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My main concern with raising the minimum wage so much in one shot is that a significant percentage of restaraunts will simply replace cashiers/waiters with electronic touch screens destroying hundreds of thousands of jobs forever.

So I voted raise it to $10. We can then evaluate how the job market has responded to it, and judge whether further raises are prudent.

If you want to raise it higher than $15, please write what you want it to be in a comment.

http://www.slate.com/articles/news_and_politics/politics/2015/04/the_fight_for_15_it_s_a_bad_idea_raising_the_minimum_wage_to_15_would_hurt.html

QuoteThe Fight Against 15

Increasing the minimum wage so dramatically will damage the economic prospects of millions of vulnerable people.

By Reihan Salam

The "Fight for 15" is just getting started. Last week, protesters gathered in cities across the country to demand a $15 hourly minimum wage, and at least some national politicians are heeding their call. Martin O'Malley, the former governor of Maryland who is positioning himself as Hillary Clinton's liberal rival for the Democratic presidential nomination, endorsed a $15 minimum wage, and it's all but certain that other Democrats will soon follow. So might a handful of Republicans looking to demonstrate that they too care about stagnant incomes for low-wage workers. Minimum wage ballot initiatives passed by substantial margins in four Republican-leaning states in November, and GOP Senate candidates Tom Cotton of Arkansas and Dan Sullivan of Alaska came out in favor of state (but not federal) minimum wage hikes.

None of this should come as a shock. Public support for a minimum wage hike is overwhelming. One recent survey, sponsored by the National Employment Law Project, found that 63 percent of Americans favor increasing the minimum wage to $15 over the next five years, and that a more modest increase to $12.50 is backed by 75 percent of Americans, including 53 percent of Republicans. Opposing a minimum wage increase could be hazardous to your political health, and my guess is that opponents will prefer to dodge the issue than to engage it head on.

Why beat your head against the wall when you can just go with the flow and embrace a very popular idea? I can think of only one good reason: that increasing the minimum wage so dramatically will damage the economic prospects of millions of vulnerable people. My view is that the labor market is changing in ways that make huge minimum wage hikes, like the one backed by the Fight for 15 movement, very dangerous.

First, let me stipulate that there is a lively, ongoing debate among serious, thoughtful people about the wisdom of more modest increases in the federal minimum wage. For years, scholars have been drawing on variation in minimum wage levels across states to determine whether minimum wage hikes reduce employment levels. Can we discern the effects of a minimum wage hike by, say, comparing two neighboring counties, one in which the minimum wage increased and the other in which it did not? Can we screen out all of the nonrandom differences between states and cities that might influence their local minimum wage laws? I'm skeptical, but many scholars, like University of Massachusetts–Amherst economist Arindrajit Dube, have tried to do just that. Dube and his collaborators have concluded that modest minimum wage hikes don't appear to reduce employment levels. Other economists, like David Neumark and William Wascher, disagree.

But let's say that Dube is right about modest minimum wage hikes. Does that settle the issue? Should we all join the Fight for 15? Not quite. There is a big difference between raising the federal minimum wage from its current $7.25 to $10.10 versus raising it to $15. (If you don't believe me, just ask Thomas Piketty.) By definition, the federal minimum wage applies across the country, despite the fact that average wages and price levels vary considerably from place to place. One scholar who has been particularly thoughtful as to why this matters is Dube himself, who has argued against a one-size-fits-all approach to the minimum wage. In a paper for the Hamilton Project, Dube observed that "states as dissimilar as Massachusetts and Mississippi have different capacities to absorb a minimum wage of, say, $11.00 per hour, and a single minimum wage has to balance the needs of states at both ends of the spectrum."

What does it mean for different states to have different capacities to absorb a higher minimum wage? Consider the contrast between Massachusetts, a high-cost, high-wage jurisdiction, and Mississippi, a low-cost, low-wage one. In Massachusetts, very few workers would be affected by an increase in the federal minimum wage to $10.10, as the Bay State already has a $9 minimum wage that is set to increase to $11 by 2017. But in Mississippi, as many as 28 percent of workers would be affected. In Massachusetts, wages are higher, and so are prices. Relatively few employers will have to spend substantially more on their workforce under a higher federal minimum wage, and relatively few will have to raise their prices to account for it. In Mississippi, by contrast, many employers will have to raise their wages, and it's a safe bet that virtually all of the cost of this minimum wage hike will be passed on to consumers in the form of higher prices. You might think that, well, this isn't a huge deal if it's rich people who are paying these higher prices. But of course it will often be poor people who pay them, particularly in a poor state like Mississippi. This makes poor consumers worse off in a direct sense, in that they can purchase less with their earnings. And if consumers are at all sensitive to prices, at least some of them will choose to spend less on labor-intensive goods and services now that they are more expensive. That could reduce the number of minimum wage jobs available.

