Working for that minimum wage

[Kraken]

I don't think we have a thread for this.

The Democrats' plan to raise the minimum wage to $15 in the covid relief bill was shot down by the Senate parliamentarian, who ruled it out-of-bounds. So now they're kicking around another way to force it though that would comply with the rules. This strikes me as a bad idea, at least based on that article. But I don't think it belongs in a covid bill in the first place.

The minimum wage is a complicated subject. On one hand, it hasn't increased in 10 years. Raising it would lift millions of hourly workers out of poverty. But it would result in lost jobs or fewer hours for a lot of others. Economists disagree on the relative magnitude of those effects, but they're both real to some degree.

What's your take? Where do you fall on a spectrum of "There should be no federal minimum wage" to "The minimum wage should be raised to $15 and indexed to inflation"? Do you support Dem efforts to sneak it in thru the back door? Could they ever get 60 votes to do it the right way?

[Blackhawk]

My take is, "'this is way too complicated and involves way too much guesswork about the future for me to have any clue what the answer is."

It could be a disaster. It could be the answer to all of our problems. I don't think anyone knows which. It does seem like it might be smart to start small (not phase it in - that's taking away future options - start with something small.) Give a small boost - 10 or 11 bucks - and implement the COLA increase, which should have been there all along. Give that five years to simmer and conduct exhaustive studies on the impact. Then decide whether to take the next step.

The problem, of course, is that we have no idea what the government will look like in five years. The data could show benefits, but the people in power could still snuff it for political reasons.

[Jaymann]

The minimum wage should be raised to $15 and indexed to inflation.

This. And Dems need to overrule the parliamentarian and do it. Rs would not hesitate to do so if there was a vote to line their pockets.

On the plus side, California will do it without the feds.

[stimpy]

One of the problems I see with this is how is the guy who's currently making $15 going to feel when the guy making $11 is suddenly making as much as him? Not very good for morale, I'd think.

[Isgrimnur]

One of the problems I see with this is how is the guy who's currently making $15 going to feel when the guy making $11 is suddenly making as much as him? Not very good for morale, I'd think.

He either gets a raise or he looks for a new job.

[Jaymann]

One of the problems I see with this is how is the guy who's currently making $15 going to feel when the guy making $11 is suddenly making as much as him? Not very good for morale, I'd think.

He slaps his comrades on the back and orders a round of vodka.

[stimpy]

That's a great attitude to have. Good luck finding and keeping new employees after telling that to the workers that have been loyal and have worked hard to get what they make. Judging by Kasey Changs posts, it's a veritable smorgsabord of jobs just waiting out there!!!
I'm sure they wont have any problem that Joe Schmoe who has zero experience and was just hired is now making what it took me years to make

[malchior]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

[NickAragua]

Anecdotally, I haven't heard stories of large swaths MA businesses closing down or laying off workers because of raising the minimum wage, and we haven't really had a massive outflow of businesses to New Hampshire. I haven't really heard of Seattle becoming a wasteland, either. I do know that the prices of a burrito has gone up like $2 in MA since I started buying burritos. Which was like 15 years ago. I can afford it, but what about all those impoverished masses that now have to pay $8 for a burrito instead of $6? Terrible. But I think I can suck it up.

From a purely theoretical standpoint, if you employ a lot of minimum-wage workers (i.e. retail business) and suddenly have to give everyone a 2x pay raise, that means you have to use some combination of a) lay people off, b) pass the cost increases on to the customers, c) management/ownership takes a pay cut, d) cut benefits to bare minimum required by law or e) take advantage of accounting tricks and loopholes to not pay people ("they're independent contractors!" or "I'm putting you down for 20 hours but you have to work 40 or you're fired"). Or, I guess, close down if you're bad at the financial aspect of running a business. Theoretically, higher wages for large swaths of people mean they have more money to go to the random retail store, so some places may experience increased business.

Then, there's also the theoretical situation where, currently, someone has to hold down two jobs to support their family. With a 2x pay increase, that person can suddenly have just one job instead, so they can quit the second job, which works great both for them and the second employer, who now doesn't have to pay the extra guy.

But the reality is that places with higher minimum wage haven't become uninhabitable wastelands, so it's probably not that horrible. It hasn't exactly solved poverty, either, though, so it's not really a panacea. And I'm sure there's going to be the usual exemption for restaurant workers, farm workers and other people who work for tips.

