$15 dollar hr minimum wage?

[Deeeefense]

I worked for 12 years at a government plant. It was run by a private company on a cost plus basis. The more money that was spent, the more money they made. Large amounts of money was routinely spent just to spend it.

I was a government contracting officer for 12 years and at that time the Federal Procurement Regulations (FARS) prohibited cost plus contracts just for the reasons you point out, there is an incentive to spend. Instead if we had to contract for a service or project where it was impossible to estimate ahead of time we contract on a cost plus fixed fee basis.

 

[Ukbrassowtipin]

What do you know....exactly as I said

 

[Deeeefense]

What do you know....exactly as I said

Min wage has several exemptions. For instance it only applies to businesses with an annual gross revenue of over $500K so this excludes most of the "mom and pops". There are some lesser requirements for young persons and students:

https://www.dol.gov/agencies/whd/minimum-wage/faq

 

[BlueBallz_rivals30790]

Min wage has several exemptions. For instance it only applies to businesses with an annual gross revenue of over $500K so this excludes most of the "mom and pops". There are some lesser requirements for young persons and students:

https://www.dol.gov/agencies/whd/minimum-wage/faq

Interesting FAQ's on the $500k, students, disabilities, etc. I imagine if you are under $500k and paying less than min wage, get ready for the rubber glove treatment if there is an audit, but if you are under, nothing to worry about. The others, it looks like you need to get some type of waiver from the gov't, which is probably as enjoyable as a rectal exam. I can't see an employer, with a non-incented job, being able to pay less than min wage when anyone can go across the street for more money. In the call center industry, it's a normal occurrence for agents to leave for .25/hour. I"m sure it's the same way in most industries. I see the dems closing these when they come out with the new min wage increase, along with the restaraunt server "min wage".

 

[ukwildcat2004]

It's really a simple math equation that most people should be able to understand. All of your inputs and costs are on one side of the equation. The other side of the equation is the profit margin a business must maintain to be able to pay for its inputs and other bills. A change in one side of the equation must mean a change in the other. Yes, some companies that are big enough can absorb a small change and not much would change. With that said a increase to $15 minimum wage there's only a couple outcomes. A small business can't afford to operate at that level and therefore they close their doors. Option two is that labor costs needs to remain constant so your friend Steve that you like and you enjoy you working with is now let go. Now you get to do Steve's work and your work in half the time. So therefore you do double the work, you work less hours, and make you make about the same money. The other option is the inputs go up in price and therefore the product price increases. That means you pay more for the things you want meaning your aren't really making that $15 cause you have to spend more for the things you need. All of that said to say that $15 minimum wage will not work without some major consequences that are detrimental to our economy,

 

[8titles_rivals270261]

Min wage has several exemptions. For instance it only applies to businesses with an annual gross revenue of over $500K so this excludes most of the "mom and pops". There are some lesser requirements for young persons and students:

https://www.dol.gov/agencies/whd/minimum-wage/faq

So basically businesses with less than 500k revenue won't be able to hire competent workers because you can go to the nearest dollar store and check people out for $15 an hour. So then they have to charge $15 or more which will impact COGS. Basically this is a great way to completely get rid of small privately owned business. Makes no sense. No matter how it is written this type of ridiculous effort to subsidize ignorance and laziness will cost business owners and the general public dearly.

 

[BlueBallz_rivals30790]

So basically businesses with less than 500k revenue won't be able to hire competent workers because you can go to the nearest dollar store and check people out for $15 an hour. So then they have to charge $15 or more which will impact COGS. Basically this is a great way to completely get rid of small privately owned business. Makes no sense. No matter how it is written this type of ridiculous effort to subsidize ignorance and laziness will cost business owners and the general public dearly.

My guess is those exemptions will go away when they write the new bill, then Biden will say "we are going to help small businesses by raising the minimum wage", the same way he's saying this same type of rhetoric with oil and gas right now as he's screwing them. I think the restaraunt server exemption will go away as well, which will impact them because people will stop tipping. I always made more in tips, so that will suck for them.

 

[pitinoshairplugs]

Min wage has several exemptions. For instance it only applies to businesses with an annual gross revenue of over $500K so this excludes most of the "mom and pops". There are some lesser requirements for young persons and students:

https://www.dol.gov/agencies/whd/minimum-wage/faq

Most of those exemptions don't exist because states have their own minimum wage laws. Tipped workers is the most common that applies everywhere.