That is why Dube recommends that state and local governments set minimum wages that take into account local wages and local price levels. Specifically, he advocates setting a minimum wage at half of the median full-time wage in a given jurisdiction, a standard that would have yielded minimum wages ranging from $12.45 in Massachusetts to $7.97 in Mississippi. Suffice it to say, there is a great deal of distance between $7.97 and $15. It could be that Dube is a right-wing agitator and friend of the plutocracy who can't be trusted. I tend to think he's a sober, cautious scholar who recognizes that raising the minimum wage involves tradeoffs.

The truth is that I go further than Dube. One reason is that I'm not sure looking at short-run employment effects is the right way to understand the impact of the minimum wage. When gas prices start to climb, consumers don't respond immediately by replacing their gas-guzzlers with more fuel-efficient vehicles. They drive a bit less, depending on how high prices have gone and how much control they have over their commutes. But it takes them a bit longer to replace the cars they drive. What actually happens is that consumers scrap their gas-guzzlers faster than they would have otherwise, and when they do replace their cars, they replace them with more fuel-efficient models. Could there be a similar lag when it comes to the minimum wage? It could take time for low-wage employers to develop business models that allow them to get away with fewer less-skilled employees, meaning that we don't see the full effect of a hike right away. The economist Isaac Sorkin has made a compelling case that to really understand the impact of minimum wage laws, we need to have a much better understanding of these long-run effects.


But even if we completely ignore the possibility that firms will learn to economize on less-skilled labor, $15 an hour is a bridge too far. My deeper concern is that people who in decades past might have had a fighting chance at making their way into the middle class are now finding it hard to get on the bottom rungs of the job ladder. This matters because low-wage employers aren't just employers. They're also institutions that invest in the human capital of their workforces. Some people learn the basics of what it takes to get and to keep a job (the ability to exercise self-control, to be persistent, to show up on time, to get along with others, to speak the language of your workplace reasonably well) from their parents. Formal education also helps, but not everyone flourishes in formal education. Even the most heroic and dedicated public school teachers can only do so much to close the gap between kids from stable, supportive families and kids from fragile ones.

Low-wage employers take on the challenge of succeeding where families and schools have failed. They don't do this because they're saints. They take on this challenge when they have no choice—they'd much prefer to hire workers who are already fully qualified to take on demanding jobs than to nurture talent in-house. What happens when they do have a choice? Firms are losing interest in financing the training of their employees. Peter Cappelli, director of Wharton's Center for Human Resources, notes that although "employers in the postwar era typically selected employees for general abilities at entry-level positions, then trained them over a lifetime to meet the employers' needs," things have changed. Though employers don't generally say this outright, the new expectation is that "job candidates' skills, which are either adequate or not, are supposed to arrive with the applicants." There are many theories as to why this has happened. One obvious possibility is that firms have grown less willing to train workers in-house as skilled employees have grown more footloose, and they are reluctant to spend time and resources training workers who will eventually wind up at other firms.


Where does this leave job candidates who don't arrive readymade, with all the skills they need to climb the corporate ladder thanks to Mom, Dad, and good old Selective U.? It leaves them in a really tough place. Employers will give these employees a shot only if it's not too expensive for them to do so. As the wage floor rises, why wouldn't employers hire more experienced workers or workers with fewer personal challenges, who need less hand-holding in their first months on the job? A higher minimum wage could be good news for people who are willing to work at today's minimum wage. Yet it might also draw in, say, candidates from more affluent backgrounds who will now compete for the same jobs. Then, of course, there is the possibility that employers will hire fewer, better-skilled employees and augment their pricier labor with machines.

This doesn't strike me as a good time to decide that jobs paying less than $15 an hour should literally be against the law. There are millions of people—struggling teenagers, less-skilled immigrants, people who've been unemployed for years, ex-offenders who are trying to get on their feet—who need on-the-job experience if they're ever going to be in positions to command higher wages down the road. Let's increase wage subsidies for low-wage workers. Let's expand apprenticeship programs. Let's try all kinds of things, like celebrating employers that successfully upgrade the skills of their low-wage workers and not just the Googles of the world, which hire only the high-skilled and expect to get patted on the back for it. But let's not lock millions of people out of entry-level employment by raising the minimum wage to $15 an hour.

Raise it to $15. If that causes massive unemployment, create a new TVA.

Quote from: jimmy olsen on April 23, 2015, 01:06:12 AM
My main concern with raising the minimum wage so much in one shot is that a significant percentage of restaraunts will simply replace cashiers/waiters with electronic touch screens destroying hundreds of thousands of jobs forever.

Aren't waiters in the US usually paid by tips, not minimum wage anyway?

Yeah, but I think Tim means restaurant employees in general.  I think the majority of restaurant employees work at places like McDonald's, for a straight wage.

