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AllSeeingSkink wrote:

 Kilkrazy wrote:
Most minimum wage jobs are grunt level -- kitchen porter, pizza delivery, waiting on tables at cheap places, cleaner -- that kind of thing.

These jobs are a very small component of the prices the employers charge for their product/service overall.

To make an extreme example, a multi-billion dollar bank still needs its floors swept and lavatories cleaned. How much do you think an extra 50 cents an hour for those workers is going to impact on the bottom line?

But it does end up scaling the higher paying jobs as well. You don't just raise minimum wage and end up with more people on minimum wage as their wages get swallowed up by whatever the minimum is. I'd have to double check but my understanding is a factory workers in both Australia and the US earn more than minimum wage.... but they earn a similar % more than minimum wage. Again I'd have to double check, but that's what my factory worker mates have told me, because you have to pay your semi-skilled workers more than the dude who mops the floors.

Then the cost of essentials goes up along with minimum wage. The standard of living doesn't magically get twice as good if you double minimum wage.

Even though minimum wage in Australia is much higher, I'm not sure the standard of living is much higher for people on minimum wage, you still won't be able to afford to rent a place by yourself either way. You can barely survive on minimum wage in either country, it seems the main difference is people earning a bit above minimum wage (semi-skilled workers) seem to have a bit more disposable income and people in positions that require qualifications seem to have a bit less.

But there's obviously a balance. If you take the minimum wage argument to either extreme then it gets stupid, there's a sweet spot somewhere.

I can only refer you to the practical example of the UK where the rising minimum wage neither has decreased labour employment nor has increased inflation.

 Breotan wrote:
I can promise you that American corporations have next to zero problems laying off workers to cut costs. I live that experience.

And I can promise you that very few companies choose to employ people they don't need. They employ who they need to, no more, and pay them what they have to, no more. As such, if government dictates a higher minimum wage, the company doesn't just cut staff because it still needs cleaners and service staff and whatever else.

There is an effect on the margins, and the scale of that effect is constantly up for debate. But we can only begin that discussion once we understand the basics of how and why companies hire people.


Automatically Appended Next Post:

 Monkey Tamer wrote:
I've always wondered what the absolute breaking point is for fast food when automation becomes the more attractive option. It's not like the workers are paid much to begin with. It isn't like the high costs of unionized manufacturing.

I think the breaking point is probably driven more by the technology than the cost of labour. Think of it this way - in other countries around the world service staff at McDonalds are on lots more than they are in the US and we've only just started to get machines to order food (and they seem geared more at allowing for elaborate customisation more than reducing the service staff).

Think of it this way - if a machine with installation costs $50,000 and requires a lot of upkeep every year, then it's a bad option whether the service staff is on $7 or $15. But if the machine costs $5,000 and requires little maintenance then unless wage dropped to about $2 the machine is the better choice every time.


Automatically Appended Next Post:

 redleger wrote:
I am no expert, and I have read this thread for some education and thought provocation. I have had the same job for 20 years but before that I was a bus boy and burger flipper in high school. There was a minimum wage increase when I worked at Whataburger and I think it went up to $4.75 or something like that, many many years ago. the immediate response was to raise prices. I don't remember anyone being laid off. However the thought that went through my head then was if prices go up, all that extra money Im making is just going to purchase the same stuff at a higher price, so I'm really not gaining anything.

There seem to be some smart people here, so explain to me how that is wrong?

The price of food will only increase by the proportion of cost that is made up by minimum wage. For a very simple example, consider a place selling just burgers. Right now each burger might have built in to it about $1 worth of ingredients and $2 worth of minimum wage workers (service staff and burger flipper). They sell the burger for $5 giving them a $2 gross margin that they use to cover rent, advertising and management wages, and once that's covered the rest is profit.

Then minimum wage goes up, let's say it goes up 10%, from $10 to $11. Suddenly the burger is now $1 worth of ingredients and $2.20 worth of minimum wage workers. To keep their gross margin the same at $2 they'd have to increase the price of the burger to $5.20.

