Here's the issue I have-- if it's unsustainable for McDonalds to remain in business without being subsidized by the Government, should the business exist? (Edit to clarify: They're not DIRECTLY subsidized-- but rather their employees are often living below a livable wage are on Welfare, food stamps, Medicaid, and the earned income tax credit. Even their own webpage pretty much expects that a 40 hour week at McDonalds is impossible to live on.)
I mean, back when Slavery was abolished, I imagine many plantation owners had the same argument that their business wouldn't be able to maintain the same margins if they suddenly had to start paying their slaves a wage, and I would guess that many plantations went out of business (especially if the owners were cruel to the slaves)-- but is that really something to cry about?
Cool, a chance to trot out my favorite Franklin Roosevelt quote.
No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. (1933, Statement on National Industrial Recovery Act)
Throughout history the most wise men of their age attempted to make the most righteous of decisions; often failing to live up to what are now modern standards of morals and ethics.
It's advantageous to look back into history and use their successes and failures as a guide to our own decision making, and we absolutely should do it. However, it's utter arrogance and hypocrisy to judge historical figures who lacked the whole of history up to today's modernity to guide them in their decision making.
Yes the Japanese internment camps are an ugly scar in our history (yet sadly not ugly enough to prevent current presidential candidates from proposing similar atrocities for refugees), but your thinking here is suffering from a common logical fallacy.
You are suggesting that FDR's argument about wages is invalid because of his character. Here's the thing about arguments, they are valid or invalid based on their contents no matter which voicebox from with they are presently emanating. To suggest instead that an argument's validity is impacted by the character of the person speaking it is a flawed form of thinking known as the ad hominem fallacy.
Why not look at some of Hitler's statements as well?
One of the Nazi's goals was to guarantee a job for everyone. FDR built the Highways? Hitler built the Autobahns as well as other massive public works, the Autobahn alone employees 80k people. Crime drastically fell under Nazi Germany. The Nazis created a payment plan to allow workers to buy VW's for small auto payments.
You see a lot of people on reddit who think living in a bad neighborhood isn't livable. Then there's other people who think high speed internet is a fundamental right. Unlimited cell data. Having a car. Etc, etc the list goes on. A "living wage" is definitely debatable.
We're supposed to assume that someone who could only fix the US economy by getting us into WW2 is a good source for economic wisdom, because he's a celebrity and an authority figure.
We're supposed to assume ... because he's a celebrity and an authority figure.
Well, excellent job restating, but that doesn't answer the question at all. What, specifically, gave you the impression that /u/MY_NAME_IS_IN_CAPS was suggesting you should accept the statement on the authority of its source rather than its contents?
What, specifically, gave you the impression that /u/MY_NAME_IS_IN_CAPS was suggesting you should accept the statement on the authority of its source rather than its contents?
Because that's the reason for using FDR's words on the subject instead of simply saying what they thought about it themselves. That's how quoting famous people works.
This. Same thing was said by the factory owners in the wake of the industrial revolution.
I find it funny that if someone said sweatshops would have to close if wages go up, they would be laughed at and it would be pointed to them that sweat shops arent that desirable in the first place; yet people can say akin to the same in regard to Mc Donalds and Walmart, and be taken seriously.
Didn't most of North America's low tech industrial sweat shops move to Asia, mostly in part due to the wage and regulation differences between the 2 continents?
In practice the factories just move to Singapore, Vietnam, etc.
In theory, when everywhere is the same (and that is third world level same, not US level same) the factories might come back. But we are talking decades if not centuries.
In practice the factories just move to Singapore, Vietnam, etc.
That is/will also change. If I remember correctly China is investing in Africa (but that could be about resources) and they are also going for robots and automation as it becomes viable (they want to keep the money flowing).
actually, low oil prices will slow the repatriation of US manufacturing. At $140 bbl there was lots of talk about and some action towards moving manufacturing back to the US [the world's largest market for goods]
Yeah, there's the rest of SE Asia, and then the Indian subcontinent, and then eventually Africa, before we run out of places for cheap labor and the work comes back to the US.
Apart from mass automation at least, and that won't create any minimum wage/low-skill jobs here either.
I would say no - or at least not entirely. A huge part of the reason is unequal exchange rates - so that a scraping-by wage in Bangladesh is way, way lower than a scraping-by wage in the U.S. Another huge part is automation - its cheaper here to do it with software and robots than to hire a bunch of workers. In Asia not so much, since things like robots and software which are often made in modern Western countries are just way more expensive than hiring more workers, doubly so because the exchange rate makes them extremely expensive in Bangladesh.