 

[Tskware]

Most of those exemptions don't exist because states have their own minimum wage laws. Tipped workers is the most common that applies everywhere.

I knew there had to be a catch, I literally do not know anyone anywhere that doesn't pay the min wage, and I know plenty of businesses who gross <$500K per year.

The main issue as previously stated is not the 1/2 of 1% who make exactly $7.25/hour, it is what is the effect of raising the wages of millions who make $9-13 per hour or so. Although I don't know how many workers that is either, but I am sure it is a large number.

 

[entropy13]

Extremely salient research paper just came out.

https://www.nber.org/papers/w28388

 

[Deeeefense]

Extremely salient research paper just came out.

https://www.nber.org/papers/w28388

Interesting but the problem with drawing any conclusions is once again you have to define the amount of the increase. Regardless of where you are on this issue I think the vast majority of people would agree that if you raised the current min wage from $7.25 to $7.50 the effect on unemployment would be negligible. However if you doubled it to $15.00 it's will almost assuredly result in some layoffs and business closings, an increase in automation resulting in an increase in unemployment.

Also the studies don't evaluate the effect on employment over a period of time. An increase in wages puts more money in the pockets of consumers which results in an increase in demand for products and services, that in turn results in an increase in employment. In one study I came across the immediate effect of a raise was a slight increase in unemployment but then two years later the unemployment level dipped below what it had been before.
Was that due to an overall increase in economic activity do to wage hikes?

The question is where is the sweet spot that will provide an optimum level of employment and economic activity? Unfortunately unlike other scientific disciplines economics cannot be studied in a lab, because there are many variables that effect something like employment and you can't control all of them and adjust one in a laboratory like min wage to observe the result.

I have long advocated for very small incremental increase to the min wage on an annualized basis. Small increases can easily be managed by most all businesses so things adjust over time, whereas one significant increase shocks the economy and has immediate negative results.

 

[Tskware]

Interesting but the problem with drawing any conclusions is once again you have to define the amount of the increase. Regardless of where you are on this issue I think the vast majority of people would agree that if you raised the current min wage from $7.25 to $7.50 the effect on unemployment would be negligible. However if you doubled it to $15.00 it's will almost assuredly result in some layoffs and business closings, an increase in automation resulting in an increase in unemployment.

Also the studies don't evaluate the effect on employment over a period of time. An increase in wages puts more money in the pockets of consumers which results in an increase in demand for products and services, that in turn results in an increase in employment. In one study I came across the immediate effect of a raise was a slight increase in unemployment but then two years later the unemployment level dipped below what it had been before.
Was that due to an overall increase in economic activity do to wage hikes?

The question is where is the sweet spot that will provide an optimum level of employment and economic activity? Unfortunately unlike other scientific disciplines economics cannot be studied in a lab, because there are many variables that effect something like employment and you can't control all of them and adjust one in a laboratory like min wage to observe the result.

I have long advocated for very small incremental increase to the min wage on an annualized basis. Small increases can easily be managed by most all businesses so things adjust over time, whereas one significant increase shocks the economy and has immediate negative results.

Small increases over a few years is what they are looking at I think

 

[Chuckinden]

There are more important things right now for government to be funding than pushing for a raise in minimum wage.

 

[pitinoshairplugs]

Interesting but the problem with drawing any conclusions is once again you have to define the amount of the increase. Regardless of where you are on this issue I think the vast majority of people would agree that if you raised the current min wage from $7.25 to $7.50 the effect on unemployment would be negligible. However if you doubled it to $15.00 it's will almost assuredly result in some layoffs and business closings, an increase in automation resulting in an increase in unemployment.

Also the studies don't evaluate the effect on employment over a period of time. An increase in wages puts more money in the pockets of consumers which results in an increase in demand for products and services, that in turn results in an increase in employment. In one study I came across the immediate effect of a raise was a slight increase in unemployment but then two years later the unemployment level dipped below what it had been before.
Was that due to an overall increase in economic activity do to wage hikes?

The question is where is the sweet spot that will provide an optimum level of employment and economic activity? Unfortunately unlike other scientific disciplines economics cannot be studied in a lab, because there are many variables that effect something like employment and you can't control all of them and adjust one in a laboratory like min wage to observe the result.