I voted $15, I think that's about right.

That said, if I didn't get an immediate raise to about $25, I'd start calling for a cull of the helots.

If it does destroy jobs (via automation), that's ok.  That's inevitable anyway, and we might as well heighten the contradictions of the system now rather than later.  Really, raising the minimum wage is the wrong way to go about it: we should have a guaranteed minimum income instead.  At that point, the market could set wages however it liked and no one could complain, except cranks like me who want actual communism.

Quote from: jimmy olsen on April 23, 2015, 01:06:12 AM
My main concern with raising the minimum wage so much in one shot is that a significant percentage of restaraunts will simply replace cashiers/waiters with electronic touch screens destroying hundreds of thousands of jobs forever.

In the UK supermarkets and WH Smiths are trying that one.
People don't like it.
McDonalds in Switzerland is trying to do it too but I've only once seen someone use them.
In a business where customer service is even more important and a country where people really like the human touch...I don't see those touch screens catching on in the US.

Also even in Japan where they have caught on (people are happy to be left alone) you've still a lot of people employed in restaurants.


Rather than raising minimum wage a good first move in the US would be to enforce the current rules. Make sure tips are actually tips, an extra bonus for a good job on top of standard earnings, rather than a necessary component of salary.

QuoteThis doesn't strike me as a good time to decide that jobs paying less than $15 an hour should literally be against the law. There are millions of people—struggling teenagers, less-skilled immigrants, people who've been unemployed for years, ex-offenders who are trying to get on their feet—who need on-the-job experience if they're ever going to be in positions to command higher wages down the road. Let's increase wage subsidies for low-wage workers. Let's expand apprenticeship programs. Let's try all kinds of things, like celebrating employers that successfully upgrade the skills of their low-wage workers and not just the Googles of the world, which hire only the high-skilled and expect to get patted on the back for it. But let's not lock millions of people out of entry-level employment by raising the minimum wage to $15 an hour.

So set a lower minimum wage for young people as we do in the UK.
Or maybe even have a lower minimum wage for the first few months of employment (for a maximum of two employees per position per year say, just to stop a revolving door of hire and fire) and tax credits for employing people who have criminal records or have been employed a long time.

That is not the current rule.

Quote from: Ideologue on April 23, 2015, 03:13:25 AM
That is not the current rule.

Fix the rules then so they reflect the spirit behind them a bit better.

Well, if we're going to fix the rules, might as well go the extra mile. :P

Quote from: Tyr on April 23, 2015, 03:10:12 AM
In the UK supermarkets and WH Smiths are trying that one.
People don't like it.
McDonalds in Switzerland is trying to do it too but I've only once seen someone use them.
In a business where customer service is even more important and a country where people really like the human touch...I don't see those touch screens catching on in the US.

I don't know as much as you know about the US, but I have seen a significant increase in the number of touchscreen-ordering systems for small restaurants/carryouts around my locality (which is in the US, but maybe not in the US where you live).

Let the states raise their minimum wages.

Well it was $7.25 in 2009 so I guess in today's money that would be about $8. So raise it to that.

Quote from: Valmy on April 23, 2015, 09:02:31 AM
Well it was $7.25 in 2009 so I guess in today's money that would be about $8. So raise it to that.

What makes 2009 so special?

Why not use the 60s as a benchmark and raise it to $11?

Because that was the last time we raised it. If $7.25 2009 dollars was good for 2009 why not 2015? Not much has changed since then.

Quote from: Zanza on April 23, 2015, 02:11:31 AM
Aren't waiters in the US usually paid by tips, not minimum wage anyway?

They still have to make at least minimum wage.  Basically, the only difference for waiters is that their money comes more from the tips than the restaurant.  But if they don't make minimum on tips alone, the difference has to come out of the employer's pocket.

There's a separate minimum wage for tipped positions.  Currently $2.13 I believe.

I have heard that the people making minimum wage are largely women so increasing it would make a dramatic impact on the gender wage gap. I suppose this is because so much of the male underclass is in jail.

With that consideration, that alot of these are single women likely with children, raising it to $10 or $15 might be a good idea. I don't know. There are also lots of college and high school kids working MW jobs who don't need it...well actually with college tuition being what it is. I mean outside of considerations about how many MW jobs that would kill.

Quote from: Valmy on April 23, 2015, 09:17:50 AM
Because that was the last time we raised it. If $7.25 2009 dollars was good for 2009 why not 2015? Not much has changed since then.

For starters, it was actually a stepped program from 2007, so $7.25 was "good enough" for 2007, not 2009.  In fact, it wasn't that it was good enough, but that was as much as they could muster the political willpower to implement.

Come to think of it, they couldn't even implement that on its own- the only way they managed the minimum wage hike was to attach it as a rider to the 2007 appropriations bill for Iraq War funding.