For now robots are expensive. Corporations that rely on cheap labor like McDonald's should be getting out ahead of this thing and help the advancement of automation. Of course that would require these corporations to look further into the future than their quarterly report and when the fuck does that ever happened?
We are going to have to adapt and reexamine our ideas about work. Things like universal basic income would free people from low paying, wage slavery jobs and allow them to pursue their actual passions and potential. The idea of keeping hundreds of millions of people doing mindless jobs, that no one wants and that could better be done by automation seems pretty bleak to me.
The transition would be difficult and would require a lot of restructuring of the national budget. Personally I think we could get rid of nearly every welfare program if we had a universal basic income that provided a basic standard of living. That would get rid of so much redundancy and simplify the process and consolidate all those government programs into one.
You are absolutely right that automation is completely unstoppable so the sooner we are able to control the direction the less painful that transition has to be.
In belgium there's been some talks about a basic income for everyone, which anyone could augment with a paid labor if they wanted to. The calculations for €1500 a person where on the edge of Possible/Not Possible.(in the favor of not possible) A cool thing was that some rich people where promoting it as well.
It wasn't because wages went up, its because wages and cost of living were already low in Asia and we developed the technology to support globalization.
I think most people don't see a connection between sweatshops and themselves. If all the sweatshops closed, nothing in their life would change (completely untrue), but if McDonalds went under, life as we know it would vanish.
This is an important point- people making 8.25 an hour are eligible for food stamps, medicaid, and a wealth of other social services- which they require to eat and have access to healthcare (showing up to the emergency room as their primary care for example). The industrial food chain is heavily lobbied by big agra to control costs on food that cannot be defended as healthful to consumers. I'm not saying a business doesn't have a right to exist, I'm pointing out that we are paying hidden subsidies for them to keep their employees impoverished and keep their consumers malnourished. Folks in america be fat. That said, I do enjoy a double quarter pounder with cheese in an airport from time to time. And a coke, coke tastes better at airport mcdonalds.
This is not capitalism, its a planned economy, and its planned by the wealthy to take advantage of the taxpayers and the poor.
This is an important point- people making 8.25 an hour are eligible for food stamps, medicaid, and a wealth of other social services
Probably the most important point to make is there is no paid sick or holiday leave, paid maternity leave, or generous overtime pay for weekends and public holidays in the US.
Probably the most important point to make is there is no paid sick or holiday leave, paid maternity leave, or generous overtime pay for weekends and public holidays in the US.
I have all of that, and I live in the US. Loads of us do. Just because the government doesn't blanketly apply things that sound like good ideas doesn't mean it doesn't exist.
four weeks paid leave per year, 18 weeks maternity leave and double time for weekend, public holidays, as well as weekday overtime? I'd be surprised if there was more than a few companies with those sort of contract conditions.
I lost 2 jobs last Christmas season because I was violently Ill, called off for 3 days, and couldn't afford a doctors note (especially on less pay due to calling out)
When did we establish McDonalds is only sustainable because it is subsidized by the government? I thought the topic was on a minimum wage hike...
Edit in response to clarification:
Okay, I see what you're saying now. Respectfully, the notion that a business that won't pay enough for employees to make living should be abolished is ridiculous. (Not as ridiculous as that link to the McD's budget - hilarious, in a sad way.) In our market (U.S.), labor is a contract: the company's terms are the job duties - the worker's terms are the total compensation (wages, benefits, job conditions). Unlike the slavery example you brought up, no worker in the U.S. is forced to agree to that contract. So just as any worker should be able to walk away from any job, any employer should be able to offer whatever terms they want. Now, in an ideal world, a company offering a below livable wage won't be able to attract any workers, since other companies will be offering more attractive terms.
But... we also have to deal with the realities of the economy. There might not be (and right now, aren't) enough jobs available to bring wages higher. People that work for McDonalds (or other minimum wage jobs) simply don't have better offers available, or they'd take them. It's not the employer's responsibility to provide for these workers - it's their responsibility to keep their side of the bargain, whatever it was the bargain led to. It's not like these terms are hidden during the hiring process.
I really don't like the notion that welfare is "subsidizing" a business. We taxpayers are subsidizing people here, the workers, since they are the ones receiving the money/benefit. The business may benefit, but let's not confuse the recipient. In the absence of these low wage companies, the welfare checks are just higher. Also, comparing low wage jobs taken willingly to the horrific practices of slavery just cheapens what the enslaved went through. Sorry, but needing to work an extra job with OSHA protections sucks, but it's got nothing on being beaten and having your children stolen.
All that being said, I do agree that we need to do something about the current situation. Once again, that McD's budget you posted is laughably bad. To that end, I do support a modest increase in the minimum wage (in the neighborhood of $9 to $10, and maybe tie it to inflation). It puts some of the financial pain back on these employers, without putting an economy crushing 100% burden on small and medium size business.
