Living wage

[Mister Agenda]

By which you inevitably, if not intentionally, mean: fuck their employees. Let 'em be unemployed. They shouldn't have been so careless as to fail to get the skills that would have found them employment in a company not based on employing the under-educated, under-experienced, or over-incarcerated.

If no consumer would want the service or product at the price resulting from every relavant business being required to pay a living wage, then the business should not exist.

In the logic biz, that is what is known as a mere assertion.
If you think social welfare (and other social costs) for underpaid employees is a burden society should not have to pay, wait until you see how much it is when they're unemployed.
I'm all for the experiment. Either it will work, which would be great (though personally very surprising to me), or we'll learn a lesson we apparently can learn no other way.

[The Grand Nudger]

What makes you think there's a difference in the cost of underemployment vs unemployment?  If all people make "half the floor" we cover the other half.  If half the people make the floor and the other half make nothing.........we cover the other half. Sure, sure, this ignores modifying variables.....such as our coverage, largely, not going to people but to the -businesses- that underemploy them in the first place (I'm looking at you walmart!)........as (already shitty)wages stagnate and profit margins increase...but hey, we're trying to do some simple math here. We -already- pay the cost of both underemployment and unemployment.....and it's a bill we're footing for organizations which are demonstrably capable, but unwilling, while profiting from this arrangement.

Is there really something objectionable in saying that an unprofitable business has no business being in business? Is there really something objectionable in saying that a business which cannot support a human life, which profits due to the impoverishment of it's employee(s), has no business being in business? Isn't this how business viability is judged in the first place? If it cost me more to grow an acre of tomatoes than I could pay myself, as the employee.......I'd put that money elsewhere. If the opportunity cost of an hour of labor was greater than the gross..........I'd put that hour of labor elsewhere. If an hour of labor netted me less than the value of a bond(or less than the collection of welfare to which I am entitled)...I'd go with the bond(welfare). You? I don't see the benefit, personally, in defending a poorly run business which squanders the productive means of those involved. Knowing that none of the businesses which are so commonly engaged in the impoverishment of their employees are -actually- toiling under any such burden (despite their constant protestations)........it seems kind of silly in the first place.

[Mister Agenda]

If everything works out nicely in 'halves' sure. No doubt it will be just like that, and the half who get nothing will be philosophical that at least the other half is getting more.

There's something objectionable about turning a profitable business into an unprofitable one that happens to rely on low-skilled labor into an unprofitable business with the stroke of a pen.

Business viablilty is determined by competitive success in the marketplace, any business can be put under if you make enough laws to handicap it. You're like a guy who shoots a horse, then blames it for not finishing the race.

There are millions of people who don't have a high school diploma, don't have work experience, have a criminal record, a problematic work record, or have some other disadvantage that currently makes it difficult to find employment at $8 an hour. Most of those who do will be making more money a year later, either from a raise or because they've found a better job (they now have a little work experience on their resume'). But they will have an even harder time finding employment at $10 an hour. And it's not little businesses like car washes and corner groceries that are going to drive most of the unemployment among these folks; it's the choices made by employers not to create new positions that can be filled by them or replace vacated positions. Most businesses can adapt to higher wages. Most unskilled workers will have more trouble adapting to getting the skills that would justify employing them at those wages without a job.

The community I volunteer in has enough trouble finding employment without being priced out of the labor market.

But it will be temporary. Thanks to inflation brought on by the wage hikes it won't be long before $15 an hour doesn't get you any more than $8 an hour used to, and all those folks will be as desireable for employment at $15 as they were at $8; but they still won't be any closer to being middle class than they were before. The work experience they missed in the meantime might have brought them closer to being middle class though.

Of course it could have been done in a way that didn't reduce their opportunities so much, but fuck them for not having been been born white and middle class and fuck the people who would have hired them, right?

[Aristocatt]

Not sure if I agree with the notion that increasing the minimum wage modestly will seriously increase unemployment. With regards to underemployment, I think paying people more to work less is desirable.

http://www.cepr.net/documents/publicatio...cation=ufi

This is the most comprehensive study I am aware of. Granted, CEPR is certainly a liberal think tank.

The notion that Small business owners would suffer disproportionately is an odd one too.
http://asbcouncil.org/sites/default/file...140709.pdf


My general opinion is that the standard model does not do a sufficient job explaining the many ways in which firms respond to wage hikes. With modest wage increases there are many different ways in which firms can and do respond to wage hikes, some of them undesirable, some of them desirable. However the most undesirable ones don't seem to happen on a massive scale, which is I imagine when they become unacceptable trade offs. That is, the issue with wage increases is not as much about the short term aggregate effects on demand or production, but instead in the long term distributional inefficiencies of the market. I don't think there is much risk in long term distributional inefficiencies when dealing with modest wage increases.

I agree that incremental wage increases and follow up impact assessments are the best way to go about wage increases. Extrapolating data of incremental increases and then using it to justify a 30% increase in wages, or a near doubling($15 an hour) of wages, could work, but it could also destroy the political will for wage hikes in the future.