So yeah, there's inflation. But note that it was only 4%, a lot less than the 10% that minimum wage increased by. A person who worked one hour used to buy two burgers and have no change, now he can buy two burgers and still have 60c.


Automatically Appended Next Post:

AllSeeingSkink wrote:
You end up chasing your tail with minimum wage raises. You raise minimum wage, so stores raise prices, so your dollar doesn't go as far and your living conditions don't really improve much.

This only works if the cost of every single good is entirely minimum wage work. But in the real world where minimum wage is a small component of the cost of any good or service the argument makes little sense. Because rent, wages above minimum and raw materials make up a much bigger share of the cost goods and services.

There is a very small inflationary impact to minimum wage, but it's small enough to be fairly close to irrelevant. The real issue is deadweight loss.

But whether that's a good thing or not is debatable, with an engineering degree in Australia (where we have a reasonably high minimum wage) you don't earn a hell of a lot more than a semi-skilled factory worker (there's a difference, but the gap is small enough to make you wonder if it's worth studying for an extra 4 years ).

That's true of just about every white collar jobs. Hell even doctors earn a pretty crappy wage straight out of medical school. The point though, is that university grounding gets on a career ladder. The factory worker will start at $40k and finish his working life 30 years later at $60k (inflation adjusted). The engineer might start at $50k, but he'll finish at $150k.


Automatically Appended Next Post:

 Vaktathi wrote:
For a low end factory employing hundreds of people for $9/hr with almost zero material costs, a minimum wage increase to $15 may require a 60% price increase to cover, which may not be sustainable, though such industry is likely to have already moved overseas or be in imminent danger of it anyway.

Oh dear, the US might lose its textile industry to China. Somebody better tell 1983

Anything that's driven by low wages is already gone from the developed world. Those kinds of industries are not only so far gone from the US, that even China is starting to lose them to the next string of up and coming Asian countries like Vietnam.

 sebster wrote:

 redleger wrote:
I am no expert, and I have read this thread for some education and thought provocation. I have had the same job for 20 years but before that I was a bus boy and burger flipper in high school. There was a minimum wage increase when I worked at Whataburger and I think it went up to $4.75 or something like that, many many years ago. the immediate response was to raise prices. I don't remember anyone being laid off. However the thought that went through my head then was if prices go up, all that extra money Im making is just going to purchase the same stuff at a higher price, so I'm really not gaining anything.

There seem to be some smart people here, so explain to me how that is wrong?

The price of food will only increase by the proportion of cost that is made up by minimum wage. For a very simple example, consider a place selling just burgers. Right now each burger might have built in to it about $1 worth of ingredients and $2 worth of minimum wage workers (service staff and burger flipper). They sell the burger for $5 giving them a $2 gross margin that they use to cover rent, advertising and management wages, and once that's covered the rest is profit.

Then minimum wage goes up, let's say it goes up 10%, from $10 to $11. Suddenly the burger is now $1 worth of ingredients and $2.20 worth of minimum wage workers. To keep their gross margin the same at $2 they'd have to increase the price of the burger to $5.20.

So yeah, there's inflation. But note that it was only 4%, a lot less than the 10% that minimum wage increased by. A person who worked one hour used to buy two burgers and have no change, now he can buy two burgers and still have 60c.

But then the problem goes, and it was brought up by Redleger, that now there's been a price hike in the burger... you've explained that this isn't really a big deal, but it is, because the burger is more expensive, so one person may choose to buy groceries and cook for themselves for the evening. The grocery store has been "forced" to raise their prices to keep their margins the same, so food is more expensive. This worker who bought food just had his/her rent increased by the property management company at their apartment complex, to keep the margins, etc. etc. on down the line to the point where, yeah, the minimum wage person is in literally the exact same spot they were in before at the lower wages.

There is the real world example of the UK where increases in the minimum wage have not driven inflation or job losses.

 Ensis Ferrae wrote:
But then the problem goes, and it was brought up by Redleger, that now there's been a price hike in the burger...

Well, there hasn't really been a price hike in the burger. It more accurately reflects the true cost of a burger.