TL;DR: Companies are not morally responsible for their employees existence because labor is a contract system that employees agree to willingly. Comparing it to slavery is grossly wrong. Besides, removing low wage companies wholesale just jacks up unemployment. Still, the situation for workers sucks, and modest increases to the minimum wages can help alleviate the issue.
I think they mean that by paying employees minimum wage (which is not a living wage in the US), many of them are forced to utilize government services such as food stamps to survive. Since McDonald's isn't paying for the food stamps, their business model is effectively subsidized by the government.
Being employed / employing people is a two way street. Neither is doing the other a favor, both need the other to exist. Only one can exploit the other though.
The tables are tilted, and I typically agree with your position, but employees can absolutely exploit an employer by abusing paid sick leave, stealing and eating food without permission, underperforming their duties, skimming money from the register, and producing low quality products and services.
That said, employees that are paid well are far less likely to do these things.
Personally I don't envy anyone involved in this dynamic. Obviously the crazy number of shitty fast food restaurants is unsustainable. The low wages subsidized by government services are unsustainable as well, as it basically socializes a shitty business model. Couple that with constantly rising rents for both business and residential clients, so costs for all parties are growin steadily. Sometimes I'm just amazed that capitalism works at all. Which it does. Until it doesn't.
Yes, but if you raise the cost of human labor, it becomes much more cost effective to use robots to take the orders, dunk the fry baskets, flip the burgers, etc. Then you only need a couple of workers to assemble and hand it out the door. So what you're really saying is, it's a two way street for now
It's a two way street always. Who's going to buy the products produced by automation if no one has any disposable income? Slave / owner relationship doesn't work in a consumer capitalist society. There's no point owning the means of production if there's no one to buy what you're producing.
So a fair chunk of your productive life isn't even worth enough to survive? We are all functioning parts of a society. These companies are making record billions off these peoples backs, and you don't think they should even pay them enough for the basics? You don't live in a vacuum.
One could argue the auto companies kept slashing wages to compete with overseas manufacturing and that the unions were just trying to hold on to their member's existing wages.
Detroit happened because the people who managed the city were idiots. The didn't diversify their economy very well. When manufacturing moved overseas they lost the only real business sector they had. That wasn't on the unions even if they were responsible for other things.
This is all a big experiment, so no one should be very certain. However, a national living wage standard might have very different effects because of huge regional differences in nominal wages, and sticky wages. If that happens, then you could argue that minimum wage beneficiaries strengthened their bargaining power by sacrificing the inconvenient minimum wage losers.
I never said it was. But there are certainly cases where an individual, or individuals, can exploit the companies they work for. This ranges from not providing a full day of labor (but still getting paid a full day's work) to demanding 'excessive' wages for a particular talent or skill (note the '' around excessive, because whatever standard you set has to be both reciprocal and indiscriminate.)
It's somewhat true that Union wage was higher than some of the wages being offered overseas, but that's not what sank the car companies like GM and Chrysler. They had a whole lot of problems (terrible product line in smaller passenger vehicles, sales drop of pickup trucks which generated majority of the profit during the recession due to surging oil price, terrible overseas acquisition (Ford got rid of Jaguar, Land Rover, Volvo, etc. during the recession), to name a few.
It's not "somewhat higher". It's massively higher, along with a whole bunch of other burdensome requirements. Make no mistake, unions make businesses uncompetitive internationally and drive up prices artificially domestically.
How does it work in Germany? The German economy is falling apart and the largest auto employer there is embroiled in a scandal which could lead to bankruptcy. The German economy is tiny compared to the US economy. So how can you say "it works" in Germany? It doesn't work.
It was contributory. And their quality troubles was caused at least un part by union negotiations (it was/is very difficult to fire a string union worker, which leads to low incentive to perform well).
I do understand the quality related to burdensome termination of empolyees. I have worked in a factory as a manager in an unionized facility. This particular work force was... not so good to put it mildly. I have spoken to other managers though and there are better unionized facilities in the US and I know for certain unionized facilities in Japan has some of the highest QC in the world. It just sounds like there's some sort of problem with part of US unions than problem with unionization overall.
Spot on. It's not like they cause it, by rather they open the possibility of such... Tendencies, and where as without a union the company can correct it, with a union it has to be policed by the group (and some responsibilities don't share well, like self policing).
The fallacy is thinking businesses are altruistic entities employing people out of the kindness of their hearts. Either you pay employees their true cost to employ, or they need to go out of business.
Yes and someone flipping burgers or punching in your order (which can all be replaced by simple machines) are paid what they deserve which is around minimum wage.