Congress couldn't pass a bill saying the sky is blue without doing shit like that.

Quote from: Valmy on April 23, 2015, 09:02:31 AM
Well it was $7.25 in 2009 so I guess in today's money that would be about $8. So raise it to that.

Is there no automatic mechanism for adjusting the minimum wage (inflation, average wage increases or similar)?

Quote from: Syt on April 23, 2015, 09:59:21 AM

Quote from: Valmy on April 23, 2015, 09:02:31 AM
Well it was $7.25 in 2009 so I guess in today's money that would be about $8. So raise it to that.

Is there no automatic mechanism for adjusting the minimum wage (inflation, average wage increases or similar)?

Nope. And wages are pretty stagnant so most American workers have gotten poorer as the years go by.

Quote from: Admiral Yi on April 23, 2015, 07:52:50 AM
Let the states raise their minimum wages.

that.

It's up to the States to do it, not the Federal.  Then people will move to States they feel better in, if it really makes a difference.

Quote from: Admiral Yi on April 23, 2015, 07:52:50 AM
Let the states raise their minimum wages.

Yeah.

States like New York might be able to handle a $15/hour rate across the board, but this will cause some serious pain in places like Mississippi, Arkansas, etc.

Are States able to set minimum standards for Federally regulated employees?

I don't have an opinion on US minimum wage.

Quote from: Admiral Yi on April 23, 2015, 09:45:18 AM
There's a separate minimum wage for tipped positions.  Currently $2.13 I believe.

That's a good first start for change.  Tips shouldn't subsidize restaurants.

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

In theory that is true.  But in practice, all too often, the house takes a percentage of the tip pool.

Quote from: crazy canuck on April 23, 2015, 03:03:34 PM

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

In theory that is true.  But in practice, all too often, the house takes a percentage of the tip pool.

Really? How often is that?

Quote from: Berkut on April 23, 2015, 03:49:32 PM

Quote from: crazy canuck on April 23, 2015, 03:03:34 PM

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

In theory that is true.  But in practice, all too often, the house takes a percentage of the tip pool.

Really? How often is that?

All too often

Even when the house does not take a cut, tips do subsidise restaurants as tipping culture allows restaurants to get away with paying their employees less.

Quote from: crazy canuck on April 23, 2015, 03:50:41 PM

Quote from: Berkut on April 23, 2015, 03:49:32 PM

Quote from: crazy canuck on April 23, 2015, 03:03:34 PM

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

In theory that is true.  But in practice, all too often, the house takes a percentage of the tip pool.

Really? How often is that?

All too often I have no idea

FYPFY

Quote from: grumbler on April 23, 2015, 03:54:35 PM

Quote from: crazy canuck on April 23, 2015, 03:50:41 PM

Quote from: Berkut on April 23, 2015, 03:49:32 PM

Quote from: crazy canuck on April 23, 2015, 03:03:34 PM

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

In theory that is true.  But in practice, all too often, the house takes a percentage of the tip pool.

Really? How often is that?

All too often I have no idea

FYPFY

Not quite.  I don't know the precise number but I do know it happens enough for the employment standards branch here to have launched an investigation to try to crack down on the practice.  So I think I will stick to my much more accurate response of all too often.

Quote from: Martinus on April 23, 2015, 03:53:34 PM
Even when the house does not take a cut, tips do subsidise restaurants as tipping culture allows restaurants to get away with paying their employees less.

That's not a subsidy.  Any more than having to pay for your own transportation and parking is a subsidy.

It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers.

Quote from: Admiral Yi on April 23, 2015, 04:22:34 PM

Quote from: Martinus on April 23, 2015, 03:53:34 PM
Even when the house does not take a cut, tips do subsidise restaurants as tipping culture allows restaurants to get away with paying their employees less.

That's not a subsidy.  Any more than having to pay for your own transportation and parking is a subsidy.

It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers.

I agree that minimum wage laws which permit lower wages is not a direct subsidy in the same way as preferential tax treatment would be a subsidy.  But I can see the argument that it is an indirect subsidy as the state is allowing that sector to have lower operating costs.

Quote from: Admiral Yi on April 23, 2015, 04:22:34 PM

Quote from: Martinus on April 23, 2015, 03:53:34 PM
Even when the house does not take a cut, tips do subsidise restaurants as tipping culture allows restaurants to get away with paying their employees less.

That's not a subsidy.  Any more than having to pay for your own transportation and parking is a subsidy.

It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers.

Tipping adds to the price of the meal. The restaurant can't receive this money directly, but it still benefits from cheaper labor as a result.

Quote from: Admiral Yi on April 23, 2015, 09:45:18 AM
There's a separate minimum wage for tipped positions.  Currently $2.13 I believe.