As for the guy who used to be making $15 pushing papers suddenly making the same money as the guy stacking boxes? Sure, it sucks. But hey, now that guy stacking boxes doesn't have to work sixteen hours a day just to put food on the table and live in a cardboard box with four other people, so that's pretty nice. Until the cardboard box's owner figures out that he can now charge 2x rent. But that's a problem for later.

chart

What the hell, Texas. I thought it was the land of FREEDOM AND BUSINESS OPPORTUNITY. Get the hell out of here with that bullshit communist minimum wage crap that's higher than the federal minimum.

[Zarathud]

People need to be able to support their families. The cost of low wage work and poverty gets pushed off on others — government grants, food stamps, child credits, bankruptcy, etc.

The market can get away with paying too many workers a wage where both parents have to work to make ends meet.

Republicans talk about how Americans are hurting. But they don’t do much to help. Raising the minimum wage will help.

Not everyone, sure. But enough to make a net benefit and give dignity to work.

[stimpy]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

[malchior]

I have several problems with the policy. First is that $15 is arbitrary. I can't find any research that says that wage level is optimal. It was seemingly randomly plucked out of the air. In fact, this would be 25% above the highest level ever seen in adjusted dollars. It'd be applied nationwide without any cost of living indexing. That doesn't make much sense to me.

I do think the level should be re-evaluated as the chart shows the purchasing power at the bottom end has been in constant decline for 50 years. That has driven one our society's root cancers - financial inequality. Still we have to be careful that we don't cause more harm by choosing a level that is too high. For example, raise the wages too high and employers will become much more picky about employees and will ignore the ones with the least skills. In other words, it may end up building a gate to employment unintentionally that'll create an even more destitute underclass.

Edit: FWIW I've seen one survey of economists that overall indicated that $15 would be too high for the reason above and instead supported around a $10 minimum wage. Unfortunately it is $15 or bust so unless some miracle breakthrough happens the minimum wage won't be increased at all. Though it remains to be seen if a compromise in the middle with some of the populist Republicans is possible anyway. This might be an unsolvable problem in our broken politics at a national level.

[malchior]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

That isn't my viewpoint. It however is a reality.

[stimpy]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

That isn't my viewpoint. It however is a reality.

As a business owner, I strongly disagree.

[Daehawk]

CostCo has been paying $15 minimum and they just announced they are increasing it to $16. They mentioned employee loyalty.

[NickAragua]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

That isn't my viewpoint. It however is a reality.

As a business owner, I strongly disagree.

Sure, if you employ a small enough number of people that you know them personally, yeah. Now imagine whether the same is true for Amazon or Walmart.

[malchior]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

That isn't my viewpoint. It however is a reality.

As a business owner, I strongly disagree.

Great. Still it doesn't change that low wage employees have almost no leverage over employers across the economy. Otherwise, this wouldn't be a discussion.

[Zarathud]

It’s also a policy discussion entirely devoid of factual economic analysis. You have the camp of No for any reason. And you have the camp who has been fighting for change so long they’re impatient.

Neither side will listen to facts anymore. It’s about change and principles.

[malchior]

CostCo has been paying $15 minimum and they just announced they are increasing it to $16. They mentioned employee loyalty.

CostCo is a bit of an exception. They differentiate themselves from other big box stores using a strategy built around customer service. They achieve this through standardization to drive efficiencies, lower overhead, etc. They are however a tiny sliver of the economy. Most low wage jobs are low-skill manufacturing, food processing, food services, hospitality, etc. Businesses where the workers are essentially commoditized.

[stimpy]

You are acting like low-wage workers have any sort of leverage or their employer gives a damn if they are upset.

You sound quite Trumpian there....

That isn't my viewpoint. It however is a reality.

As a business owner, I strongly disagree.

Great. Still it doesn't change that low wage employees have almost no leverage over employers across the economy. Otherwise, this wouldn't be a discussion.

So within an hour they've gone from not having any leverage to having almost no leverage.
Progress!!!

[NickAragua]

As a business owner, I strongly disagree.

Actually, a relevant question. If you employ minimum-wage workers and one of them suddenly asks for 2x salary because he feels he shouldn't have to work two jobs just to live in a cardboard box with four other people, do you a) give him the money or b) laugh at him and show him the door.

Obviously, it's situational, but let's assume this is an average employee without any irreplaceable skills, and you won't have trouble finding a replacement (because, in this economy, you won't).

[Kraken]

Anecdotally, I haven't heard stories of large swaths MA businesses closing down or laying off workers because of raising the minimum wage, and we haven't really had a massive outflow of businesses to New Hampshire. I haven't really heard of Seattle becoming a wasteland, either.

