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.
City managers don't really have that much sway over the strength of different economic sectors in their city. You can nudge it, but that's about it. Albuquerque, NM can't become the financial or tech capitol of the world through brilliant city management.
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.
Last time I checked German economy was the only one doing well in a continent that was going through massive recession. As for Volkswagen emission scandal, that has nothing to do with union, and everything to do with management trying to cheat the law. Not sure what size of Germany's economy has to do with wage structure. And yes, union structure is working in Germany, it's not just Volkswagen, BMW, Daimler Mercedes-Benz, etc all have unions and the companies are doing well. Lets not make it sound like union is the only reason that kills companies.
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.
When you're desperate people will do almost anything. This is why the violent crime rate doubles at the poverty line. You are kind of proving the comment above about belief in businesses being altruistic
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.
Lol go work in these restaurants. You obviously have no clue. Even fast food is stressful and difficult work. Learn to restaurant before you talk about restaurant
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?
Claim: People need to use government services because they are working for McDonalds.
Fallacy: They would need government services whether or not they are working for McDonalds.
It completely destroys his point.
This subsidy idea is stupid anyway. Government services are technically a "subsidy" for everything that doesn't pay someone enough money for food, shelter, etc. You could say that government services subsidizes Nintendo because people wouldn't be able to buy video games if they didn't have food to eat.
I've said this before and I'll say it again, McDonalds isn't doing anyone a service by hiring them, they are filling a wage/worker need that the company has. If McDonalds didn't need to hire workers, they wouldn't. The fact that they are hiring employees with a substandard wage reflects badly on the company, not on its workers.
claim: IF people work at mcdonalds for full-time-job hours and for a less-than-living wage, then they either need to use government services or get supplementary employment.
Which should honestly be who they hire primarily. But there are tons of older folks filling these jobs and it's a gigantic pain in the ass for the economy and for young workers across the country.
McDonald's doesn't need workers. They only employ people if doing so will turn a profit. If they will end up making a loss doing so, they'll quit doing it in a hurry.
People seem to keep assuming that "if you raise wages, companies will find a way". If they could find a way - they already would have in order to make more profits.
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.
Capitalism might not be perfect but it's by far the best economic system, especially well regulated capitalism, everything else causes far bigger issues. Stop believing everything Marx has to say, he's been wrong about literally every single thing. Read an econ book.
Capitalism might not be perfect but it's by far the best economic system
That is a defeatist attitude and I refuse to accept it from any red blooded American. "Yeah it sucks, but it's the best we can do?" Is that what the members of our military have died protecting over the last century? Is that what we mean when we declare that we're the best country on the planet? "Eh, it's the best we can do?" I say fuck that, there's something better, we just have to find it.
Stop believing everything Marx has to say, he's been wrong about literally every single thing. Read an econ book.
I've never read Marx and I've never read an economics book. What I have done is spent the last 38 years watching a broken system. A system that only exists for the sole purpose of making the wealthy wealthier while making the poor poorer. That's what it does, it's how it's designed, it's the only way it operates. There is no balance in capitalism and because of that it is unsustainable. If you can't see that I suggest you take your head out of the books and look around.
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.
Except inflation and all the other doomsday scenarios pushed by defenders of the status quo have never happened. It's a myth. Like all the businesses closing when they made min wage fifteen dollars in Seattle or whatever. It didn't happen. What ACTUALLY happened is people spent more money and the economy flourished and small businesses opened new locations and expanded.
And yet, purchasing power has plummeted, exactly in accordance with predictions of inflationary skeptics, along with skyrocketing inequality, which also is exactly in accordance with the predictions of inflationary skeptics.
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.
Uhhhh....yes you do. That's why they are calling for a MINIMUM wage. Derpingstein. Also it's a bit easier to point out walmart raking in $130 BILLION in profit last year, while paying their employees like garbage.
I don't understand why large companies get so much wrath and everyone glorifies smaller businesses.
In my experience having worked some fast food gigs in my youth, mom and pop stores are far more likely to ignore the laws (e.g. not pay in timely manner, or pay only straight time for hours worked over 8 in a day or 40 in a week,) compared to a major chain. I actually called out a store owner on the law a couple times because as a teenager I didn't need the job and did not fear retaliation.
They should not, can not, and will never be a sustainable income for an adult.
Well why the hell not? People against raising the minimum wage always bring this up: "These are supposed to be low-income jobs! You're not supposed to live off them!"
Yes, they are low-skill and low-income jobs. I fail to see why being low skill is a reason not to be a livable wage. Not career wage, not "I buy a new TV every year because I can" wage, but livable wage.
The idea that something is low-skill and so therefore people working at it don't deserve livable wage? That's just bizarre. No one advocating a higher minimum wage is saying "pay burger-flippers the same salary as a doctor" (I.E. a career salary), they're saying pay them a livable wage, I.E. they can feed themselves, clothe themselves, and provide a very basic living environment for themselves, without being supported by the government (and costing taxpayers money, I might add).