That's a minimum hourly wage that can be paid as long as tips bring the employee's total pay to at least the real minimum wage.

Quote from: Admiral Yi on April 23, 2015, 03:00:40 PM

Quote from: Tonitrus on April 23, 2015, 02:46:49 PM
That's a good first start for change.  Tips shouldn't subsidize restaurants.

They don't.

Tips simply shouldn't be a factor in regards to laws on minimum wage.  Better?

Quote from: Habbaku on April 23, 2015, 11:02:04 AM

Quote from: Admiral Yi on April 23, 2015, 07:52:50 AM
Let the states raise their minimum wages.

Yeah.

States like New York might be able to handle a $15/hour rate across the board, but this will cause some serious pain in places like Mississippi, Arkansas, etc.

Lots of the states where that makes sense already do so.

Quote from: viper37 on April 23, 2015, 10:50:21 AM

Quote from: Admiral Yi on April 23, 2015, 07:52:50 AM
Let the states raise their minimum wages.

that.

It's up to the States to do it, not the Federal.  Then people will move to States they feel better in, if it really makes a difference.

Are minimum wage earners actually mobile enough to just move to a different state in order to seek better economic opportunities?

Yeah... The people will move to where the jobs are thing just doesn't apply for most

Quote from: Peter Wiggin on April 23, 2015, 10:55:57 PM
Tipping adds to the price of the meal. The restaurant can't receive this money directly, but it still benefits from cheaper labor as a result.

How is that?  Currently the restaurant gets $20 (let's say) from you for the food, drink, and facilities, and you pay $4 directly to the waiter.  It would make no difference to the restaurant if you paid them $24 and they paid $4 to the waiter.

Quote from: Admiral Yi on April 24, 2015, 03:44:54 AM

Quote from: Peter Wiggin on April 23, 2015, 10:55:57 PM
Tipping adds to the price of the meal. The restaurant can't receive this money directly, but it still benefits from cheaper labor as a result.

How is that?  Currently the restaurant gets $20 (let's say) from you for the food, drink, and facilities, and you pay $4 directly to the waiter.  It would make no difference to the restaurant if you paid them $24 and they paid $4 to the waiter.

Well, you are exactly agreeing with what Peter Wiggin said.

If tipping is seen as mandatory (due to cultural, peer pressure etc. reasons), then it is effectively an increase of the price and it would be more honest to just add it to the price listed in the menu and have the restaurant owner increase the salary of the staff by a corresponding amount. This way the outcome will be more fair, as the salary of the staff would not depend on arbitrary opinion of the customer, often based on non-service-or-quality-related factors, such as "was the waitress pretty". And it would also allow for a more fair split of the benefit between individual staff members. I think it also creates a healthier work environment, as it reduces a potential hostility between the server and the customer ("that asshole left no tip") etc. Of course, some will say that the quality of service will fall as a result but I disagree - I have been to restaurants in many countries with no (mandatory) tipping culture, and well paid waiters were nonetheless very polite and helpful.

If tipping is not mandatory and is seen as something extra for an excellent, above average service, then the server cannot rely on it as a part of his or her salary, and consequently needs to be compensated better by the employer

Where did we agree?  The part where he said the restaurant benefits and I said it makes no difference? :lol:

I think the tipping culture really works in (short term) favour of one party - the employer - as it follows the classic divide et impera principle, by setting (otherwise) fairly common interests of the server, other staff members and the customer (have a good experience) at odds with each other, thus effectively alleviating the employer's/restaurant owner's liability for delivering that to all parties involved (by paying its employees well and delivering good value for money to a customer).

Quote from: Admiral Yi on April 24, 2015, 03:44:54 AM

Quote from: Peter Wiggin on April 23, 2015, 10:55:57 PM
Tipping adds to the price of the meal. The restaurant can't receive this money directly, but it still benefits from cheaper labor as a result.

How is that?  Currently the restaurant gets $20 (let's say) from you for the food, drink, and facilities, and you pay $4 directly to the waiter.  It would make no difference to the restaurant if you paid them $24 and they paid $4 to the waiter.

Sure, but why are you giving the restaurant $24 for a $20 meal?

Quote from: Peter Wiggin on April 24, 2015, 04:09:29 AM
Sure, but why are you giving the restaurant $24 for a $20 meal?

Presumably because you think it's worth $24 dollars.  Just like you did before they switched from tipping to wages.

Quote from: Martinus on April 24, 2015, 04:00:39 AM
I think the tipping culture really works in (short term) favour of one party - the employer - as it follows the classic divide et impera principle, by setting (otherwise) fairly common interests of the server, other staff members and the customer (have a good experience) at odds with each other, thus effectively alleviating the employer's/restaurant owner's liability for delivering that to all parties involved (by paying its employees well and delivering good value for money to a customer).