I have long advocated for very small incremental increase to the min wage on an annualized basis. Small increases can easily be managed by most all businesses so things adjust over time, whereas one significant increase shocks the economy and has immediate negative results.

A big issue with the increase in minimum wage to such a high level is that we would likely be swapping a lot of government assistance for pay. Meaning, people would lose food stamp allowances, they'd lose section 8 etc, lose medicaid... at $15 per hour, you a probably not that much more ahead than you were when you were making $7.50.

That's part of the issue we've created. Would we see a rush of people back into the labor market? no. that's why we need a real rise in wages We were seeing that before covid. Some of the fastest rising wages in the last 30+ years.

Low wage employers were seeing real pressure to find people. Hotels, restaurants etc were in a major labor shortage and that was pushing wages higher. Raising the minimum wage to $15 an hour right now would be the death nail for many of the businesses that were having such a hard time finding labor before covid. The narrative by some that "immigration has kept wages low" is absurd. Talk to a hotelier or a restaurateur and you'll find out quick how short labor was/is.

Covid crushed that momentum.

 

[CB3UK]

Interesting but the problem with drawing any conclusions is once again you have to define the amount of the increase. Regardless of where you are on this issue I think the vast majority of people would agree that if you raised the current min wage from $7.25 to $7.50 the effect on unemployment would be negligible. However if you doubled it to $15.00 it's will almost assuredly result in some layoffs and business closings, an increase in automation resulting in an increase in unemployment.

Also the studies don't evaluate the effect on employment over a period of time. An increase in wages puts more money in the pockets of consumers which results in an increase in demand for products and services, that in turn results in an increase in employment. In one study I came across the immediate effect of a raise was a slight increase in unemployment but then two years later the unemployment level dipped below what it had been before.
Was that due to an overall increase in economic activity do to wage hikes?

The question is where is the sweet spot that will provide an optimum level of employment and economic activity? Unfortunately unlike other scientific disciplines economics cannot be studied in a lab, because there are many variables that effect something like employment and you can't control all of them and adjust one in a laboratory like min wage to observe the result.

I have long advocated for very small incremental increase to the min wage on an annualized basis. Small increases can easily be managed by most all businesses so things adjust over time, whereas one significant increase shocks the economy and has immediate negative results.

This seems like a more reasoned approach akin to how I view it. I don't believe giving McDonald's workers $15 carte blanche is the answer. Nor is allowing wage inflation to remain stagnant. The value of minimum wage today is several dollars lower today than its equivalent when adjusted for inflation for each preceding decade.

So no, the kids whining about not making enough aren't to entirely wrong. Nor are old folks saying those jobs aren't meant to be lifelong careers. Reality is cost of goods has risen and wglagesbfor workers haven't.

The answer is to find that balance as you say. Can't go overboard to the point companies can't afford payroll and cut jobs entirely.

 

[8titles_rivals270261]

Between $15 minimum wage and the government giving stimulus checks at a time when the economy is very strong I really don't think they understand how to provide focused care to those that need it while not bankrupting the country.

Minimum = The least, the starting point, the bottom of the barrel. There is some usefulness in having jobs that don't pay enough for a family to live on.

Stimulus is for economic stimulation, it is not intended for COVID relief. If you are after relief for those impacted by COVID, then focus on giving them more money so they aren't sweating the electric bill, or small business can afford to stay open at 50%. Don't give it to people who already have two incomes and blow the money on needless ****.

Just my opinion.

 

[Wildcats1st]

Minimum wage should be indexed to inflation yearly. There's been no increase nationally since 2007 and it's not like inflation disappeared over the last 13 years. It probably doesn't need to be $15 but it should probably be in the $10-12 ballpark to this point.

10$ an hr. Minimum wage should be raised incrementally. Maybe 15$ an hr in 8-10 years

 

[8titles_rivals270261]

10$ an hr. Minimum wage should be raised incrementally. Maybe 15$ an hr in 8-10 years

Hard to run the economics of it right now because of the unstable environment. It could be that high but I would hate to see a dictate over 10 years given the complexity of the current economy.
- Unstable policy
- Extrmely low interest rates (nowhere to go to stimulate the economy at this point which is very scary)
- Bull market in a transition period where there could be extreme fundamental adjustments to the economy.
- A lazy workforce that is used to being propped up by government coverage
- International leverage against our debt which is the most concerning issue at hand.

