Honestly: the minimum wage does need to go up

[enders-shadow.livejournal.com]

This post got me thinking.

I am firmly in favor of:

A) A higher minimum wage in the whole US, and my home state of NY
B) Honesty in politics

While the OP I linked to is not exactly dishonest, it's not exactly honest either.
And this is not to put flak upon the poster there, but it's an example of political rhetoric that is used to leverage one side of a conversation, ignoring nuance.

the graphic in the linked to OP:

1) Doesn't seem to take into account state laws that raise min wage over fed laws
2) Doesn't take into account the vast difference in housing throughout a state

My objection is more with 2 than 1. 1 is easy to take care of, but 2 is not easy.

New York City is WAYYYY more expensive than Rochester or Buffalo, NY; or a large number of other places within the state I could name. Yet, this graphic gives us a number, presumably an average. But that average is way skewed. But how else should they do it? Give us on graphic for NYC and another for the rest of NY State? That wouldn't work either, because then you'd need to break it down for other cities and so on. So what do we do?

We must talk about things in the big picture without getting bogged down in details, otherwise we will have to talk for eons before we can understand what needs to be done. So while I agree that the min wage needs to go up, across the US, I have a problem with the info-graphics created to support that argument. They lack nuance, and as such, are deceiving. Even if they don't mean to be, and are honestly doing the best they can to compile and sort the data, the inevitability of misleading data is going to doom us all.

That said.
Happy saint patty's day.
Was I drunk when I wrote this? You decide.

Comments

[kylinrouge.livejournal.com]

Labor costs represent a vanishingly small portion of overall cost. So even if you increase minimum wage say, 15%, it will only result in a like 2-3% increase in the cost of the good to produce (and that is in high labor industry like food service).

And businesses will not fire people, that is a fucking myth, they will always keep as many people as they need to meet demand.

Raising minimum wage would also have a positive pressure on demand, so it is even likely that businesses will need to hire more people.

I can only speak from personal experience as a business owner

[rick-day.livejournal.com]

Not in my industry. Labor costs are well managed at 30%. You can't run a business our size with less labor and we really need more. We just hired 3 people this week. Remember, labor costs is just not wages. It is compliance and reporting and paying of payroll and FICA, and fairly and legally determining that amount, etc.

I never said an increase in the MW would result in layoffs or elimination of potential jobs. I do agree that is a myth.

In a meeting room of my event center, I get $50 per hour. Are you saying I am going to increase that rate 3% to $51.50 an hour? No. Everything goes up. Rent, supplies, utilities. When I raise that rate, it will be to $55 an hour. Until then, it will stay at $50.

[kylinrouge.livejournal.com]

I like how you admit that much of your labor costs are fixed and would not change after a minimum wage increase, but you still beat the drum.

[rick-day.livejournal.com]

'fixed' in an accounting target kind of thing. Not 'fixed' like 'set in stone'. It's just an arbitrary goal for profitability in this industry.

I am not against raising the min wage if you are not against helping me pay for it.

And I don't get why you can't understand the business side. It is like you only want to hear one side; yours. Who is doing the job creating here and taking risk, you or me?

[kylinrouge.livejournal.com]

We were talking about how a bunch of employment costs are fixed. How changing the labor costs does not affect all the other costs.

Sure, I'll agree to a miniscule amount of higher prices. If only 6% of people make minimum wage then raising it will not seriously impact prices.

I highly doubt you've actually run the numbers of how much costs are impacted due to the raise of a minimum wage. I know you say you're a business owner, but these answers make me skeptical. Even if you are, it doesn't sound like you have run the numbers.

As for your bar example, do your bartenders actually make minimum wage? They get the service industry minimum and make most of their income from tips. Bartenders aren't actually "minimum wage", all it means is that their tips add up something that's higher than minimum wage, otherwise that's what they make. Increasing the minimum wage on bartenders would not drive up the price of drinks, in fact it wouldn't affect their wage AT ALL. All it would do is increase the minimum they must earn with tips, which wouldn't change the real amount they earn or the real costs of employing them.

I mean maybe you pay them minimum wage and let them keep what they earn in tips, but that's not how people make money in the service industry.

Even if we assume this specious argument that it would raise prices, you're not seriously going to tell me that a 30 cent increase on minimum wage for a bartender will affect the price of an 8 dollar beer. They only need to serve like 8 drinks an hour to make 'minimum wage'.

[kylinrouge.livejournal.com]

How changing one price point of the labor costs does not affect the others*

[rick-day.livejournal.com]

you're not seriously going to tell me that a 30 cent increase on minimum wage for a bartender will affect the price of an 8 dollar beer.


No, but what I will say is a .30 cents an hour increase is a joke and should not be considered.

I guess now we delve into what is a 'living wage'.