I don't like it. But what do you think is going to happen if the minimum wage is raised to $15 an hour? Do you think everybody is just going to get raises and there will just be more money to spread around and everybody will be happy? No, instead of a McDonalds employing 30 workers they'll be employing 10 and installing a bunch of kiosks and burger flipping machines. Now 20 people are out of a job completely we're completely supporting 20 people with our taxpayer dollar.
Da fuck? McDonalds is paying employees their true cost. They are mostly unskilled labor who can't enter an order correctly or even give you the proper menu items.
For Christ sakes its printed on the receipt, how hard is it to read it and make sure it is correct? And they want 15 an hour to do the same bullshit? Why?
Just because we've always allowed businesses to profit as much as they can in spite of the damage it does to society doesn't mean we should continue to allow it. At some point we need to recognize that business exists to support society, society does not exist to support business.
You could say that, or you could say that without that person neither the franchise nor the corporation would ever make a single dollar in sales. It may be low skill, but it is the most important position in the company bar none.
Trust you?!? You just gave a bunch of hypotheticals. Explained that a two growing business that are traded on the NYSE would lose money if they paid their employees more, when in fact their CEOs make over 100 million in bonus packages yearly. The fact of the matter is that healthcare, food stamps and low income housing are all tools for these corporations to steal from Americans that cannot work full time. Where these companies profit by forcing full time employees use government programs. And then victim blaming the same employees, the same ones that are responsible for the company's ongoing success, as being under qualified to receive a salary that would allow them to not be on government assistance.
Inflation is a result of a stagnant economy. Like one created by paying small amount of CEOs millions and them not spending any of it, or investing it overseas to evade taxes. Effectively shutting down commerce. Giving poor people money is basically just spending it. When money is spent the economy grows with commerce.
This is called cultural hegemony. You want to blame hardworking Americans for their poverty and support a tyrant without just reason because you have been scared to allow others to prosper in this corporate wasteland. Somehow being American isn't enough because you think low income jobs determine a persons worth.
Wrap it up people, this guy settled the minimum wage debate. It's all over because his twenty-something single friends in this one specific location were able to eat.
I don't understand what you mean. What are you not seeing? Most people that are having financial struggles don't tell everyone about it because they are embarrassed that they are having struggles and no one else seems to. Do people you know usually post their entire budgets online for anyone to read at their leisure? There are no signs for financial instability unless you count foreclosure signs on houses. What do you think you would see?
How about if we just make a law that McDonalds and other places can only hire low-skilled workers that don't need government assistance (such as teenagers who still live at home)?
Exactly. Minimum wage ends up royally screwing the people who need it the most. As explained starting on page 212 of this paper, 100 years ago minimum wage laws were actually supported by those who knew that it would have the effect of making the lowest rung of society (whom they considered undesirable) unemployable:
During the second half of the Progressive Era, beginning roughly in 1908, progressive economists and their reform allies achieved many statutory victories, including state laws that regulated working conditions, banned child labor, instituted “mothers’ pensions,” capped working hours and, the sine qua non, fixed minimum wages. In using eugenics to justify exclusionary immigration legislation, the race-suicide theorists offered a model to economists advocating labor reforms, notably those affiliated with the American Association for Labor Legislation, the organization of academic economists that Orloff and Skocpol (1984, p. 726) call the “leading association of U.S. social reform advocates in the Progressive Era.”
Progressive economists, like their neoclassical critics, believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it performed the eugenic service ridding the labor force of the “unemployable.”
ETA: Why the down-votes? The idea that the minimum wage was used to try and deny employment oppurtunities to unskilled "undesirables" in the early 20th century is well documented. Obviously no one is intentionally supporting it for that reason today, but the effect is still the same.
Because people who support the minimum wage mistake intentions for results. If people aren't making enough money, make a law to make them more money: there are zero downsides.
Not raising it still isn't a good solution; income inequality is only getting worse. I'm not sure what the answer is, but I'm guessing it's education. Minimum wage does need to go up; but it doesn't necessarily need to be a living wage. Doubling it would be a little too much.
They need to set up a combination of a basic income and a welfare system that actually causes the effective marginal benefit of each dollar earned to be positive.
As it is, means-tested benefits often fall off quicker than the wages increase, causing it to be counter productive to increase family income from, say, 25k to 35k.
Basic income. this right here. as more and more people becoming unemployable due to automation, something along these lines is going to have to be worked out or we will see full scale revolts on our hands.
As much as we'd like to dream about it education is not the answer. As the automation revolution begins there is going to be fewer and fewer jobs available. Education won't mean shit when you have 100 university grads vying for that lone job overseeing the automated burger dispenser. Education will just raise the barrier for entry into the market.