The US is extremely vulnerable right now. COVID was very fortunate for those that wanted to keep us soft. If it didn’t happen we would see increased interest rates and less international debt. But the culmination of covid along with overall recovery from 2008 continuing is a huge burden on the economy.

if our legislature keeps each party at bay and we can’t implement substantial spending (like $15 minimum wage or the Big Green Deal) as a “recovery policy” then we have a chance. If we throw billions of good money at bad money to try to “stabilize” an already susceptible economy it’s going to be a battle to keep our dept low enough to withstand international investment where we lose leverage. Japan tried it years ago and ran out of money. China won’t run out, especially if we soften our standing and give them points on the dollar. Generalizing the issue but it should be concerning to everyone at this point. IMO of course.

 

[Wildcats1st]

Hard to run the economics of it right now because of the unstable environment. It could be that high but I would hate to see a dictate over 10 years given the complexity of the current economy.
- Unstable policy
- Extrmely low interest rates (nowhere to go to stimulate the economy at this point which is very scary)
- Bull market in a transition period where there could be extreme fundamental adjustments to the economy.
- A lazy workforce that is used to being propped up by government coverage
- International leverage against our debt which is the most concerning issue at hand.

The US is extremely vulnerable right now. COVID was very fortunate for those that wanted to keep us soft. If it didn’t happen we would see increased interest rates and less international debt. But the culmination of covid along with overall recovery from 2008 continuing is a huge burden on the economy.

if our legislature keeps each party at bay and we can’t implement substantial spending (like $15 minimum wage or the Big Green Deal) as a “recovery policy” then we have a chance. If we throw billions of good money at bad money to try to “stabilize” an already susceptible economy it’s going to be a battle to keep our dept low enough to withstand international investment where we lose leverage. Japan tried it years ago and ran out of money. China won’t run out, especially if we soften our standing and give them points on the dollar. Generalizing the issue but it should be concerning to everyone at this point. IMO of course.

Minimum wage has to go up because costs of living are rising. Many states with high costs of living already have a 10-12$ minimum wage. Many states on the lower end of the spectrum haven’t raised the minimum wage even in the face of quantitative easing and massive spending. A 3$ increase is due. I’m not saying to commit to some phased plan but raise it to 10$ an hr that should help close the gap

 

[Tskware]

10$ an hr. Minimum wage should be raised incrementally. Maybe 15$ an hr in 8-10 years

To be clear that is pretty much the plan to get there over a 5 year period. No one is advocating going from $7.50 to $15 an hour to morrow

 

[HUBER]

To be clear that is pretty much the plan to get there over a 5 year period. No one is advocating going from $7.50 to $15 an hour to morrow

$15 Minimum Wage would absolutely destroy the job market and put further strain on middle and lower class Americans. Less jobs. Quicker Automation to reduce staff. Higher cost of goods. Small Businesses will close at a rapid rate and the ones that stay open will question the reasoning to grow their business with reduced profits.

Wages go up -> Cost of Goods Goes Up.
Wages go up -> Businesses Reduce jobs to remain profitable.
Wages go up -> Business incur more payroll taxes further reducing profits.
Wages go up -> Businesses who have robust benefits packages will look at reducing things like paid healthcare or funded 401K for their employees to keep profits up, and the result will hurt employees.

From the SBA: Almost 50 percent of businesses with 3-9 workers offer health insurance benefits to their employees. The ratio grows to 71 percent for firms with 10-24 employees, to 85 percent for firms with 25-49 employees, and to 99 percent for firms with 200 employees or more.

Businesses have to be profitable to stay open. I'm not talking about the enormous corporations that have CEOs making $20M a year. I'm talking about America's small business that employees half of its workforce (close to 50%.) Raising minimum wage to $15 has zero positive affects.

Minimum wage was never supposed to be a living income. Minimum wage is for people getting their start like I did at 16 -19 working for Kroger. Its for people who are starting out and work their way up into a profession.

As competitive as the current job market is, if someone is willing to work hard and learn a trade, they can make a living wage. There simply isn't enough qualified people out there, or people wanting to learn a trade. Electricians, plumbers, HVAC, auto body, technicians, and the list goes on and on. Get a job, learn a trade, and make a living wage.