This suggests the difference between a prevailing minimum wage and a federal minimum. Good luck hiring anyone for less than $15 in MA. Only the most marginal jobs, such as yard work, hotel maids, dish washers, etc. pay less than the prevailing wage. But we have states with marginal economies, too, where both wages and the cost of living are well below average. My very modest house in MA (1,100 sq ft 2 BR with a kitchen that hasn't been updated since the 1950s and a bathroom that you won't enjoy lingering in) is worth >$400,000. If it were in MI it would hover around $100k. In, say, WV or MS it's probably worth $75k or less. Given different income/expense scales, what's the role of a federal minimum? Does one-size-fits-all make sense? Should the bottom-tier states define the minimum? Should America have its very own domestic China?

[malchior]

So within an hour they've gone from not having any leverage to having almost no leverage.
Progress!!!

I mean I can imagine a world where every low wage worker walks off the job at once but we all know that won't happen.

[Jolor]

C-suites are making $10s and $100s of millions and we are somehow focused on how the people currently making $20/hour are going to feel slighted. Rise up and address the true inadequacy.

[stimpy]

As a business owner, I strongly disagree.

Actually, a relevant question. If you employ minimum-wage workers and one of them suddenly asks for 2x salary because he feels he shouldn't have to work two jobs just to live in a cardboard box with four other people, do you a) give him the money or b) laugh at him and show him the door.

Obviously, it's situational, but let's assume this is an average employee without any irreplaceable skills, and you won't have trouble finding a replacement (because, in this economy, you won't).

Neither.
I am just going to hand it to him?
No.
If he was willing to take on more responsibilities in order to earn it over time, I'd probably go for it and have in the past.
You give, I give.
If he didnt agree to that, it would be his choice to stay or go.
Btw, this happens way more than you think. Never had someone ask for 2x, but have had some ask for substantial bumps.
Surprising how few have the work ethic to try and earn it.
But it is always their choice.
I think the key is to stay ahead of the game and reward someone doing a good job, whether it is "officially" raise time or not.

[Zaxxon]

The minimum wage should be raised to $15 and indexed to inflation..

This, or we get to universal single-payer healthcare with zero premiums and deductible. And then still raise well past seven bucks and change. Since we can't do that in this country anytime soon, yeah. $15 sounds good.

Remember that we as a nation are so very, very fucked.

As someone else mentioned, maybe $15 isn't the right number. Maybe it's $14, or $16. Or $20. But it's sure as hell not $7.85. And since we are far too dysfunctional to actually analyze the economics and build a policy based on that, then implement it efficiently... We're going to have to go with a random-ish number that the Ds can ram through somehow, or it's not going to happen.

[stessier]

I'm in charge of filling a clean-ish room manufacturing position right now that involves working rotating 12 hour shifts but only requires a GED. It is only a 6 month temporary position but pays somewhere around $18. I had four temp agencies working for a month that found no one interested.

[Blackhawk]

Thinking about it, I will say this. It would affect us, and significantly. I don't make wages, so it wouldn't affect my income (disability.) Michelle, however, does. She makes above minimum wage, but will below what the increase would set it to. But we also follow a tight budget, and for a while until things stabilized, it would be really hard to follow that budget with prices jumping all over the place. I'd probably have to redo our entire budget to look at expenses as percentages of income rather than dollar amounts or I'd have no idea if we were spending too much or not. I'm sure in the end we'd end up with more resources overall, but it would be hard to tell for a while.

[Smoove_B]

Refusing to increase the minimum wage is essentially a subsidy to corporations that refuse to pay workers enough to live on.

In turn, workers use public benefits to make ends meet and taxpayers end up footing the bill.

I'm sick and tired of corporations claiming otherwise.

[Daehawk]

Surely everyone can admit that a single parent having to work two jobs to have a place to live and food on the table for a kid is just wrong in America?

[RunningMn9]

The problem with a federal minimum wage is that we aren’t a one size fits all country. $15 per hour in rural Kansas isn’t $15 per hour in Bergen County NJ.

Is there somewhere that has the data on how many people are actually trying to raise families on minimum wage income(s)?

I also think that it’s problematic to tie to inflation. The initial minimum wage in 1938 was $0.25 per hour. That adjusts to less than $4.50 per hour in today’s terms.

I think that the answer has to be more complex and comprehensive than a minimum wage. Dealing with the cost of healthcare and higher education would help a lot.