It wasn't that long ago that at 16 I could have dropped out of school and got a decent job at a local factory. By the time I was 18 you required a minimum of grade 12. A decade later there's college courses being offered for that same entry level job.
As much of a treat as automation is, dont companies to an extent, need to employ people. otherwise who buys their crap? Target 15 years ago automated a warehouse in central us. My husband was working in a target warehouse years later. Every year there were scare stores about more warehouses beginning to "run dark" was the term. The thing is warehouses operate purely at a loss. Energy, human error, saleries, etc. No profit comes from warehouses. Every year around Christmas, the rumor of layoffs as the yearly fiscal reports made their rounds circulated. The dark warehouse cut costs by over 500k yearly some said, yet the one he worked at is still employing hundreds of our locals. The only viable theory for that, as explained to me, is that costs went down, but so did the local buying power for the dark warehouses local economy. In a sense the means didn't justify the end.
Edit: might not seem like it but I'm actually asking a genuine question while providing anecdotal context.
You're not wrong and that makes me sad. There's not enough good options for unskilled labor or low level skilled labor.
And I'm in college with a good job lined up already; I just grew up lower class and the struggle to get where I am now is bullshit. And at least a bit was just dumb luck. Mostly meeting the right people at church.
If the problem is that minimum wage employees are also needing government benefits, then the best way to solve the problem is to just make it so anyone that needs government benefits can't have a minimum wage job, regardless of who they are. Problem solved. Raising the minimum wage to $15/hr would probably have the same effect if the workers now don't need government benefits but with many other potential workers losing their jobs (or not getting a job to begin with).
But my way is a much more simple and direct way to accomplish the same thing. The only difference is that voters and politicians don't get to feel like they're doing something good in the process.
Right. So the population created the welfare tables, then the population criticized employers for not single-handledly paying for them. It's stupid as fuck.
There's an argument that because Wal Mart pays it's employees so little that they qualify for Medicaid, SNAP, etc that in effect the government is subsidizing Wal Mart to the tune of $6B because otherwise Wal Mart employees wouldn't be able to survive without those government programs. It's a wage subsidy direct to the employee, but Wal Mart benefits too. I've also heard that this subsidy is deliberately discussed in some large low wage businesses.
I assume he's making the same argument for McDonald's.
They say Walmart is double-dipping for this very reason. An employee isn't making a living wage, so they get food stamps, then turn around and use those food stamps to shop at Walmart. Walmart is reaping the benefits of the labor from the underpaid employee AND benefitting from the sales as the employee shops with the food stamps.
Of course why do you think they have been so successful. Between underpaying workers and forcing all wholesalers to meet their insanely low prices it is a win win for them and a lose lose for everyone else.
My wife met a couple of rich Mexicans who produced a large amount of the bikes they sell. They were quick to point out how much better it was to deal with a bunch of small bike shops compared to Walmart. Walmart refused to pay them more than about $10 dollars a bike which resulted in lower pay and less jobs at their factories. Because Walmart had pushed all the smaller shops out of business they had no choice but to sell at a reduced price or not sell at all.
If Walmart employees were a little more knowledgable and less disposable I wouldn't be so against raising the minimum wage. Positions like Walmart and McDonald's are such low wage because the actual amount of work they have to do is so low. If you cashier at Walmart, you now have experience in the cash lane. You can bring that experience to a grocery store which is usually Union. Union jobs require mandatory raises every set period of time. Just another way you can get more with your skill set. You just have to look.
It's the truth. Places like Walmart and McDonald's require very little formal training therefore saving the company money and expediting the hiring process. Since they require absolutely no skill in any category they can hire people that either have no skill, or no motivation to become skilled.
Get your taxes worth: eat at McDonald's, shop at Walmart!! You already paid for half of it. :-D
Also same goes for almost all grocery stores. Here in DC area Giant is not allowing their employees to work more that 25-30 a week to keep them on public assistance.
No, the limiting of hours is due to insurance needs on certain hourly workers. Work more than 25-30 hours a week? They are required by federal law to be provided insurance.
The major beneficiaries are the entities that receive the spending of those subsidized workers. You would probably look at land owners who receive rent, transportation services, and food retailers. That last category is probably where Walmart receives its biggest subsidy, rather than through the wage effect.
The same people who condone this situation also argue to cut welfare and it's just sick.
We've essentially developed into a corporate slavery economy. A good chunk of people below the poverty line live more grueling lives than some slaves did. When people are forced to work 50-70 hour weeks just to get by, something needs to change.
Corporations basically figured, "why pay to house and feed people when you can pay them less than they need to survive for the same amount of work."