How in the world does tipping set the interests of the customer against the interests of the server?

Quote from: Admiral Yi on April 24, 2015, 04:11:48 AM

Quote from: Peter Wiggin on April 24, 2015, 04:09:29 AM
Sure, but why are you giving the restaurant $24 for a $20 meal?

Presumably because you think it's worth $24 dollars.  Just like you did before they switched from tipping to wages.

I feel like we've gotten into a semantic debate. Marty said tipping (by customers) subsidized restaurants. You replied that "It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers." My point was that a tip, like a price increase, was beneficial to the restaurant whether they are technically subsidies or not.

Quote from: Peter Wiggin on April 24, 2015, 04:29:29 AM
I feel like we've gotten into a semantic debate. Marty said tipping (by customers) subsidized restaurants. You replied that "It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers." My point was that a tip, like a price increase, was beneficial to the restaurant whether they are technically subsidies or not.

Please explain what you mean by beneficial to the restaurant.  I had thought you meant the owner came out ahead.

Whether you give the restaurant $20 and the waiter $4 or the restaurant $24, the restaurant comes out ahead of a scenario where you only give the restaurant $20.

Well yeah.  24 is a bigger number than 20.  Not sure what that has to do with tipping and the minimum wage.

Quote from: Admiral Yi on April 24, 2015, 04:46:26 AM
Well yeah.  24 is a bigger number than 20.  Not sure what that has to do with tipping and the minimum wage.

It has nothing to do with the minimum wage. It has to do with tipping because that's how we got those numbers.

Quote from: Peter Wiggin on April 24, 2015, 05:51:39 AM
It has nothing to do with the minimum wage. It has to do with tipping because that's how we got those numbers.

In my scenario the total bill to the customer was the same whether there was tipping or not.

Quote from: Syt on April 23, 2015, 09:59:21 AM
Is there no automatic mechanism for adjusting the minimum wage (inflation, average wage increases or similar)?

Not federal, no.  Some states (like here in NJ) are adjusting for inflation now.  Here in NJ, the minimum wage is increased by the CPI-W for the preceding year.

Quote from: Zanza on April 24, 2015, 01:10:59 AM

Quote from: viper37 on April 23, 2015, 10:50:21 AM

Quote from: Admiral Yi on April 23, 2015, 07:52:50 AM
Let the states raise their minimum wages.

that.

It's up to the States to do it, not the Federal.  Then people will move to States they feel better in, if it really makes a difference.

Are minimum wage earners actually mobile enough to just move to a different state in order to seek better economic opportunities?

Of course they are.  If Mexicans making way less than the US minimum wage can move to this country illegally, US citizens making $7.25/hour can certainly move to a different state (or a different part of the same state).

That said, if all you're qualified to do is a minimum wage job, you're probably better off making $7.25/hr in West Virginia or Arkansas than making $15/hr in New York or California.

Are things really that expensive in eastern California or upstate New York?

I imagine upstate NY would get pounded if the whole state went to $15.

For that matter, I think most states have parts that would get hurt by a $15 min wage.

Quote from: Admiral Yi on April 24, 2015, 09:27:04 AM
I imagine upstate NY would get pounded if the whole state went to $15.

For that matter, I think most states have parts that would get hurt by a $15 min wage.

Ah I thought those were state minimum wages.

Quote from: Valmy on April 24, 2015, 09:27:43 AM
Ah I thought those were state minimum wages.

AFAIK the only jurisdiction that currently has $15 is SeaTac.

Quote from: Admiral Yi on April 24, 2015, 07:08:45 AM

Quote from: Peter Wiggin on April 24, 2015, 05:51:39 AM
It has nothing to do with the minimum wage. It has to do with tipping because that's how we got those numbers.

In my scenario the total bill to the customer was the same whether there was tipping or not.

Right.  In the current system, if the meal costs the customer $20 and the customer leave a $4 tip, then the restaurant gets the $20 and the server gets the $4.  Changing it so that the customer pays $24 to the restaurant and the restaurant gives $4 of that to the server doesn't really change anything, except eliminating tips means that the server gives up the opportunity to get a larger than normal tip by providing superior service.

Quote from: Admiral Yi on April 24, 2015, 04:35:03 AM

Quote from: Peter Wiggin on April 24, 2015, 04:29:29 AM
I feel like we've gotten into a semantic debate. Marty said tipping (by customers) subsidized restaurants. You replied that "It's only a subsidy if the restaurant receives additional money on top of what it gets from its customers." My point was that a tip, like a price increase, was beneficial to the restaurant whether they are technically subsidies or not.

Please explain what you mean by beneficial to the restaurant.  I had thought you meant the owner came out ahead.

And the owner does, namely in payroll taxes.  Especially with unreported direct tipping, those employers are significantly reducing their tax burden. 