Bartenders keep tips. If it is a horrible night or they would a private event and don't get tips, we guarantee them $8 an hour.

Tips or no tips, they, unlike other hourly folks here, only get minimum wage in their paycheck. No one guarantees them tips. But they still bring home more than even the top managers.

[rick-day.livejournal.com]

Let me give you an example.

Bartenders in my place are, 'take home pay' wise, the highest paid employees by far. Also, they are the only ones who are paid minimum wage.

Do you think that is fair to those who are paid a salary well over minimum wage? If you want to talk about fairness, talk about equity, not about an arbitrary wage amount.

Think bigger.

[mikeyxw.livejournal.com]

If only we had an infographic to tell us how an increase in minimum wage would affect employment and inflation across every industry.

[kylinrouge.livejournal.com]

Yeah, maybe we can use evidence from the countries that seem to have no problem raising minimum wage without their economy collapsing.

[rick-day.livejournal.com]

name a global economy of significant size that is not collapsing.

[kylinrouge.livejournal.com]

Germany, Turkey, France.

[mikeyxw.livejournal.com]

You should use evidence from those countries as well as those whose labor costs have caused persistently high youth unemployment for the last decade and those that have created a second tier labor market to mitigate the effects of high labor costs. All in all, it’s been a mixed bag.

[kylinrouge.livejournal.com]

I would attribute more to the diminished manufacturing sectors and outsourcing than 'high labor costs'. If you want to do more you hire more people, if you don't want to do more or can't then it's because demand is low, the market is over-saturated, or... a host of other reasons really. I would deign to assume people are paid too much. It's not like lowering wages creates jobs if they're already hired to capacity or at max productivity.

[telemann.livejournal.com]

Not exactly what you wanted, but

[il-mio-gufo.livejournal.com]

it would be neat to see the percentages of people working at, or 5 dollars above, the minimum wage.

[kylinrouge.livejournal.com]

Mississippi find yourself another country to be part of~

[malakh-abaddon.livejournal.com]

I'm moving to Washington...

[gunslnger.livejournal.com]

Actually, Oregon would be better, as it has the lowest population of people actually on minimum wage.

[mikeyxw.livejournal.com]

Aw, I'm touched by the thought but I was actually being sarcastic. I expect it would be impossible for an infographic to capture the effects of raising the minimum wage on unemployment.

We can can say that for those low income workers who still have jobs, it would be a good thing. For those who would no longer be employed, it would be bad.

[peristaltor.livejournal.com]

I expect it would be impossible for an infographic to capture the effects of raising the minimum wage on unemployment.

True. One problem one must face is that infographics are based upon theory. When the theory is wrong, the graphic is going to be wrong as a well. Washington State is a great example. Every time the MW was about to climb, the graphs spoke of doom; after every climb, things got a bit better.

If only a minimum empirical test were required for econ theorists. No would cry over the bad neoclassical econ prof jobs going away.

[allhatnocattle.livejournal.com]

Business' DO INDEED fire people! They will keep half the staff and expect them to do twice the work. This is quite common.

[peristaltor.livejournal.com]

Not without consequence. At work (I drive county buses), they couldn't fire, but they could slow attrition replacement, increase run times (increase the shift size) and reduce the "recovery", the down-time between scheduled runs designed to keep runs on schedule in unpredictable heavy traffic and allow drivers to use bathrooms.

Consequence? Accidents up over 800%; runs going unfilled (since drivers don't have the energy to pick up extra work anymore); service deteriorating.

You get what you pay for.

[allhatnocattle.livejournal.com]

weighing cost savings vs. benefits, in your occupation perhaps it wouldn't work. But in other industries it does work. Where many offices cut staff by a third and still produces same amount of product

[peristaltor.livejournal.com]

The principal is the same where ever it happens. What may differ is the severity of the consequences, or whether management decides the consequences are worth the effort.

Take journalism. For years, management has placed the same return requirements on newspaper, telly and radio, even in down economies demanding 20% return per year. The result? A slow whittling of quality, perhaps not noticeable at any given year, that has left our news emasculated by world standards, reduced to celeb gossip and burying any news-worthy stories. When these outlets screw up, blame goes to the reporter (Dan Rather comes to mind), not the lowered standards that left, say, 60 Minutes with producers lacking the experience to judge the details of the story.

Ah, but it turns out that simply leaves the American public ill-equipped to dig into the injustices surrounding them, including the question of whether or not its reporters are doing a good job. The companies owning the news outlets benefit, since, of course, many of the shenanigans are theirs.

Since few ask the hard question, "Is this reporting accurate?" the public is left blaming whoever the news thinks should be blamed. In the case of people killed by buses last week, the first suspect is the driver, of course, not the impossible schedule the driver is being asked to fill.