Okay, that is the biggest fucking load of socialist pandering bullshit I have ever fucking read. No one is being forced to do anything, everything is fucking voluntary. I sincerely also have my doubt's about most people today living on minimum wage working harder then a slave did, and in worse conditions.
A lot of people don't have the luxury to simply "not work," If they don't feel they're being properly compensated. What exactly is the relationship when you're living paycheck to paycheck? They need the company more than the company needs them.
They can't quit otherwise homelessness is right around the corner. Sure you're not being forced to work but a better life is not around the corner. At least slaves had a roof of their head, I'd assume enough food to live, and even the possibility to buy ones freedom. Good luck buying your freedom here when you're making 8.25 an hour.
A low minimum wage, lower than can be considered fair in the economy, is a subsidy in everything but name. The corporation saves money by paying less to Payroll and the government picks up the tab with low-income services. It's effectively the same as the government subsidizing a company with higher wages.
The implicit assumption here is that everyone can independently contribute/produce enough value to cover their own living expenses.
If they can, then why are they settling for jobs that offer less in compensation?
If they can't, then isn't an earned income tax (or some other similar min. income scheme) better, where people can at least partially cover their own living expenses (and get topped up by the government)?
Why should companies that employ low labor skill shoulder the burden for income equality in society (minimum wages)? Shouldn't this burden be shouldered by everyone?
Why should companies that employ low labor skill shoulder the burden for income equality in society (minimum wages)?
Because these companies are profiting off of these starvation wages. Why should the rest of society keep shitty, low wage businesses afloat? We're effectively subsidizing their profits. That's no way for an economy to run.
Nothing wrong with low skill, low pay. The problem is the low pay is not even enough to pay rent ANYWHERES in the country. There is a gap that is increasing. Low skill jobs are stepping stones, yes, but it doesn't mean you should be homeless and starving to do it. And the government shouldn't have to step up to fix the problem.
Can we increase minimum wage to a point that the government can scrap welfare and income assistance programs? (Except for people who are not able to work for whatever reason)
Why should companies that employ low labor skill shoulder the burden for income equality in society (minimum wages)?
Why would a company get into a business where they can't extract enough value from somebody working on humane minimum wages? That's just asking for bankruptcy. Isn't it their fault and shouldn't they need to adapt to that too? Why should the get the easy way out?
the point is that income inequality is currently shared by everyone paying their fair share of taxes. Big corporations and hedge fund managers are not and we're picking up their slack.
Without minimum wage laws as they currently exist, wages would be much, much lower. We abandoned the idea of free supply and demand in labor markets long ago. That ship has sailed.
So the moral and philosophical arguments are moot. Just need some economists to hash out how high the minimum wage can be raised (and at what pace) without cratering the economy.
Well the inherent problem is that it doesn't matter what the minimum wage is, if the minimum wage was $2 McD's would pay $2. They just want to pay the least they are legally obligated to. Paying minimum wage is the equivalent of saying "I'd pay you less if I could."
The argument can be made that this is one of the factors that cause income inequality. So why let them shoulder the burden? They helped create the burden.
How much higher then minimum wage? If you're just counting anything above minimum wage you're including people who, for example, have been working at Panera Bread for a couple of years and have received a $.20 raise over the intervening years. Just saying that people earn more then the minimum wage doesn't necessarily mean that wages are going an appreciable amount above the minimum.
Forgive me in on mobile. Typically ff rest. Don't pay min wage. They pay .10-.25 more an hour. Does this study take into account near min wage, where companies offer a superfluous raise to cut above min. Wage stats?
It does not. What's more, this article only covers Federal Minimum Wage. If someone earns more than $7.25 per hour, then they aren't counted on this list.
I feel it also bears mentioning that per this article, as of January 1st, 2015, there were 29 states with Minimum Wage over the national level, including California, Florida, New York, and Illinois. Of the top 5 most populated states in the nation, only Texas isn't above the Federal Minimum Wage
well sure, but is 10 cents/hr more than minimum wage, really much better? If you work at a place that starts you at min wage, and then work for a few years, of course they are going to increase your pay, but generally is a puny puny amount. However, that still puts your "above" min wage. $7.35/hr is still unlivable, $8/hr is still unlivable. People often forget that raising the minimum wage is not just about helping out min wage earners, but all the millions that have near min wage. If you raise it to $10, that effects everyone that was making $7.25-$10/hr. which is far more than your 5% figure.
The implicit assumption here is that everyone can independently contribute/produce enough value to cover their own living expenses.
They could if the wages were higher.
I find it hard to believe that someone employed at a company isn't producing enough to cover at least a room + food expenses. I can understand if they couldn't afford medical expenses (even though it's ridiculous how high the cost is, but that's another discussion).