Even with a theoretical business with reported tips distributed by the house from a tip pool and taxed completely as normal payroll, the business is still benefiting in that the business needs a much lower amount of cash on hand for payroll than a competing business that disallows tipping and pays its employees the same, on average, in the form of direct wages.

TL;DR: businesses with tips need less cash on hand and may have a lower tax burden than their wage competitors.

Quote from: DontSayBanana on April 24, 2015, 09:31:25 AM
And the owner does, namely in payroll taxes.  Especially with unreported direct tipping, those employers are significantly reducing their tax burden. 

Even with a theoretical business with reported tips distributed by the house from a tip pool and taxed completely as normal payroll, the business is still benefiting in that the business needs a much lower amount of cash on hand for payroll than a competing business that disallows tipping and pays its employees the same, on average, in the form of direct wages.

TL;DR: businesses with tips need less cash on hand and may have a lower tax burden than their wage competitors.

The taxes point is a good one; the cash one not so much, since the owner is getting increased cash flow from the increased overall bill.  Plus he's getting the interest on the payroll that's he's holding for a week or two.

I am not sure that "it is easier to evade taxes that way" is such a great selling point for a business model, unless you are a crook...

Tipping is dumb for a variety of reasons.

That is subsidizes the business is not one of them though.

Quote from: crazy canuck on April 23, 2015, 03:58:10 PM
Not quite.  I don't know the precise number but I do know it happens enough for the employment standards branch here to have launched an investigation to try to crack down on the practice.  So I think I will stick to my much more accurate response of all too often.

The employment standards branch in Vancouver has (secretly) launched an investigation to try to crack down on the practice of house taking a percentage of the tip pool in the US?  I'm calling bullshit.  If they are launching an investigation of Canadian houses, that's not relevant to this discussion.  I'll stick with an assertion that I'm sure that you have no idea but are too stubborn to admit it.

the fact of the matter is that it is against the Federal tax law for businesses to do this in the US.

QuoteThe basic rule of tips is that they belong to employees, not the employer. Employees can't be required to give their tips or any part of them to the company, except as part of a valid tip pooling arrangement (see "Tip Pooling," below) -- and even then, the tip pool must be divided only among certain other employees. The employer can't be part of the pool.

the only exception is that employers can make employees pay the service fee on processing the fee portion of a credit card charge. http://www.nolo.com/legal-encyclopedia/tip-pooling-credits-service-employees-29804.html (http://www.nolo.com/legal-encyclopedia/tip-pooling-credits-service-employees-29804.html)  maybe Vancouver should just adopt the relevant US law, and avoid having to investigate under employment standards rather than tax law.

$12.50

Forward, Not Back.

But... but... opposites?

Listened to an interesting (and by interesting, I mean terrifyingly detached from reality) interview with Diana Furchtgott-Roth on BBC World Service talking about how boosting the minimum wage is immoral as giving low-wage workers more than they're worth (she did use the word immoral- she also dropped the word "communism" in talking about the issue).

What I realized is that I'm sick of both sides of the argument.  The ultra-liberals fighting for a $15 minimum wage seem to be too naive to consider that there would be nothing stopping businesses from simply inflating prices to match- it's why I'm actually against a drastic hike in the minimum wage: without the willpower to couple it with price controls, it would basically just amount to artificial inflation.  On the other hand, the ultra-conservatives seem to have a bad case of mistaken priorities.

I'm starting to come to the viewpoint that the conservative argument is based on a fundamentally different idea of the role of government.  To my mind, the priorities of the government should be first to guarantee a safe and consist minimum standard of living for its citizens- that's not communism, that's just good government.  Once it's accomplished that, then it can turn its focus towards revenue and market-coddling.  Which is where I really break with the conservatives, and why they're making me angrier than the liberals at this point- the argument is steadily showing that the current wage conditions guarantee a minimum standard of living which is neither safe nor consistent- meanwhile, conservatives like Ms. Furchtgott-Roth are refusing to acknowledge the government's obligation to its citizens first, while calling people "immoral" for having the gall to insist they be prioritized over policies to improve market cash flow.

So that's my rant.

TL;DR: Conservatives are pissing me off by conflating "economy" and "society" and holding the stupid chimera up as some slam-dunk argument against raising the minimum wage.

mods, we have no mods here!

Do 32% of the population here really favor abolishing the minimum wage?

If so, state your case.

Quote from: jimmy olsen on April 25, 2015, 08:01:14 AM
If so, state your case.

I think it boils down to "Got mine :nelson:"

Quote from: jimmy olsen on April 25, 2015, 08:01:14 AM
Do 32% of the population here really favor abolishing the minimum wage?

If so, state your case.

Maximizes employment.

