About minimum wage

[BrokenQuill92]

Does America actually have a legal minimum wage? Last I heard it didn't. Maybe I heard wrong.

Yes, we do: $7.25/hr per Federal law, with states welcome to impose a higher minimum but forbidden to go below it.

Guess I miscounted a quarter!

[vorlon13]

I worked for a bastard who didn't pay me. Had to sue, and when it was all done, I got money for materials only. I worked for free.

And it was legal.


So no, AFAIAC, there is no such thing as a minimum wage.

[Thumpalumpacus]

Yes, we do: $7.25/hr per Federal law, with states welcome to impose a higher minimum but forbidden to go below it.

Guess I miscounted a quarter!

That's $40/month, on a forty-hour workweek ... some schoolclothes for your kid, fresh vegetables instead of canned. These "little things" matter, when you're on that sort of budget.

[Sal]

There should be a maximum wage.

[The Grand Nudger]

I know exactly what it costs to run a truck. Actually scratch that, I know exactly what it costs to run a fleet of trucks. And I know exactly what we charge the customer to run trucks for them and I also have pretty good idea what our customers pay our competition for the same work so I know are prices are in line with current going market rates.

So as all the budding young accountants following along at home are now deducing, I therefore know how much of a profit margin we operate on.  So yeah, that means I'm pretty sure I know what I'm talking about when I say that if I suddenly have to pay my drivers $10 more per hour in order to keep them from leaving to go flip burgers or whatever, I am going to pass along as much of that extra $10 per hour to my customers as the market will allow. And if I know my competitors as well as I think I do, that means pretty much every bit of that extra $10 per hour goes right to our customers.

Every business operates on a profit margin so every business has the ability to absorb slight fluctuations in costs while keeping prices stable. But from where I'm sitting, I believe we'd be looking at double digit precent of increase in costs. So yeah I'm just not buying that any car company, or any other company is going to watch the cost to produce their product go up by 20% or more and just say well we'll keep prices the same and just be happy with making less profit.

Excellent, so then you understand that paying a driver 10 an hour, as opposed to 8 an hour.......wouldn't put you or anyone else out of fucking business, and wouldn't necessitate a price hike for the service. That would be a 20% increase from the -current- minimum (which I'm guessing is where your internal math went horribly awry, thinking about that 20% as a floating variable instead of applying it to the minimum wage).  In fact, I bet you pay your drivers better than the minimum, yeah?  A guy at subway in s fl makes the minimum wage, while a guy at subway here makes 10 an hour, while a guy at subway in michigan makes 12 an hour....and all of them sell the same 5 dollar footlongs.  That's not absorbing slight fluctuation, it's the franchise model, and the difference between the lowest paid and the highest is -greater- than 20%

No one said that companies would be happy if the minimum were raised, and they payed their labor the minimum.  I bet the franchisees in ann arbor are super jealous of the margin of franchisees in palmetto.  Nevertheless they're all making a margin...and when considering the minimum wage their happiness is an irrelevance. They'd be happy if they could get their labor for free. The truth of the matter, however, is that no ones going to pay 6 dollars for a 5 dollar footlong, regardless of the labor being paid the minimum, or 33% over it. So they can be as unhappy as they like, with being forced to pay the people who do the work that enriches them, I don't care, why should anyone care? OFC they'll eat the higher cost and -still- make a margin while providing the same product for the same price to the end consumer....they already do.

[The Grand Nudger]

-cont.

We the market, as in we the people already pay the difference between a minimum wage and a livable wage in welfare and subsidies.  So you and I are paying the portion of the wages that the franchisee in any given example above is pocketing as profit, that would be needed to raise them to the poverty ceiling.  How can we do this?  Taxation.  The more we allow those percentages to be withheld from the laborer, the more we have to pay into state and federal agencies to cover the difference.  In fact, that;s what we do...meanwhile, the franchisee gets to complain his way all the way to the bank.   The consumer is subsidizing his margins on both ends, we -are- paying the difference.

[johan]

Excellent, so then you understand that paying a driver 10 an hour, as opposed to 8 an hour.......wouldn't put you or anyone else out of fucking business, and wouldn't necessitate a price hike for the service.  

True, it would not necessitate a price hike the current market. 

That would be a 20% increase from the -current- minimum (which I'm guessing is where your internal math went horribly awry, thinking about that 20% as a floating variable instead of applying it to the minimum wage).  In fact, I bet you pay your drivers better than the minimum, yeah?