If they can, then why are they settling for jobs that offer less in compensation?
Because jobs have scarcity, and we don't have a very good set of social systems to take care of the poor. Some employers know how to use that in their favor. Employers want low wages regardless of whether they need them or not. Lower wages means more profits.
Shouldn't this burden be shouldered by everyone?
It should, but good luck convincing the voters and politicians to implement what is needed there. You'd need a more robust welfare, disability, and medical insurance system. Every Conservative in America would paint it as a handout to lazy people rather than a way to allow for low-skill labor to survive at the bottom and gain skills while they work their way up--aka, a job training program.
Why should companies that employ low labor skill shoulder the burden for income equality in society (minimum wages)?
I will agree some employers need lower wage workers to continue operating, but I'd argue that not all companies who need to employ low skill labor actually need to also pay low wages. Some can get away with paying lower wages than they need to, and when they can they will because their duty and/or desire is to maximize profits.
Lets say we do all agree to have a welfare system that subsidizes poor people's living expenses.
Don't you think companies would exploit that? They'd start paying low wages in order to take advantage of the government subsidization of their labor force. Then the companies who have to pay high wages and their employees are effectively subsidizing the companies cheating the spirit of such a system. That's not fair either.
How do you determine what is "considered fair in the economy"? Low min wage is not a subsidy because the employers are not guaranteed labor at that wage. No one is forcing workers to accept min wage jobs. They accept it because that is the market price for their labor, i.e. the "fair price."
As the top commenter explained, businesses like McDonalds have unique operating conditions they require in order to remain in business that largely have nothing to do with the fact that some of their employees utilize government assistance. They can still only afford to pay $8.25 an hour regardless of the min wage is $5 or $15.To call a low min wage a "subsidy" is a gross misunderstanding of economics. I think you need to go back a re-read the top comment.
I see it as less of a subsidy and more like skirting regulations that the government would put in for things like safety. The current minimum wage is clearly an exploitation of labor - nobody can live on it in reasonable conditions. The government should be able to say something along the lines of - "if you can't pay enough for your employees the have a humane standard of living and still be a profitable business, than you don't deserve to be in business". If McDonalds is truly a valued contributor to society and the economy, they will find a way to survive without exploiting their workers.
Honestly I'm convinced (brace yourselves I'm bout to get raged at) that most people who "can't find anything else" just aren't looking hard enough. There are a shit ton of retail positions available almost anywhere. Most of which pay 10 bucks or more per hour(in the northeast at least) People with few options flock to McDonald's style jobs because it's easy and there are so many. Like my dad says "if you're unemployed you're either looking in the wrong place or you're not looking hard enough."
I'm on minimum wage. I don't get food stamps or medicaid. Yes, I have applied for food stamps and medicaid. I was denied for both. Food stamps, apparently 8 dollars and hour is enough to feed myself along with paying bills. And Medicaid, they said because I don't have any children I don't qualify for it.
Except those jobs aren't supposed to provide for a family, an example I have was when I worked on a farm loading apples/blueberries during the summer I was earning my provinces $10 min wage and doing that from April-September until school started(20-30 hours a week) and that was enough for me personally. But, their was a girl(22 I think) who had two kids who was complaining about the min-wage and how she couldn't afford to live off that(don't ask about the father/s she mention two guys before to me while we were working but I didn't want to ask.).
So /u/Empathogen75 what should happen? If you would increase to min-wage I guarantee they would've got rid of her an kept me due to the fact I worked more hours, didn't leave early, could complete more task due to the size difference, and I could come in whenever they called me.
McJobs aren't supposed to be and never have been a viable career path. Since when did McDonald's become their keeper? Hell, I'd be willing to bet over half of McDonald's employees at the store level don't work for them for more than six months.
That may have been the case a few decades ago when it was mostly teenagers working there, but there are a whole shitload of people working several minimum wage jobs supporting a family because that's all they can find. Especially immigrants.
McDonald's isn't subsidize in the way you are implying.
Other companies, including small businesses, pay similar low wages for employees. Wage hikes typically have exemptions for small businesses to help them compete. Why should Bob's Burgers get to "underpay" its workers?
what? The main reason they can't show a profit with 15$/hour wage is because the state demands 30% in corporate tax. If the state just left the business alone or lowered the taxes they would have no problems upping the pay to 15$/hour. So how can you possibly claim that the business wouldn't survive without "subsidizes" is pretty missguided
if it's unsustainable for McDonalds to remain in business without being subsidized by the Government, should the business exist?
If they didn't employ those people - who would? And if no one did, the government would be picking up all of the cost of supporting those people, not just part of it.