Right now, we have cheap burgers partially because we're offsetting the cost of them via the taxpayer funded food stamps and welfare that minimum wage people who make burgers are getting because they can't live with their wages. Walmart has cheap prices partially because their workforce costs Americans 6 billion dollars a year in welfare.

 Ashiraya wrote:
When everything is automated, what will humans do?

What use will there be for humans?

Ever watch Elysium?

 Frazzled wrote:

 Ashiraya wrote:
When everything is automated, what will humans do?

What use will there be for humans?

Ever watch Elysium?

Spend their time fighting robots?

 Ouze wrote:

Right now, we have cheap burgers partially because we're offsetting the cost of them via the taxpayer funded food stamps and welfare that minimum wage people who make burgers are getting because they can't live with their wages. Walmart has cheap prices partially because their workforce costs Americans 6 billion dollars a year in welfare.

Which is, IMHO, flat out wrong.

 sebster wrote:

 Breotan wrote:
I can promise you that American corporations have next to zero problems laying off workers to cut costs. I live that experience.

And I can promise you that very few companies choose to employ people they don't need. They employ who they need to, no more, and pay them what they have to, no more. As such, if government dictates a higher minimum wage, the company doesn't just cut staff because it still needs cleaners and service staff and whatever else.

Hold the phone a minute. You mean my job doesn't keep me on staff just because they like paying me!? Dude that hurts, I thought the big corporation was my friend...

So, how much of this plank can be attributed to Bernie's run for president, and how much was the Dems tapping into the zeitgeist of the Labor movement?


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 Ensis Ferrae wrote:

 Ouze wrote:

Right now, we have cheap burgers partially because we're offsetting the cost of them via the taxpayer funded food stamps and welfare that minimum wage people who make burgers are getting because they can't live with their wages. Walmart has cheap prices partially because their workforce costs Americans 6 billion dollars a year in welfare.

Which is, IMHO, flat out wrong.

Wrong as in it is not true, or wrong as in morally bankrupt?

 Ensis Ferrae wrote:

 Ouze wrote:

Right now, we have cheap burgers partially because we're offsetting the cost of them via the taxpayer funded food stamps and welfare that minimum wage people who make burgers are getting because they can't live with their wages. Walmart has cheap prices partially because their workforce costs Americans 6 billion dollars a year in welfare.

Which is, IMHO, flat out wrong.

It is, but it's also why corporations like WalMart lobby in support of the legislation. They get the govt to determine when people work enough to qualify for benefits and how much they have to get paid and then the corporations know how to schedule employees to keep them under the threshold and let the govt pick up the slack. I know our HR dept is adamant that we keep all of our part time employees scheduled so that their hours fall short of the threshold and we have to keep a buffer built in just in case somebody has to fill in and pick up additional hours. It's just cleverly disguised corporate welfare that really doesn't help people get ahead at all.

Plus the higher the wage the more stringent the requirements are to get hired. It's already difficult for unskilled people and young people with no prior work history to get jobs and increasing wages just increases that difficulty. Increasing minimum wage does more for people who already have jobs than for people trying to find jobs. Increasing wages also tips the scales in regards to the viability of automation. Automation may cost more than human labor now but if there are built in increases to wages over the next 5-10 years as local, state and federal minimum wage goes up it makes the cost of automation more affordable and viable.

Companies are already working on training consumers to be more self reliant. Most fast food restaurants I've been in recently already have touch screen self serve drink fountains, and more places are switching to touch screen ordering too. WalMart is always short staffed, they'll have 12 registers but only staff 2 of them during the day, but they'll increase the number of self checkout registers. They want people to see long lines and go over and use self checkout and over time the ratio of self checkout:cashiers increases leading to one supervising cashier monitoring half a dozen self checkout registers.

 djones520 wrote:

 Peregrine wrote:

Asterios wrote:
can see the Republican's going along with this but telling the Democrats which of their programs they want to cut first?

Sounds like a good idea! We can start with some major cuts to the military, shut down all military operations in other countries, etc. That should free up quite a bit of money.