[Jaymann]

I started off working for minimum wage when it was $2.50 an hour, working 40 hours a week. By living frugally I could actually pay rent, buy food, drive a cheap insured car, feed some cats, and occasionally buy some music tapes, alcohol, drugs or books. Of course no health insurance. Those days are long gone, and I seriously doubt a single person could survive today on $15/hour.

[gbasden]

I started off working for minimum wage when it was $2.50 an hour, working 40 hours a week. By living frugally I could actually pay rent, buy food, drive a cheap insured car, feed some cats, and occasionally buy some music tapes, alcohol, drugs or books. Of course no health insurance. Those days are long gone, and I seriously doubt a single person could survive today on $15/hour.

At least according to the chart above, your $2.50 an hour was the equivalent of almost $11 an hour in todays dollars. Imagine trying to do that, but with a third less of each paycheck.

[dfs]

Surely everyone can admit that a single parent having to work two jobs to have a place to live and food on the table for a kid is just wrong in America?

I believe a significant portion of the folks against the minimum wage would state that becoming a single parent is a choice with consequences.

I think that the answer has to be more complex and comprehensive than a minimum wage. Dealing with the cost of healthcare and higher education would help a lot.

Cause Washington has done so well in handling those issues?

I've still not seen the red health care plan that our previous president promised would sail through congress and make all well with the world. Seriously if we can't begin to address real issues (and let's face it we can't) than grandstanding gestures like raising the minimum wage will have to substitute for actual governance.

I would like to see a way to force employer's to give out regular hours and pay a portion of health care for part time employees to do away with the 30 hour ceiling, but those type of concessions would be non-starters in Washington.

[Blackhawk]

Surely everyone can admit that a single parent having to work two jobs to have a place to live and food on the table for a kid is just wrong in America?

I believe a significant portion of the folks against the minimum wage would state that becoming a single parent is a choice with consequences.

"choice"

[Kraken]

I started off working for minimum wage when it was $2.50 an hour, working 40 hours a week. By living frugally I could actually pay rent, buy food, drive a cheap insured car, feed some cats, and occasionally buy some music tapes, alcohol, drugs or books. Of course no health insurance. Those days are long gone, and I seriously doubt a single person could survive today on $15/hour.

It was $1.85 when I got my first payroll job. Back then all full-time jobs came with 100% paid health insurance because it was so cheap that it was just expected. Nobody had ever heard of copays or deductibles.

[Grifman]

Refusing to increase the minimum wage is essentially a subsidy to corporations that refuse to pay workers enough to live on.

In turn, workers use public benefits to make ends meet and taxpayers end up footing the bill.

I'm sick and tired of corporations claiming otherwise.

This is my position. We subsidize many businesses because their employees use public benefits to fill the gap. This causes the true cost of the minimum wage to be hidden. I realize that some will lose jobs but with a higher minimum wage, the cost is no longer hidden, it's included in the unemployment rate, and we can work on reducing that. I also think that from a moral perspective, that if a person is working 40 hours a week, then they ought to be able to live on what they earn, rather than a combination of their wages plus whatever they can scrounge up from the government.

[malchior]

This is my position. We subsidize many businesses because their employees use public benefits to fill the gap. This causes the true cost of the minimum wage to be hidden. I realize that some will lose jobs but with a higher minimum wage, the cost is no longer hidden, it's included in the unemployment rate, and we can work on reducing that. I also think that from a moral perspective, that if a person is working 40 hours a week, then they ought to be able to live on what they earn, rather than a combination of their wages plus whatever they can scrounge up from the government.

This is how I see it. Government aid programs should be overflow for the downside of business cycles. A safety net. Not the ground floor.

[Smoove_B]

Just saw this article on CNBC about the minimum wage necessary for renters to live in 2-bedroom apartment, by state. It's...something.

A full-time worker in the U.S. needs to make $28.58 an hour, on average, to afford the rent on a modest two-bedroom apartment in their area. In California, Hawaii, Massachusetts and New York, full-time workers must earn more than $40 an hour to do so.

They'd have to be paid $61.31 an hour in San Francisco to afford a two-bedroom apartment rental, and $50.67 an hour in Boston, according to a new report by the National Low Income Housing Coalition.

In no state, county or city in the U.S. can a full-time worker earning the local minimum wage come up with the costs for a two-bedroom apartment, the NLIHC writes.

More than a third of U.S. households are renters.

[Blackhawk]

I hope my landlady doesn't see that. Apparently Indiana's fair market rent for my place is 250% of what I'm paying.

(Also, this is why I'm unable to move.)