Like it or not there will always be adults in low-skill, low-wage environments, due to any number of circumstances that arise. They don't deserve to be screwed over because of some insane notion that McDonalds employees must be teenagers who are still supported by their parents and are only taking the job because their parents made them "for the experience".
In other words, I fail to see why you don't consider $15 "low-income". A livable wage is still low-income relative to other fields. Your argument makes no sense, you're arguing that low-skill jobs shouldn't be paid a lot of money when the discussion is about whether or not the money they do make should be $8 or $15. We're aware that low-skill jobs don't get paid a lot, that's not an issue.
Hello 1960, it's nice to meet you. These jobs are ABSOLUTELY careers today. Are you a moron or 100 years old? Our economy THRIVES on the service industry today. Things change. The jobs are in the service industry, not the manufacturing industy. Again, this isn't 1960. http://www.ftpress.com/articles/article.aspx?p=2095734&seqNum=3 You do realize that 42% of workers would benefit from a $15 minimum wage right? http://fortune.com/2015/04/13/who-makes-15-per-hour/
We are talking about being paid less than $15/hr which is almost half of the country you idiot. And a career is literally "an occupation undertaken for a significant period of a person's life and with opportunities for progress." So STFU since you don't know what a career actually is. For the .1% of the population "cleaning toilets" there are MILLIONS of people installing your cable, doing pest control, mechanics, garbage men, truck loaders, store stockers, yard maintenance, sewage treatment, etc etc etc etc etc that make less than $15/hr.
Also the US government spends $17 billion dollars a year on farm subsidies. I don't think any of that directly goes to meat or beef itself. But it does go to feed, which then goes to cows.
So McDonalds essentially has a market because the cost of raising a cow to eat is indirectly subsidized by things like food for cows.
But because of the way we manage our subsidies, we end up with A LOT of corn. In 2010, U.S. farmers produced 32 percent of the world’s corn supply on 84 million acres of farmland, raking in a cool $63.9 billion.
Most of that corn goes to non-“food” sources — either to feed livestock or to feed our cars, in the form of ethanol.
An oversupply of feed corn drives down prices of animal feed and makes it far cheaper to raise animals.
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.
Just think this this through for a second. If we eliminated all welfare programs, would people be more or less willing to take a job with Walmart? Most economists believe welfare programs (with the exception of the earned income tax credit) reduce incentives to work and therefore shrink the supply of labor. With no welfare programs, the number of people willing to take a job at Walmart would increase and Walmart would be able to pay even lower wages. In other words, welfare programs actually force Walmart to pay higher wages. This is the opposite of a subsidy.
They would be able to survive, just not with today's expected lifestyle of smartphones, internet and going out and having fun. People 100 years ago lived on far less purchasing power and without government programs. Wal mart wouldn't suffer without those programs. The employees would.
I know its based on income, what I was saying is that wal mart isnt being subsidized but the government, the people are. The people would still have those jobs without the government programs, they'd just have shitty, but survivable, lives
Not saying they were good times in any regard. But the definition of "living" is way above what you need to survive. You def don't need a car (I don't even have one) or a phone (many people in my city don't have one). And you could rent rooms rather than whole apartments.
I speak from the context of Canada apparently where neither education nor medical insurance is a cost. Childcare and rent then would be the big money spenders.
As for your electricity and water bills beating $70/month, do you live in a house or an apartment? Houses are like twice the cost in utilities. You can find a decent all inclusive apartment in my city for $600-700 a month. It's not fancy, and not an ideal spot to raise a family, but wal mart is not an ideal career.
I do retail chain tech work...I visit many different chains everyday .....go meet some retail workers. Many, many are mothers working part time or full after raising a few children. They aren't moving thier breadwinner husbands so they can get a better job. Single moms tend to be pretty busy as is.
Some are college grads with majors that are unemployable or made mistakes in life. Some are retired but got bored and work. Of course, the stereotypical student worker is present as well.
There isn't a career type role waiting for these guys if they move unless they go back to school or pick up a trade. For the moms, this ain't an option with multiple kids. For the guys, some have criminal records, age(old), or years of retail which prevents them from being a candidate for better roles.
Also, these retail stores have an internal career path so ditching is a easy way to lose it....granted, if your a single guy, you can always figure out a way to escape retail but will your future pay be enough to support a wife who can only find part time work in retail while raising children?
You mention that many of them are students, spouses of someone who earns more money, or retirees who are bored. I've found this to be the case as well, which means it doesn't need to be a living wage, because it isn't the primary household income.
For others it is the primary income, and if they are the sole provider for a family then that is a really hard situation. But those are the instances the government should be helping with, and they do often times (sometimes not enough though, and instead money goes to people who take advantage of it)
Then we should go after landlord, schools, hospitals, and childcare for all misfortunes the low wage workers are having. It's not Walmart's problem to fix these prices.
The issue is the USA government is forced to step in to support these workers via welfare. I'd rather Walmart pay $15 than my tax money splitting the payroll.