Thanks for advocating my unemployment!

Luckily, the Government issued you bootstraps to pull yourself up, by!

I kid, I kid..

 Easy E wrote:

 Ensis Ferrae wrote:

 Ouze wrote:

Right now, we have cheap burgers partially because we're offsetting the cost of them via the taxpayer funded food stamps and welfare that minimum wage people who make burgers are getting because they can't live with their wages. Walmart has cheap prices partially because their workforce costs Americans 6 billion dollars a year in welfare.

Which is, IMHO, flat out wrong.

Wrong as in it is not true, or wrong as in morally bankrupt?

Morally bankrupt, evil, dastardly, depraved, villainous, etc.

 kronk wrote:

 djones520 wrote:

 Peregrine wrote:

Asterios wrote:
can see the Republican's going along with this but telling the Democrats which of their programs they want to cut first?

Sounds like a good idea! We can start with some major cuts to the military, shut down all military operations in other countries, etc. That should free up quite a bit of money.

Thanks for advocating my unemployment!

Luckily, the Government issued you bootstraps to pull yourself up, by!

I kid, I kid..

If the Government issuing you boot straps....4-6 AD years for a 8 year obligation....wait



This contract has two parts. The part we did today is your Dep In Contract otherwise known as Delay Entry

Your going into the --->insert whatever branch here (Reserves)<---- for a eight year obligation. Your going in as a E01 for 4 years active duty leaving you with 4 years left to decide if you want to re-enlist, go into the Reserves, or Guards. If you choose to go the civilian route be advise the Military can call you back within the last four years if they need you. For a grand total of eight years. Understand? Good. Now the reason your going into the Reserves is they are going to use this portion of your contract to a adminstrative hold on the job you pick. So no one else can take it from you. It will be locked to your Contract. You do not need to make Drills or anything but you stay in contact with your recruiter unless he/she says otherwise

Now when you come back on your ship day. You be going in Active (Branch) for fours years into the MOS that you picked or they picked for you. You swear in again and this one is a no turn around.

Any Questions? No? Good. All I need for to go into effect is your finger print and half your Soul. Forgot to mention I am also the Cross Road Demon.

 Jihadin wrote:
Any Questions?

Yes. Can you please keep future posts in this thread/entire subforum on topic.

 Ensis Ferrae wrote:
But then the problem goes, and it was brought up by Redleger, that now there's been a price hike in the burger... you've explained that this isn't really a big deal, but it is, because the burger is more expensive, so one person may choose to buy groceries and cook for themselves for the evening. The grocery store has been "forced" to raise their prices to keep their margins the same, so food is more expensive. This worker who bought food just had his/her rent increased by the property management company at their apartment complex, to keep the margins, etc. etc. on down the line to the point where, yeah, the minimum wage person is in literally the exact same spot they were in before at the lower wages.

No. Sure, the grocery store will also raise prices, but again it will only be by the % in minimum wage increase, times the portion of store costs made up by minimum wage. Which by definition is less than the minimum wage increase, unless the whole business cost base is entirely minimum wage.

Rent won't increase, because rent has no minimum wage component. You might argue that they're protecting their margins, but you're forgetting that price competition exists and you can't just put the price at whatever margin you'd like to make, you have to price your property low enough to ensure a tenant. Those market pressures are exactly the same before and after the minimum wage increase. If rentors could simply choose to charge more, then they'd charge more with or without a minimum wage increase.

It's kind of amazing that people believe this argument when it comes to minimum wage, but would never make the same assumption with any other resource. If sugar manufacturers all somehow managed to have their sugar sold at 10% more... would anyone argue that there's no point raising prices because sugar manufacturers would all end up in the same place because everything will increase prices? No, they'd understand that prices would go up by the extent that sugar makes up the total economy, that sugar manufacturers would end up with a gain very slightly less than 10%, and everyone else would lose by that slight increase in overall prices. But put up that same situation with minimum wage, and everyone loses track of that simple, intuitive reality.

 sebster wrote:


Rent won't increase, because rent has no minimum wage component. You might argue that they're protecting their margins, but you're forgetting that price competition exists and you can't just put the price at whatever margin you'd like to make, you have to price your property low enough to ensure a tenant. Those market pressures are exactly the same before and after the minimum wage increase. If rentors could simply choose to charge more, then they'd charge more with or without a minimum wage increase.

