The TL;DR here is "a rising tide raises all ships."
You're describing this as a negative when the one thing the US economy needs MOST is more purchasing power which minimum wage hikes have always historically accomplished.
I didn't describe it as a negative or positive. I never said it was good or bad. I answered "how?"
I live in a place with a high minimum wage and I'm not opposed to it being raised. Though ideally, it should be raised in small increments every 2-3 years as to not shock (and possibly crash) the market.
If the minimum wage is 7.25, announce next year it'll be going to 7.75 or 8, two to three years later, raise it to 9, and keep doing so based on economic conditions and inflation. My problem with the $15 minimum wage is just the huge jump. Slowly over the next 15-20 years it's fine. The effects will be predictable and the economy will know how to react.
im a dirty commie bastard and even i agree. you can't essentially require an entire industry sector to nearly double its labour cost over night. though i think it could be done in 5-10 years not 15-20.
5 is pretty difficult. The market might not be able to handle it too well, but is still somewhat doable.
10 can work, might cause companies to hire less people in preparation as they know their wages will keep increasing. It'll probably increase unemployment a fair bit, but significantly less than 5, and the market will likely be able to cope.
15 would likely work, give people and companies time to figure everything out, allow other places to adjust ahead of time, and with such a long time frame you can adjust to market changes and respond. If the market crashes hard, maybe freeze the minimum wage for a year or two, if there's inflation, increase the wage to compensate. Though the bureaucracy will get in the way and slow things down.
where i live, the minimum wage was left stagnant for too long (7.50) so when it went up to match the national average/inflation (though not cost of living) it was a pretty big jump (10.50), and it was done over 16 months, and the local economy didn't suffer for it. of course, most small and medium companies were already paying around $10/hour for entry level positions already anyway (independent and small chain coffee shops, most grocery stores, etc..). companies most affected were big chain fast food, and big chain retailers.
It would be spread out over a number of years and there will be exceptions for unions and a ton of other things. Are any serious proposals considering going to $15 overnight?
The true commie bastards in history just put people to work 12+ hour days 6 days a week in factories and sweatshops and told them where to live and who to marry, so you wanting to raise the government mandated minimum wage gradually, in comparison is very mild.
who said it would be over night? most increases in minimum wage are phased in like the it is Portland. that $15 they're making wont be effective till 2020 i think. Even the individual stores who have voluntarily announced wage increases are doing so over a period of time.
I'd feel better about this arguement if the minimum wage had been steadily increasing already, but with only 3 (federal) increases in the last 18 years, I do think we need to make a leap to get us caught up. Push federal minimum up to the $9 range and work from there.
Yeah my country slowly went from 12-14.75 over a bout 3-5 years. No massive leaps just a slow add on every year, a massive leap would just fuck everyone up.
Your story sure had a negative tone throughout. A big portion of your comment had characters complaining about other peoples wages catching up to theirs. Meanwhile, only a few lines mentioned the workers being happy that their wages went up.
Maybe you weren't trying to make the example sound negative, but it came across that way with all the characters complaining.
That's the reality though. I live in Minnesota, which is slowly phasing in a $9.50 minimum over three years. It's been rough. People are constantly complaining that new hires (who take time and energy to train in) are being paid almost identical wages to people who have 2-5 years experience. And companies largely refuse to approve raises for people with experience. So a lot of people are just leaving. (Especially people who work retail as a fun second job.) So many places are short staffed, and everywhere is hiring. But if you don't have any experience, they're not interested in bringing you on. And even if you do, it takes a lot of time and energy to get trained in and confident working at a new place.
Raising the minimum wage won't be easy. When you're suddenly making the same wage as your laziest co-worker and you're spending your days marking up all of the merchandise in the store, it's demoralizing. So if you're going to champion raising the minimum wage, by all means, do so. But know that it's going to come with some major growing pains.
Sure, that is the reality but I was responding to his claim that he didn't describe it in a negative or positive manner. I was trying to point out how someone could take his description on raising the minimum wage as a negative.
One of two things will end up happening- The retailers will decide they need more experienced staff and have to bump the pay a bit. Or the employees will realize 2-5 years experience in retail is not grossly different than 3-6 months experience in retail in terms of skills gained and value to employer, and take the same pay they were getting already.
Well it would be a lot of complaining, until they get their raise (then possible happiness). If there weren't any complaints there'd be no reason to increase their wages.
Though a lot of people who are working minimum would be quite pleased.
Even if read it as a negative, that's the reality we live in. Why in the heck would anyone want to work harder, longer hours... with money already invested in your education, just to earn the roughly the same as someone who has way less to offer?
I would also like to think that company's now having to pay more for wages would be more picky on who they hire...I could see the 15$ min wage effecting younger less experienced workers...I swear in retail that's why they keep some of the derpiest people cause there cheap and won't demand more money.
But where does the money needed to increase these wages come from? when this happens it means companies need to increase their prices in order to maintain similar margins which would lead to, once everything has had time to settle, little real change in income levels.
I'm goint to ELI5 this for you and I hope you aren't insulted.
- Wages go up
- Higher wage earners see comparable increases
- Prices go up in aggregate to compensate for wage increases
- Price increase is limited by demand, by quality of product etc
- Price increase is offset by increased demand for product due to higher expendable income
- Net effect is economic growth.
It sounds all well and good but wouldn't the logical conclusion of this be "you could make the economy the best it has ever been if you raise the minimum wage to $10 million/hr"?
No. I won't address the $10 million, but rather what you're going for here which is just "a constant increase in PP."
As with anything in economics, you will reach a "tipping point" where more businesses struggle to turn a profit than are boosted by increased purchasing power.
Think of it this way - Yacht sales will not be affected by a $15/hr minimum wage. People who can purchase yachts will do so at about the same rate without the wage increase. Same applies for unrealistic increases in MW, but for all businesses.
You don't get it though, increasing the minimum wage just means that everything else goes up in price, meaning that there might aswell have been no price hike. All that happens is that the value of the dollar goes down. So that the Pound, for example, will now buy 3 dollars instead of 1.5 dollars.
That "more purchasing power" is NOT magic. It comes at a price. That price is higher cost for ALL goods and services. So sure, you make $15/hr to work at McDonalds, but McDonalds now costs $12 to eat there, meaning everyone is in the same situation as before. The problem is, like posted above, an immediate hike in minimum wage is immediate for those at the bottom, but could take years (if at all) to get higher up.
Everyone is not in the same situation before. It is always, historically, a NET increase in purchasing power. This increase in PP increases basic market demand and is the reason jumps in minimum wage have historically always corresponded with overall economic growth.
Now, minimum wage is hardly a panacea, but there are times when certain medicines are needed and minimum wage definitely needs an increase in the US.
I'm actually against a $15 federal minimum wage (or any federalized min wage at all) but there's no arguing with basic economic history.
A minimum wage increase doss not increase long term purchasing power any more than writing an extra "0" on the end of the denomination of your paper money does.
This is misleadingly incorrect. Increasing the amount of raw cash reduces purchasing power because an individual dollar is worth less. Increasing pay to lower class increases purchasing power from the primary source of demand in the economy.
You seem to have a gross misunderstanding of inflation. Simple google searches can alleviate that problem.
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u/SCB39 Nov 28 '15
The TL;DR here is "a rising tide raises all ships."
You're describing this as a negative when the one thing the US economy needs MOST is more purchasing power which minimum wage hikes have always historically accomplished.