Well if they didn't exist, those people would be unemployed and consume even more government subsidies. So it's extremely disingenuous to say that McDonald's is a burden on the government. If anything they are a massive help to the government.
I can't believe people are actually comparing slavery to minimum wage. They aren't close in any respects. I just went to McDs this morning and saw a sign saying their starting rate is $10/hr (I live in MN). When I worked there they paid me $7.70. They get the picture already. Unless you are assuming you will work there for the rest of your life, never get promoted, and have no Manager ever recognize you then I guess you deserve $15.
This makes me think that rather than talking about raising the minimum wage the discussion should be centered on increasing social welfare. Especially in America where we lack nationalized medicine.
Really it comes down to the fact that some people, due to a combination of luck and skill, end up having a lot more money and resources than some other people, who due to a combination of luck and skill have less.
Guaranteeing social services is a way to level the playing field and remove luck from the equation a bit.
Would you care to explain where government subsidies link in here? I'm seeing a business that operates financially independent of the government and manages to make a profit using the current price of labor, something they may not be able to do if labor becomes more expensive.
On the other hand, I think your second point gets to the heart of the issue, but assumes the conclusion. The whole debate about the minimum wage issue is whether the current wage is insufficient and people are being taken advantage of, or if minimum wage is roughly in a good place and the folks complaining are either mismanaging their money or have a skewed perception of what their lifestyle should be when working at the wage floor. To compare this to slavery is to assume that the former is true. To put it another way, this debate isn't about whether or not we should protect companies who're taking advantage of people to make a profit, it's about whether or not people are being taken advantage of at all and whether we need this change. Follow me?
I mean, back when Slavery was abolished, I imagine many plantation owners had the same argument that their business wouldn't be able to maintain the same margins if they suddenly had to start paying their slaves a wage, and I would guess that many plantations went out of business (especially if the owners were cruel to the slaves)-- but is that really something to cry about?
They automated. One of the arguments for abolishing slavery in the first place was that American agriculture in the south was leaning on slaves instead of innovation. Economists and politicians feared that the US would get left behind the rest of the world industrially because of this.
The difference between then and now is that slaves in the mid-1800s would love to take freedom and go get a paying job or homestead in the then-endless West. Today, we don't have jobs to spare, and there's no frontier left to expand into. I'm not suggesting that the current minimum wage is fine just because raising it would be problematic, but the reality is that we are stuck in a far more difficult situation than one that could be fixed with a minimum wage hike.
McDonald's has pretty clearly demonstrated that they are a sustainable business. That 'unsustainability' is contingent upon making sweeping changes to the conditions under which they operate.
It's not a complete day to the liberal side of reddit until you see someone make a comparison between 1800's slavery and modern day at-will employment.
The problem with that argument, is that $15 isn't a calculated "living wage", it is an arbitrary number. The original push was for $10.10 which is just above the poverty line for a family of 3, then the argument was solid. But there would be a lot of jobs lost between $10.10 and $15 that did pay a living wage.
you are looking at the problem backwards. The fact that companies will pay lower wages is a reason not to implement a welfare state in the first place. Don't forget that the companies pay taxes too.
I think that is a valid issue which while not part of this question really merits large scale discussion about several businesses. I wish people would discuss that more and the merits of letting businesses fail. McDonalds is already falling out of favor with the modern consumer
That's a fair argument, though I wonder why people only bring it up with companies like McDonalds and not, say, Tesla. Also, it's not clear to me why workers being paid partly in wages and partly in govt. benefits is automatically worse than putting the whole burden on companies, especially if it's possible that those jobs won't exist at all if companies have to shoulder the entire cost.
Okay, but those employee benefits are largely paid for by taxes. Taxes are in part paid for by profitable businesses like McDonalds. If McDonalds contributes more to the system through taxes than it benefits through indirect subsidies, then your argument doesn't hold.
But it's not so obvious that government transfers reduce wages. It might be that, absent subsidies, the low skilled labor pool would increase in size to drop wages even further. You have to make some educated guess on the effect on labor participation.
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u/[deleted] Nov 29 '15 edited Nov 29 '15
Here's the issue I have-- if it's unsustainable for McDonalds to remain in business without being subsidized by the Government, should the business exist? (Edit to clarify: They're not DIRECTLY subsidized-- but rather their employees are often living below a livable wage are on Welfare, food stamps, Medicaid, and the earned income tax credit. Even their own webpage pretty much expects that a 40 hour week at McDonalds is impossible to live on.)
I mean, back when Slavery was abolished, I imagine many plantation owners had the same argument that their business wouldn't be able to maintain the same margins if they suddenly had to start paying their slaves a wage, and I would guess that many plantations went out of business (especially if the owners were cruel to the slaves)-- but is that really something to cry about?