Bagging groceries and flipping a burger at McDonalds isn't a trade.

-Seacrest out.

 

[buckethead1978]

Maybe a maximum wage is needed and it will push the prices of goods down, create more jobs, slow down the move to automation, and improve benefits packages.

 

[pitinoshairplugs]

Maybe a maximum wage is needed and it will push the prices of goods down, create more jobs, slow down the move to automation, and improve benefits packages.

Sarcasm, right?

 

[DaytonKat]

The problem wasn't they lacked a job, it was the jobs they had did not pay enough to keep pace with basic necessities of life. We've had the cost of everything skyrocket the last 20 years, while wages have largely been stagnant. I don't purport to have an answer to that issue, but it's definitely a problem.

Explain to me how come all the people around here who recently entered the country and are working their butts off seem to now be driving shiny trucks, wearing new clothes, etc.?

Why do I see so many new immigrants succeeding, but come on here to read that folks can't keep pace with basic necessities of life?

Can you put your finger on it?

 

[8titles_rivals270261]

Explain to me how come all the people around here who recently entered the country and are working their butts off seem to now be driving shiny trucks, wearing new clothes, etc.?

Why do I see so many new immigrants succeeding, but come on here to read that folks can keep pace with basic necessities of life?

Can you put your finger on it?

Because as usual, the government is trying to legislate to the outliers and not the population. Those you speak of want to get baked and either stay home and not do anything or work as a pizza maker at Papa John's and make a living.

 

[8titles_rivals270261]

To be clear that is pretty much the plan to get there over a 5 year period. No one is advocating going from $7.50 to $15 an hour to morrow

Still way outpaces inflation and will heavily impact small business. 500k or not the small businesses will be required to be competitive in pay or they won't get workers, so that whole "500k exemption" is just a way to appease those that are too lazy to think economically about how this will impact small business.

 

[pitinoshairplugs]

Still way outpaces inflation and will heavily impact small business. 500k or not the small businesses will be required to be competitive in pay or they won't get workers, so that whole "500k exemption" is just a way to appease those that are too lazy to think economically about how this will impact small business.

The $500,000 exemption is ignored by most states anyway when they put their own minimum wage law in place...

 

[Dore95]

The 500k gross sales threshold if for an employer to be a "covered employer" under the Fair Labor Standards Act (the national wage/hour law). But, employees can still be covered if they are engaged in interstate commerce and the standard for that to be met is extremely lenient.

The bottom line is that almost all employees are covered by the federal MW law, despite the 500k threshold.

 

[DSmith21]

A national minimum wage doesn't make a whole lot of sense to me. The cost of living varies a great deal between states and even more in urban vs rural. While $15/HR. might be reasonable in NYC or San Francisco, it's too high in the rural south and elsewhere. States and cities should set any minimum wages rather than the federal government, IMO.

BTW, $500,000 is not very much in sales for a mom and pop business. A single fast food restaurant will do between $500,000 (Subway) and $2,800,000 (Chick fil A). Those figures are probably low as I pulled them from a 2014 article.

https://www.forbes.com/sites/carolt...ns-that-rake-in-2m-per-store/?sh=7570303fff82

 

[MO_Blue]

I say it puts a lot of people out of work. Or keeps them there.

Yup. There are lots of ideas floating around right now that will do some serious damage to lower income workers. As domestic petroleum production gets cut, gas prices will rise, and have actually already started rising, with some predicting $2.50 to $3.00 by the end of this year (consumption is not predicted to fall, however, so the net environmental effect of new restrictions will be 0.0) . Open borders will put downward pressure on wages and upward pressure on the unemployment rate. The list goes on......

 

[Wildcats1st]

To be clear that is pretty much the plan to get there over a 5 year period. No one is advocating going from $7.50 to $15 an hour to morrow

5 years is too quick and arbitrary. You’re talking about doubling the minimum wage. In 5 years more it will be 30$ an hr?

 

[ukwildcat2004]

$15 minimum wage will be the end of small business as we know it. Wal mart and Amazon will survive but your basic goods and services will go up. But yeah its good for America.