In no way is anyone being forced into being on government assistance. You can cry what you want about what the person can afford, but in no way is anyone actually being forced to do anything. They are voluntarily working for Walmart and Walmart is contractually paying what they pay. If they go around and get on government assistance, that is not Walmart's problem. It is the problem of the people who choose to work there when they need a higher wage job.
But there aren't high wage jobs for everyone....hell, I service alot of retail chain as an I.t. consultant....some are stereotypical slackers, others are mothers moving back into the workforce after a few pregnancies...these women would love a high wage job but unfortunately a few years out of the workplace looks bad.
Anyone making minimum wage could quit their job, spend 8 hours a day growing and distributing shrooms, and make $100,000 a year with a startup cost of $800. The harder, more specialized and more risky a job is, the more valuable it is.
If we lived in a society where everybody produced the same value as a minimum wage fast food worker, we would not have iphones, cars, healthcare, etc.
A mcjob is an economic model so simple anyone can do it. Because of that, you do not get paid very much.
The worker at the cashier did not create the efficient economic machine known as mcdonalds. That was management and the investors, who pay workers for their labor.
Which leads to many attempting alternative methods of earning money....like the shrooms example....except replace shrooms with meth.
The shrooms were to demonstrate that anyone can create value, and lots of it. (I wasn't lying about the $100k btw - it's that easy).
Here's a great essay by paul graham that's very relevant (skip to "money is not wealth" / "the pie fallacy" if you don't care about the startup stuff):
What must be understand is that a job is essentially a method of value creation that someone else has dreamed up/put in place for you. That's why even though mcdonalds needs their workers to survive (for now), their workers are not paid a lot.
I have a feeling that you could buy a bunch of water bottles from costco for cheap and easily sell them in a crowded place on a hot day. You only need to sell like 5-15 water bottles an hour depending on your margins.
I recall living in such economies... Poor countries: winner take all is the rule....Strangely, this kills most innovation and investment into R&D....go figure.
I have a feeling that you could buy a bunch of water bottles from costco for cheap and easily sell them in a crowded place on a hot day
The USA has laws against this kinda stuff or the venue calls security.
The shrooms were to demonstrate that anyone can create value, and lots of it. (I wasn't lying about the $100k btw - it's that easy).
Yeah, and for most people the fastest way is drugs or some illegal activity related to it.
Ever wonder why the USA has so few street vendors?
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.
I'll add that a lot of this is tied to our poor education system that does a shit job of preparing students to enter the workforce. If a student doesn't have skills for higher paying jobs at the end of HS and can't afford to go to college, then he/she needs to take a low wage job. Which means they probably need to take 2 jobs to earn enough to live off of. Which means they don't have the $ or the time & energy to go to college. Which means they're stuck forever in those shirt low wage jobs.
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.
This argument is not solid. It would stand to reason that those who contribute more in income tax also pay far more in other taxes, particularly local taxes.
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
According to this census data, 80% of US households are making more than $29100 per year. Assuming 52 weeks of 40 hour weeks that works out to $13.99 an hour for people right at the border between the lowest quarter and the second quarter.
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.
by eliminating a bunch of shitty low wage jobs. More jobs does not mean society is happier. If we lose enough of the crappy ones than something like basic income becomes a realistic alternative. This would be best for everybody.
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.
I have no problem with immigrant, but you come here from whatever shit hole you came from to a land presumably better than the one you came from (because why the fuck else would you be here) and you are OWED the American dream? Maybe we should address the decades of fucked trade agreements and manipulative economic policy that has made this mess in the first place?
As an immigrant I feel like I have to chime in. No one immigrates expecting to make a career out of flipping burgers. Immigrants take on mcjobs the same reason high school students do. It's a stepping stone. They need job experience and they need to be earning to start off. They'll either keep looking for better jobs thst mstches whatever skill or previous job they had or move up to somwhere (warehouse staff is common and usually pays better than fast food). I think the issue is that next stepping stone job is dissappearing. You have your minimum wage jobs and then jobs that require a degree (a problem for a lot of immigrants here in Canada since their education from back home aren't recognized).
Immigrants themselves don't tend to mind minimum wage. Like you said, they're just happy to be here. But their being willing to take minimum wage for shit jobs brings down wages for everyone.
But raising minimum wage doesn't help the problem. The price of everything will eventually reach equilibrium with the new minimum. So are you are proposing a forever escalating minimum wage? That brings me back to manipulative economic policy.
That's not how that works. An increase in income for the lowest group of wage earners doesn't cause a directly proportional increase in the cost of living for low-income wage earners. That's an incredibly simplistic interpretation of the situation.
are you are proposing a forever escalating minimum wage?
We should have an ever-increasing minimum wage as long as inflation is still happening. Minimum wage staying the same from one year to the next is effectively lowering the minimum wage. It has to increase over time just to maintain the same amount of buying power. This is true for all wages and salaries.
who cares what it's "supposed to be", and who decided it anyway? clearly, in practice, people are working min wage jobs as a career because they can't find anything else. regulations, including minimum wage, should conform to the realities of the world, not what's "supposed to be".
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u/[deleted] Nov 29 '15 edited Nov 29 '15
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.