Federal Workers Min. Wage raised to $10.10
- Thread starter Mr.Sloth
- Start date
How about my post citing a study from the Congressional Budget Office saying:
1) Jobs will be lost due to the minimum wage hike
2) Poor people will only get 19% of the new money anyway
3) It will cause inflation
I think those are pretty valid points from an extremely reputable source, and the fact that I'm an asshole is irrelevant to the conversation.
1) Jobs will be lost due to the minimum wage hike
2) Poor people will only get 19% of the new money anyway
3) It will cause inflation
I think those are pretty valid points from an extremely reputable source, and the fact that I'm an asshole is irrelevant to the conversation.
AT-AT
Active member
current minimum wage = 7.25make minimum wage = 10.10
increase in pay = 2.85
2.85 / 7.25 = 39.31% increase in wage
or 40*52*(2.85) = $5,289 increase a year (assuming 40 hours a week)
as mentioned before this is not what it costs an employer, that it is usually around 150% of your pay.
1.5*5289 = $7933.5 increased cost to employer per year per full time minimum wage employee.
Say a small family grocery chain has 4 stores and 15 full time minimum wage employees per store
4*15 =60
60*7,933.5 = $476,010
or even a local hardward store that has 3 full time minimum wage employees
3*7,933.5 = $23,800.50
Just as company wouldn't be able to absorb an increase to 1000 dollars an hour, there are numerous businesses that would not be able to absorb the increase to $10.10.
increase in pay = 2.85
2.85 / 7.25 = 39.31% increase in wage
or 40*52*(2.85) = $5,289 increase a year (assuming 40 hours a week)
as mentioned before this is not what it costs an employer, that it is usually around 150% of your pay.
1.5*5289 = $7933.5 increased cost to employer per year per full time minimum wage employee.
Say a small family grocery chain has 4 stores and 15 full time minimum wage employees per store
4*15 =60
60*7,933.5 = $476,010
or even a local hardward store that has 3 full time minimum wage employees
3*7,933.5 = $23,800.50
Just as company wouldn't be able to absorb an increase to 1000 dollars an hour, there are numerous businesses that would not be able to absorb the increase to $10.10.
It sounds like your going to cherry pick an argument and find me a few small businesses that can't afford it, and if they can't they shouldn't be in business anyway, because they're not making profit. There are definitely valid reasons to not want to raise the minimum wage, However I think the pros outweigh the cons. That being said you're wrong on the thousand dollars an hour, and i no longer want to argue that. If you really believe that 10.10 and 1,000 will have the same effect then you're delusional, and don't know the value of money, and I'm no longer going to entertain you in this ridiculous argument. It's ridiculous to think That If you can rise the min wage to 10.10 you may as well make it 1,000.
Bill.Nye
Active member
Are you predicting that if the MW is raised to $10.10/hour the US economy will see 2 orders of magnitude inflation? Over what time period?
Predictions in science have to be specific enough to be proved right or wrong.
Also, can you show the work for your elasticity analysis.
Here's some scholarly information on the topic that might be relevant:
"Table 1 presents data on the wage costs of last three rounds of federal minimum wage increases: the 1990-91 increases (from $3.35 to $4.25); the 1996-97 increases (from $4.25 to $5.15); and the 2007- 2009 increases (from $5.15 to $7.25). Each of the annual increases in the statutory level of the minimum wage was in the range of about 10 percent per year (a low of 8.4 percent to a high of 13.6 percent – see column two). The average increase in the wage costs of affected workers, however, was in all cases smaller than the increase in the statutory rate, ranging from a low of 5.3 percent to a high of 9.4 percent (see next-to-last column). The lower average actual increase simply reflects that not all of the workers who receive a pay boost after a minimum-wage increase receive the full increase (because they are already earning something above the old federal minimum, but below the new federal minimum). Even more importantly, the total direct wage cost of each of these minimum-wage increases was tiny relative to the total wage bill paid by employers – consistently less than 0.1 percent of total wages paid. Relative to the wage costs of minimum-wage workers, the size of each recent minimum-wage increases was modest (between about 5 and 10 percent of total wage costs for minimum-wage workers).47 Relative to the total wage costs in the economy (that is including the wages of all employees, not just those earning the minimum wage), the wages costs of recent minimum-wage increases are very small.48
The size of these increases is directly relevant to the evaluation of possible channels of adjustment. For the typical minimum-wage increase, one or more of these alternative channels of adjustment – whether they are related to productivity increases, cuts in profits, reductions in earnings of higher earners, higher prices to consumers, or other mechanisms – must cope with what are relatively small total cost increases, when expressed as either a share of the total wages paid to minimum-wage workers or as a share of the total wages paid to all workers."