You'll have to forgive me for disagreeing with this because I've a number of friends who work and live in the greater Seattle area and have been forced to find other living arrangements due to rent increasing literally a month after a wage increase took effect. It is possible that they were renting from shady property management companies, but the way they bitched about not finding the quality they had, at the price they had spoke volumes to me.


I agree with your statement insofar as houses are concerned, but not apartments in the US. And I agree based on my own experiences in using a property management/real estate company to rent out one of the houses I've bought, which is closely mirrored by the people I know in the same boat as me (owning one or more house, living in another location)

 Ensis Ferrae wrote:
You'll have to forgive me for disagreeing with this because I've a number of friends who work and live in the greater Seattle area and have been forced to find other living arrangements due to rent increasing literally a month after a wage increase took effect. It is possible that they were renting from shady property management companies, but the way they bitched about not finding the quality they had, at the price they had spoke volumes to me.


I agree with your statement insofar as houses are concerned, but not apartments in the US. And I agree based on my own experiences in using a property management/real estate company to rent out one of the houses I've bought, which is closely mirrored by the people I know in the same boat as me (owning one or more house, living in another location)

Actually, thinking about it I think you make a fair point. My first thoughts on the impact on rent were too simplistic. If a specific rental market, such as low cost apartments had a large number of people on minimum wage in them, then prices in that market could be capped mostly by what rentors are able to afford. If they can afford more then I could see rents going up.

That would then act to offset some of their increase in pay.

sebster wrote:

 redleger wrote:
I am no expert, and I have read this thread for some education and thought provocation. I have had the same job for 20 years but before that I was a bus boy and burger flipper in high school. There was a minimum wage increase when I worked at Whataburger and I think it went up to $4.75 or something like that, many many years ago. the immediate response was to raise prices. I don't remember anyone being laid off. However the thought that went through my head then was if prices go up, all that extra money Im making is just going to purchase the same stuff at a higher price, so I'm really not gaining anything.

There seem to be some smart people here, so explain to me how that is wrong?

The price of food will only increase by the proportion of cost that is made up by minimum wage. For a very simple example, consider a place selling just burgers. Right now each burger might have built in to it about $1 worth of ingredients and $2 worth of minimum wage workers (service staff and burger flipper). They sell the burger for $5 giving them a $2 gross margin that they use to cover rent, advertising and management wages, and once that's covered the rest is profit.

Then minimum wage goes up, let's say it goes up 10%, from $10 to $11. Suddenly the burger is now $1 worth of ingredients and $2.20 worth of minimum wage workers. To keep their gross margin the same at $2 they'd have to increase the price of the burger to $5.20.

So yeah, there's inflation. But note that it was only 4%, a lot less than the 10% that minimum wage increased by. A person who worked one hour used to buy two burgers and have no change, now he can buy two burgers and still have 60c.


Automatically Appended Next Post:

AllSeeingSkink wrote:
You end up chasing your tail with minimum wage raises. You raise minimum wage, so stores raise prices, so your dollar doesn't go as far and your living conditions don't really improve much.

This only works if the cost of every single good is entirely minimum wage work. But in the real world where minimum wage is a small component of the cost of any good or service the argument makes little sense. Because rent, wages above minimum and raw materials make up a much bigger share of the cost goods and services.

Sebster, I watched you go through nearly this exact same explanation last time this subject came up, and probably the time before that. I appreciate you taking the time to try and educate other people in here, even though it must get frustrating to cover the same ground over and over.

The older I get, the more I realise that lies and misunderstandings about economic policy and practices are the main reason we are so maddeningly short of our potential as a developed society.