 

[Hank Camacho]

Those idiots in California just tried this experiment again to tragically predictable results. Long Beach passed a local ordinance adding on $4 extra dollars an hour for "Hero Pay" for workers at grocery stores, etc. Kroger promptly shut down 25% of their stores in Long Beach and laid off the workers, ending up causing the worst of all results. People lost their jobs and groceries are harder to get for citizens of one of the states with the worst of lockdowns still going strong.

It would be funny if it wasn't so sad. So if anyone else wants an object lesson in exactly what happens when the government attempts to set market prices, take a good long gander and let me know how pro-worker you are.

https://fee.org/articles/local-kroger-stores-close-as-california-hero-pay-ordinance-backfires/

 

[DSmith21]

Those idiots in California just tried this experiment again to tragically predictable results. Long Beach passed a local ordinance adding on $4 extra dollars an hour for "Hero Pay" for workers at grocery stores, etc. Kroger promptly shut down 25% of their stores in Long Beach and laid off the workers, ending up causing the worst of all results. People lost their jobs and groceries are harder to get for citizens of one of the states with the worst of lockdowns still going strong.

It would be funny if it wasn't so sad. So if anyone else wants an object lesson in exactly what happens when the government attempts to set market prices, take a good long gander and let me know how pro-worker you are.

https://fee.org/articles/local-kroger-stores-close-as-california-hero-pay-ordinance-backfires/

The grocery business is a notoriously low margin business. If you dramatically increase labor costs (the largest expense for most stores) formerly breakeven stores become big losers. The dems don't seem to understand basic economics.

 

[jsmith4415]

The grocery business is a notoriously low margin business. If you dramatically increase labor costs (the largest expense for most stores) formerly breakeven stores become big losers. The dems don't seem to understand basic economics.

LOL dems concerned about economics.

“Ma’am we just like $100,000 last quarter.”

yeah but do you feel good?

“Other than stress yes I’m fine”

ok good what about your feelings on the trans community

“I mean they can do whatever they want I’m just worried about paying my bills”

ok as long as you’re not transphobic and welcoming to their community we’re ok

“Ok but what do I do?”

oh nothing. Btw minimum wage is $15. Don’t be racist.

 

[BMoore2]

How about just adjust minimum wage to inflation?

 

[Tskware]

I just learned in the paper today that the min wage was passed in 1938, has been raised something like 23 times, and lowered twice (who knew?), and all that time, each increase has not caused unemployment or inflation to move to any great extent, one way or the other, just has not had a catastrophic effect like some on here seem to believe will happen. One increase was from 40 cents an hour to 75 cents an hour, nearly doubled in one fell swoop, and amazingly enough, the country did not collapse.

But who knows, maybe "this time its different" (aka, the most dangerous words on Wall Street)

 

[ganner918_rivals60369]

Raising to $15 over 5 years would be equivalent to about $13.50 in today's dollars. That would be the highest minimum wage the US has had, but not by a large margin. In 1968 the minimum wage was $1.60, equivalent to ~$12 in today's dollars. If you wanted to set the minimum wage to be equal to the 1968 peak, you'd want to raise it to ~$13.50 over 5 years. I'd be willing to compromise down to that level, one we've experienced and know the US economy can bear, and index it to inflation to automatically raise every year or 2.

 

[Tskware]

Raising to $15 over 5 years would be equivalent to about $13.50 in today's dollars. That would be the highest minimum wage the US has had, but not by a large margin. In 1968 the minimum wage was $1.60, equivalent to ~$12 in today's dollars. If you wanted to set the minimum wage to be equal to the 1968 peak, you'd want to raise it to ~$13.50 over 5 years. I'd be willing to compromise down to that level, one we've experienced and know the US economy can bear, and index it to inflation to automatically raise every year or 2.

GD, you sound normal and rational and have some common sense. So why don't you run for Senate or House seat? Nah, a guy with your attitude wouldn't fit in at all.

 

[Deeeefense]

Still way outpaces inflation and will heavily impact small business. 500k or not the small businesses will be required to be competitive in pay or they won't get workers, so that whole "500k exemption" is just a way to appease those that are too lazy to think economically about how this will impact small business.

That's a good point regarding competition for workers, also lifting the bottom rung can also have an escalating effect on higher rungs. i.e. if a manager is being paid $15/hr, and supervises workers being paid $15/hr the company will almost assuredly have to raise the managers pay scale etc. Hopefully the $15 gets negotiated down to $10 - $11.