Skipping ahead:
"Employers may respond to a higher minimum wage by passing on the added costs to consumers in the form of higher prices. In a purely competitive economy, where all firms are experiencing the same increase in labor costs in response to a minimum-wage increase, economic theory predicts that at least a portion of the cost increase will be passed through to consumers.
Sara Lemos has conducted a comprehensive review of the 30 or so academic papers on the price effects of the minimum wage. She concludes: "Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%"; and "[t]he main policy recommendation deriving from such findings is that policy makers can use the minimum wage to increase the wages of the poor, without destroying too many jobs or causing too much inflation."63 Neumark and Wascher agree with Lemos's assessment about the likely price effects (while disagreeing with her conclusions about the overall usefulness of the minimum wage): "Both because of the relatively small share of production costs accounted for by minimum wage labor and because of the limited spillovers from a minimum wage increase to wages of other workers, the effect of a minimum wage increase on the overall price level is likely to be small."64 Other recent research by Daniel Aaronson, Eric French, and James MacDonald on restaurant pricing, a sector with a high share of low-wage workers suggests that the price effects are likely to be lower than the upper bounds suggested by Lemos. Aaronson, French, and MacDonald "find that a 10 percent increase in the minimum wage increases prices by roughly 0.7 percent.""
You can read the entire document here
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Predictions in science have to be specific enough to be proved right or wrong.
Also, can you show the work for your elasticity analysis.
Here's some scholarly information on the topic that might be relevant:
"Table 1 presents data on the wage costs of last three rounds of federal minimum wage increases: the 1990-91 increases (from $3.35 to $4.25); the 1996-97 increases (from $4.25 to $5.15); and the 2007- 2009 increases (from $5.15 to $7.25). Each of the annual increases in the statutory level of the minimum wage was in the range of about 10 percent per year (a low of 8.4 percent to a high of 13.6 percent – see column two). The average increase in the wage costs of affected workers, however, was in all cases smaller than the increase in the statutory rate, ranging from a low of 5.3 percent to a high of 9.4 percent (see next-to-last column). The lower average actual increase simply reflects that not all of the workers who receive a pay boost after a minimum-wage increase receive the full increase (because they are already earning something above the old federal minimum, but below the new federal minimum). Even more importantly, the total direct wage cost of each of these minimum-wage increases was tiny relative to the total wage bill paid by employers – consistently less than 0.1 percent of total wages paid. Relative to the wage costs of minimum-wage workers, the size of each recent minimum-wage increases was modest (between about 5 and 10 percent of total wage costs for minimum-wage workers).47 Relative to the total wage costs in the economy (that is including the wages of all employees, not just those earning the minimum wage), the wages costs of recent minimum-wage increases are very small.48
The size of these increases is directly relevant to the evaluation of possible channels of adjustment. For the typical minimum-wage increase, one or more of these alternative channels of adjustment – whether they are related to productivity increases, cuts in profits, reductions in earnings of higher earners, higher prices to consumers, or other mechanisms – must cope with what are relatively small total cost increases, when expressed as either a share of the total wages paid to minimum-wage workers or as a share of the total wages paid to all workers."