 Correct. I do pay above minimum and that's kind of my point. Finding driver applicants is hard. Very hard. Keeping them once you hire them them is even harder. So we pay currently pay about $10/hour above minimum which is about the going rate for our segment of the industry in the area we're in. My drivers don't work at Subway because they can make about $10/hour more working for me. IOW about $10/hour OVER minimum is where I have to be in order to keep drivers. 

So now let's say raise the minimum wage to a number that has been floated around often in these discussions. That number being $15/hour. How do I keep drivers when they can go do just about any entry level job anywhere and make about the same as I'm paying them? Obviously I'm going to have to increase what I pay them. And if minimum goes from $7.50/hour to $15/hour, paying my guys an extra $2/hour as you've suggested ain't gonna get it done. I sincerely believe I'm going to have to end up at $8-$10 more per hour in order to maintain the same driver base I have now. And an extra $10/hour in wages will most definitely impact prices to my customers.


Just about every bit of that $10 increase in wages in fact will go to our customers. Because lets not forget, I won't just be paying more for driver wages, I'll be paying more for everything. Diesel mechanics are going to need to be paid more too lest they just go get minimum wage jobs where they don't get so dirty for the same money they're making now. So the price of maintaining my fleet will go up. Tires will be more expensive. Road service calls will be more expensive. Towing will be more expensive. Replacement rental trucks will be more expensive. I've got to pay health insurance on my drivers and the cost of that will most definitely go up too. And we haven't even mentioned what could happen to the price of fuel yet. 

So yeah, even though we don't pay anyone minimum wage, almost every cost we currently have will most definitely go up and we will most definitely pass every one of those increases along to our customer. Nothing personal, its just business. 

 

The truth of the matter, however, is that no ones going to pay 6 dollars for a 5 dollar footlong, regardless of the labor being paid the minimum, or 33% over it.  

You sure about that? Subway did away the $5 footlong earlier this year and raised it to $6 and sales don't seem to be suffering any from what I can see.

[The Grand Nudger]

-and now they're selling at 6 at any subway franchise..whether it pays the minimum, or 33% over and above the minimum. They didn;t do away with it, btw, they limited the subs which were still 5$ to the shitty ones, lol. Bastards. As to competition, boohoo...but it;s not like this isn't already the case. Here, in my city, you can work for subway or work for a manufacturer like toyota and make the same wage. People decide for themselves whether they're more comfortable as subway sandwich artists or automotive assemblers. Most, choose to be assemblers. I'd rather be a driver than a burger flipper myself, even if all things were equal, which they aren't and wont be. Is this though, actually a legitimate gripe... even if it were true? That it might be hard to entice people to do work they don't want to do if work they did want to do was available...... I left a nice career in manufacturing, admittedly when it was tat a low point back in the midst of the recession, for a shit job digging holes in the ground....which I just so happened to enjoy. I'm sure my spot was filled with a quickness.

A 20% increase of the minimum wage isn;t going to make any of your drivers run off to a 10 dollar job....from their 17 dollar job...unless they just don't want to work for you or as a driver. Good riddance to that guy, right? He doesn't want to be there, you're not a warden, and there are people who do. No sense in paying a half-asser until he finally decides to quit. Help him, help himself. We've already seen that rungs of commerce below you can and do absrob even greater increases and still hit their margins. I;m not trying to school you on business or accounting ( I know I can't help but come off that way with these examples)...just showing you all the ways that the fear mongering surrounding raising the minimum wage is, itself, manufactured.

Now I, personally, question any model that can;t afford to pay a minimum wage, either at 7.25 or at 10 (which is a hefty % increase but not much in real terms.. 100x times jack shit is still jack shit). This is admittedly ideological.....but maybe, just maybe, they should close up shop and leave it to a model that can? Go do something that they're better at? We'll still end up covering a portion in welfare, in subsidy, because 10 is still at the poverty line.....but at least we'll be covering less, and less comes out of our pocketbooks....seeing as the labor consumer is paying more of it with their own proceeds garnered from the same. If a hike to 10 really -would- put McDonalds et al out of business, which it won't, I'm not sure I'd shed a tear over the sudden lack of obnoxious yellow arches in the landscape. Their employees are already on welfare. What;s the worst that could happen? All we'd have done is cut the corporate office off the welfare teet it's model depends on.

[johan]

Well it certainly seems like you've got it all figured out. How silly of me to think otherwise.

[The Grand Nudger]

-I- don't.... they do, they're the ones that can hit an acceptable margin on a 6 dollar sub regardless of whether they pay their employees 7.25 or 10, or 12 an hour.  That's the point.