I also agree that states are better prepared to make appropriate wage hikes than the nation. I do not think that many states that could and should be increasing their wages have the will to do so, however.

That being said, I would choose to increase minimum wage to $10/hour as opposed to no change at all. And would also choose to increase to $10/hour if I felt as though a small wage hike would give people the idea that the issue has been solved for the time being.

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But it will be temporary. Thanks to inflation brought on by the wage hikes it won't be long before $15 an hour doesn't get you any more than $8 an hour used to, and all those folks will be as desireable for employment at $15 as they were at $8; but they still won't be any closer to being middle class than they were before. The work experience they missed in the meantime might have brought them closer to being middle class though.

Inflation doesn't really offset wage hikes.  Not everyone gets a wage hike, and the increase in the cost of a good(presumably to offset profit margin reductions) has to be considered with the price elasticity of the product.  Also you need to account for the implicit wage compression that occurs when prices increase.  Basically all consumers absorb the shock of a price increase that is instituted to offset the wage hikes of some consumers.  This also implies that firms would respond to wage increases by only increasing prices to maintain the same profit margin.

[The Grand Nudger]

If everything works out nicely in 'halves' sure. No doubt it will be just like that, and the half who get nothing will be philosophical that at least the other half is getting more.

The half that gets nothing will get what the half that gets nothing -already- gets. Unemployment.

There's something objectionable about turning a profitable business into an unprofitable one that happens to rely on low-skilled labor into an unprofitable business with the stroke of a pen.

Really? More or less objectionable than a business that can be tanked simply by preventing employers from exploiting their employees, in your opinion?

Business viablilty is determined by competitive success in the marketplace, any business can be put under if you make enough laws to handicap it. You're like a guy who shoots a horse, then blames it for not finishing the race.

There are millions of people who don't have a high school diploma, don't have work experience, have a criminal record, a problematic work record, or have some other disadvantage that currently makes it difficult to find employment at $8 an hour. Most of those who do will be making more money a year later, either from a raise or because they've found a better job (they now have a little work experience on their resume'). But they will have an even harder time finding employment at $10 an hour. And it's not little businesses like car washes and corner groceries that are going to drive most of the unemployment among these folks; it's the choices made by employers not to create new positions that can be filled by them or replace vacated positions. Most businesses can adapt to higher wages. Most unskilled workers will have more trouble adapting to getting the skills that would justify employing them at those wages without a job.

Those millions of people -also- need a living wage.  

The community I volunteer in has enough trouble finding employment without being priced out of the labor market.

But it will be temporary. Thanks to inflation brought on by the wage hikes it won't be long before $15 an hour doesn't get you any more than $8 an hour used to, and all those folks will be as desireable for employment at $15 as they were at $8; but they still won't be any closer to being middle class than they were before. The work experience they missed in the meantime might have brought them closer to being middle class though.

Not -quite- the way it works, but sure, 15$ at a federal minimum could be worth relatively less than 15$ today.   No free lunches, and all that.

I just don't see subsidizing business interests for the sake of subsidizing business interests working out for us, past or present. It's all "competitive marketplace" - except that business is at the tit, while simultaneously leveraging our government to devalue a commodity they -all- require, labor. Not exactly my definition of competition. I get that some people think that it would be armageddon for business and profit, I just can't see how.

Using my example from earlier. Doubling wages paid to farm workers would mean that 30K lbs of tomatoes still only cost 6k USD to produce. Looks to me like there's quite a wide margin left....54k USD (doubled wages) vs 57k USD (current wages). If we payed farm workers -15$/hr-......theres still 42k USD left to fuck around with, all at 2$/lb. Even adjusting for increase in costs to producer -entirely-.......you're new minimum wage is going to buy you more tomatoes than the old minimum wage. It's certainly going to buy more than the 2.50$/hr average wage of immigrant labor (though, granted, that was illegal labor, legal labor was 6 dollars and change in the area I last managed tomatoes in - specialized workforce-). The price of tomatoes would have to go up -pretty high-...6x their current value....before it would even -break even- for those of us who are the worst off.

Six and change probably doesn't sound like a lot...but it is. The people who make that rate are extremely skilled - very quick, very gentle-. Most pickers make significantly less, but, due to the effect of outliers on averages..... Technically, if a picker falls below a certain amount you're required to pay him a minimum rate, the floor. Practically, you threaten to assign them to that floor right exclusively if they complain about a smaller piece rate payment (-this-, btw, entirely legal). They see other workers making more money than they do, it can be done, you have to get a good row (helps to be buddies /w the bossman) and so they genuinely -want- to be on the peice rate and absolutely will not complain about being payed a lesser amount than the floor. This is something that business can do(and this is only one example, from one type of business). This is it's toolkit, now, show me how Joe Citizen (or Migrant) competes /w that?