40 hourly/minimum wage candidate employees.

30 employees x $3 raise x 40 hours a week x 50 weeks = $180,000 in new labor costs. For a single hotel that will eat up your entire profit for the year. So what will they do? Probably lay off 5-8 employees to mitigate some of the cost difference. It is math. You can't increase wages 30-40% and not expect backlash. Some industries like hospitality will be hurt more than others, but in the end it would make a huge net loss for employment when you take that big of a jump at one time.
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Why are the only two options fire employees or lose profits? Why can't your hotel owner increase the cost of a room stay to help compensate for increased labor costs? Where do you live that the price of a good/service is not linked to the cost of materials/labor? I am genuinely interested to know so that I can move there ASAP. For the rest of us, we consistently see the price of things we purchase increase as costs of production increase.

Using your example, if that hotel occupies 50 rooms a night that equates to ~18,000 rooms per year or a $10 increase in nightly rate to offset the increased labor cost. Since I would imagine the majority, if not all, of hotel employees making less than $10/hour are janitorial/cleaning staff I would think employing 30 of them would actually mean you have more than 50 rooms occupied at any given time. Since minimum wage would be increased across the board, all hotel owners would feel the same pressure to increase prices which would help eliminate any competitive disadvantage experienced by the hotel owner in your scenario. So basically, if you think the only response a business can have to increased labor costs are 1) fire some employees or 2) lose all your profits then let me know where you are so I can move there. I would love to pay a nickel for a loaf of bread like in the good ole days.
 
Wakeforest22890 said:
Yep it's like asking people to self-identify if they've ever received a form of government welfare and there's a hilariously high gap between those who believe they have received it and those who actually have. Americans love to self-identify that they've done it all on their own when not realizing what the government actually provides for.
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"I've been on food stamps and welfare, did anybody help me out? No."
 
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