Skipping ahead:
"Employers may respond to a higher minimum wage by passing on the added costs to consumers in the form of higher prices. In a purely competitive economy, where all firms are experiencing the same increase in labor costs in response to a minimum-wage increase, economic theory predicts that at least a portion of the cost increase will be passed through to consumers.
Sara Lemos has conducted a comprehensive review of the 30 or so academic papers on the price effects of the minimum wage. She concludes: "Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%"; and "[t]he main policy recommendation deriving from such findings is that policy makers can use the minimum wage to increase the wages of the poor, without destroying too many jobs or causing too much inflation."63 Neumark and Wascher agree with Lemos's assessment about the likely price effects (while disagreeing with her conclusions about the overall usefulness of the minimum wage): "Both because of the relatively small share of production costs accounted for by minimum wage labor and because of the limited spillovers from a minimum wage increase to wages of other workers, the effect of a minimum wage increase on the overall price level is likely to be small."64 Other recent research by Daniel Aaronson, Eric French, and James MacDonald on restaurant pricing, a sector with a high share of low-wage workers suggests that the price effects are likely to be lower than the upper bounds suggested by Lemos. Aaronson, French, and MacDonald "find that a 10 percent increase in the minimum wage increases prices by roughly 0.7 percent.""
You can read the entire document here
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
DasGoatenshafter
Member
I still think its funny how that is still lower than the starting wage for students working for the ontario government. The student minimum I think is around 9 an hour, and starting working for ontario public service is like 10.25
quizbot
Member
NO ONE will EVER run a country so well everyone will be happy.
Mericans have it so good, if your stuck in a rut there is noone else to blame.
Cant get mad about a situation you either cant or choose not to control
Our spending/debt sucks but honestly We are not banding together to fix it at all.
We will just run this ship into the ground hopefully before global warming totally fucks us
Mericans have it so good, if your stuck in a rut there is noone else to blame.
Cant get mad about a situation you either cant or choose not to control
Our spending/debt sucks but honestly We are not banding together to fix it at all.
We will just run this ship into the ground hopefully before global warming totally fucks us
AT-AT
Active member
23,000 in profit coming from a small family run business is more than enough to end it. If an owner is bring home 60,000 from his business into his pocket at the end of the year and 23,000 is all of sudden gone, it is going to hurt. Same thing if it was 100,000. 100,000 to 77,000 is still going to hurt.
My aunt does over 1.5 million in sales in a small 10 person company, but at the end of the day she only takes home 70,000. The rest is running costs and re-investment into the company. She is always busy. (more than enough demand) but to ask her to drop even 30,000 out of 1.5 million hurts.
My aunt does over 1.5 million in sales in a small 10 person company, but at the end of the day she only takes home 70,000. The rest is running costs and re-investment into the company. She is always busy. (more than enough demand) but to ask her to drop even 30,000 out of 1.5 million hurts.
She did 1.5mil in sales and only takes home 70,000$ of that is profit? hahahahahaha haha ha sounds like the genes run in the family. First off I don't believe you, and second of all if that is true, (which it's not) she is not running her company she not doing it correctly if she's spending 1,430,000 on running costs and re-investment. She should hire a CEO who knows what he's doing, and use the extra profit to not pay her ten worker more than minimum wage.
.AR6rider.
Active member
That number does seem a little low, but you underestimate how much it costs to run a business.
For ten workers, no those margins are way too small, and I promise you there are cuts in production she can do to save money, unless it was something drastic along the lines of vertical integration of her product. But that would take a huge loan from a bank. You would have a very very very hard time getting a money from an investor with those numbers.
.AR6rider.
Active member
Did not read that part haha.
Well you are correct in saying that it can cost that much money, even if it's ten people. it can very easily cost even more and she could be in the red for the first 3 years. But the thing he stated is she's paying (all ten, some or maybe even one) minimum wage, and she can't afford the 10.10 an hour it would break her and she would take home nothing.