Ensis Ferrae wrote:

 sebster wrote:


Rent won't increase, because rent has no minimum wage component. You might argue that they're protecting their margins, but you're forgetting that price competition exists and you can't just put the price at whatever margin you'd like to make, you have to price your property low enough to ensure a tenant. Those market pressures are exactly the same before and after the minimum wage increase. If rentors could simply choose to charge more, then they'd charge more with or without a minimum wage increase.

You'll have to forgive me for disagreeing with this because I've a number of friends who work and live in the greater Seattle area and have been forced to find other living arrangements due to rent increasing literally a month after a wage increase took effect. It is possible that they were renting from shady property management companies, but the way they bitched about not finding the quality they had, at the price they had spoke volumes to me.

Don't you have protections from predatory landlords where you live? I'm just across the border from you and rent increases are capped at about 2.5% a year by law.

 feeder wrote:

sebster wrote:

 redleger wrote:
I am no expert, and I have read this thread for some education and thought provocation. I have had the same job for 20 years but before that I was a bus boy and burger flipper in high school. There was a minimum wage increase when I worked at Whataburger and I think it went up to $4.75 or something like that, many many years ago. the immediate response was to raise prices. I don't remember anyone being laid off. However the thought that went through my head then was if prices go up, all that extra money Im making is just going to purchase the same stuff at a higher price, so I'm really not gaining anything.

There seem to be some smart people here, so explain to me how that is wrong?

The price of food will only increase by the proportion of cost that is made up by minimum wage. For a very simple example, consider a place selling just burgers. Right now each burger might have built in to it about $1 worth of ingredients and $2 worth of minimum wage workers (service staff and burger flipper). They sell the burger for $5 giving them a $2 gross margin that they use to cover rent, advertising and management wages, and once that's covered the rest is profit.

Then minimum wage goes up, let's say it goes up 10%, from $10 to $11. Suddenly the burger is now $1 worth of ingredients and $2.20 worth of minimum wage workers. To keep their gross margin the same at $2 they'd have to increase the price of the burger to $5.20.

So yeah, there's inflation. But note that it was only 4%, a lot less than the 10% that minimum wage increased by. A person who worked one hour used to buy two burgers and have no change, now he can buy two burgers and still have 60c.


Automatically Appended Next Post:

AllSeeingSkink wrote:
You end up chasing your tail with minimum wage raises. You raise minimum wage, so stores raise prices, so your dollar doesn't go as far and your living conditions don't really improve much.

This only works if the cost of every single good is entirely minimum wage work. But in the real world where minimum wage is a small component of the cost of any good or service the argument makes little sense. Because rent, wages above minimum and raw materials make up a much bigger share of the cost goods and services.

Sebster, I watched you go through nearly this exact same explanation last time this subject came up, and probably the time before that. I appreciate you taking the time to try and educate other people in here, even though it must get frustrating to cover the same ground over and over.

The older I get, the more I realise that lies and misunderstandings about economic policy and practices are the main reason we are so maddeningly short of our potential as a developed society.

Ensis Ferrae wrote:

 sebster wrote:


Rent won't increase, because rent has no minimum wage component. You might argue that they're protecting their margins, but you're forgetting that price competition exists and you can't just put the price at whatever margin you'd like to make, you have to price your property low enough to ensure a tenant. Those market pressures are exactly the same before and after the minimum wage increase. If rentors could simply choose to charge more, then they'd charge more with or without a minimum wage increase.

You'll have to forgive me for disagreeing with this because I've a number of friends who work and live in the greater Seattle area and have been forced to find other living arrangements due to rent increasing literally a month after a wage increase took effect. It is possible that they were renting from shady property management companies, but the way they bitched about not finding the quality they had, at the price they had spoke volumes to me.

Don't you have protections from predatory landlords where you live? I'm just across the border from you and rent increases are capped at about 2.5% a year by law.

you are lucky here it is a lot more which is why me and my wife bought a house when the market crashed, also people think property owners of apartments never have their rates go up? an apartment complex does not clean itself or pay water and garbage out of thin air, their rates go up too. as to sebster he is wrong, he keeps thinking only from the fast food point, he does not consider the entire chain required to get you that burger and how all those employees in that chain also got raises too, one of my friends who runs a fast food place (he has 2 franchises) just saw his base costs go up big time this year on the products he orders, and lump that in with now having to give his employees paid sick leave and having to pay into their health coverage, not too mention larger insurance rates, hes barely making a living now and about to shut up his place like a few others have already done so, and he has almost 60 employees working for him between both places. but hey they may be out of work but they can feel good somebody will be making $15 an hour soon, just not them.

 feeder wrote:

Don't you have protections from predatory landlords where you live? I'm just across the border from you and rent increases are capped at about 2.5% a year by law.

Honestly mate, I have no idea.

But part of at least one of my buddies' situations was made as bad as it was for them was because he works at SeaTac airport. Now, I don't know the full legalities of everything, but workers there are pretty much divided into two groups: inside the fence and outside the fence. Inside the fence workers are officially "port of Seattle" employees, and so, when Seattle started bumping minimum wage, they got that bump. Guys like my buddy who work outside the fence, didn't. Perhaps this was just a situation where a corporate apartment management company saw wage increases for Seattle, knowing that airport employees are part of the Port system, and saw opportunity to make a bit more money themselves. Perhaps there were many more rental companies that did the same, I don't really know.

Perhaps this anecdotal example is more of an illustration of how things could potentially go wrong when you keep wage increases localized at the city level, as opposed to county or state level.

Asterios wrote:
one of my friends who runs a fast food place (he has 2 franchises) just saw his base costs go up big time this year on the products he orders, and lump that in with now having to give his employees paid sick leave and having to pay into their health coverage, not too mention larger insurance rates, hes barely making a living now and about to shut up his place like a few others have already done so...

If the only way his business is viable is if his employees get poverty level wages with no benefits, maybe he's just terrible at business.

 Ouze wrote:

Asterios wrote:
one of my friends who runs a fast food place (he has 2 franchises) just saw his base costs go up big time this year on the products he orders, and lump that in with now having to give his employees paid sick leave and having to pay into their health coverage, not too mention larger insurance rates, hes barely making a living now and about to shut up his place like a few others have already done so...

If the only way his business is viable is if his employees get poverty level wages with no benefits, maybe he's just terrible at business.

My gods, having to pay for his employees to live a decent life and not be forced to take government assistance because of his greed? What has this country come to?

 feeder wrote:
Sebster, I watched you go through nearly this exact same explanation last time this subject came up, and probably the time before that. I appreciate you taking the time to try and educate other people in here, even though it must get frustrating to cover the same ground over and over.

The older I get, the more I realise that lies and misunderstandings about economic policy and practices are the main reason we are so maddeningly short of our potential as a developed society.

Thanks, and I agree. There are a lot of issues that people have very strong opinions on without actually having much of an understanding of the issue. Minimum wage is a good example, it simply can't cause so much inflation that the wage benefit just disappears. And it might cause enough job loss that it is a bad idea... but determining that 'might' is dependent on the economy in question and the scale of the raise. And yet so many people are willing to say 'it won't cause job losses' or 'it will cause job losses' without ever actually finding out about the details of the economy in question or reading any of the countless bits of quant work that might have studied that particular market.


Automatically Appended Next Post:

Asterios wrote:
as to sebster he is wrong, he keeps thinking only from the fast food point, he does not consider the entire chain required to get you that burger and how all those employees in that chain also got raises too

I was using fast food as an example to keep the model simple. Adding in a full value chain would require a lot more explanation without really adding to the basic concept.

But obviously, yes, the goods used in the fast food store come from other businesses, and those businesses will have some portion of minimum wage workers on their payroll. But the mechanic remains the same - the inflationary impact of a minimum wage increase is limited to the percentage of the economy paid on minimum wage. If 100% of the economy is paid at minimum wage then the inflationary impact of the increased wage will be exactly equal to the increase in pay and no-one will be better off. But if less than 100% of workers are on minimum wage then the inflationary impact will be less than the increase in minimum wage, and so minimum wage workers will gain.