Quote from: Admiral Yi on April 25, 2015, 10:33:00 AM

Quote from: jimmy olsen on April 25, 2015, 08:01:14 AM
Do 32% of the population here really favor abolishing the minimum wage?

If so, state your case.

Maximizes employment.

Also maximizes the available choices for the worker.

The minwage sets a wage floor from which normal wages are negotiated.  If it were abolished, almost all of us here would make less.  Most people on Languish do not derive the majority of their income from investment income, and even investment income could conceivably fall in aggregate as wages and then demand collapsed.  Tax receipts would likely also fall, leading to the weaker government which is conservatives' ultimate goal.

Then you would have the freedom to live in a Third World version of America, which would be great.

How does your theory account for countries that have no minimum wage, such as Germany?

I prefer the standard economics explanation of labor markets, that employers will hire workers up to the point that their marginal product equals their wages.

This is another argument in favor of a state by state approach: if the residents of certain states think labor markets work differently than I describe, they should be free to put their beliefs to the test.

As I understand it, Germany has a patchwork quilt of wage floors based on union negotiations in many different industries.  Their labor system is so different that it's an apples and oranges comparison.

SC and other low-minwage states tend to have lower wages generally than high-minwage states, no?

NY follows the federal.

No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

Quote from: Ideologue on April 25, 2015, 01:36:55 PM
No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

OK.  Still refutes your argument that wages are set in relation to the minimum wage.

I don't dispute that multiple factors are at play.  In NYC, like other urban hellholes, geography is so dominant that nominal wages would have to be higher.  I think what we'd have to look at are semi-urbanized states that have minwage differences.  It also doesn't prove that the fed minwage doesn't prop up wages, though I concede that to prove that it does we'd need an alternate U.S. where wages stagnated/fell even more between 1978 and today.

Quote from: Admiral Yi on April 25, 2015, 01:41:03 PM

Quote from: Ideologue on April 25, 2015, 01:36:55 PM
No they don't.  They have an $8.75/hr minwage.

This is new, however, and therefore not meaningful.  But NYC (the biggest part of NYS, with the highest wage differential viz. the Real America) has high wages because at the NYS minwage the slaves couldn't even eat, and you need them to at least maintain basic health while they subsist in their tiny shoeboxes so they can continue to work their two jobs.

OK.  Still refutes your argument that wages are set in relation to the minimum wage.

For the service sector, it very much is.  Retail associates make minimum wage, unless they work at some kind of a boutique shop that can't afford the bad press.  Typically, store-level management is tied to that rate, with most assistant managers I know making wages of either 15, 20, or 30 percent above minimum, with only store managers making a flat salary not directly tied to minimum wage.

Quote from: Ideologue on April 25, 2015, 12:45:40 PM
The minwage sets a wage floor from which normal wages are negotiated.  If it were abolished, almost all of us here would make less. 

I really doubt it. Your wages are set by market forces which combine some aspects of what courts are willing to pay and what it takes to keep you from walking off to another job. I don't think it is a threat that people with law degrees are going to walk out and do minimum wage work--you are in a different employment class.

A higher minimum wage will mean you pay more when you go to subway.

Quote from: Admiral Yi on April 25, 2015, 01:26:43 PM
How does your theory account for countries that have no minimum wage, such as Germany?

Germany figured out that our model doesn't protect the weakest participants in the job market and introduced a general minimum wage of 8.50€ on January 1st. The minister of labor just presented the 100-day report on the new policy. So far few to no jobs were lost. Employment is expected to reach record levels this year and unemployment is the lowest in the EU. The cost increased was compensated by price increases, but as we were close to deflation that doesn't matter either. So I guess we picked the perfect time to introduce a minimum wage.

It's a brilliant political move to introduce a minimum wage that has no real effect.

The reverse of Timmy's question: for those of you who voted for anything other than abolishing the minimum wage, what was the reasoning that got you to your number?

Quote from: Admiral Yi on April 26, 2015, 01:48:11 PM
It's a brilliant political move to introduce a minimum wage that has no real effect.

It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

Quote from: Zanza on April 26, 2015, 01:49:20 PM
It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

Do you know what these jobs were paying previously?

Quote from: Admiral Yi on April 26, 2015, 01:51:05 PM

Quote from: Zanza on April 26, 2015, 01:49:20 PM
It has an effect: Some of the worst paid jobs that have no union and thus no way to participate in Germany's corporatist model now have higher wages and can perhaps actually live on their income.

Do you know what these jobs were paying previously?

Less than 8.50€.  :P The poorest paid jobs were apparently stuff like hair cutters, call center employees, cleaners, gardeners, trash removal, some basic jobs in elderly care etc. Hair cutters in some East German regions got less than 5€ an hour.

Well hopefully that will get Joan off your backs.  :P

Quote from: Admiral Yi on April 26, 2015, 01:57:38 PM
Well hopefully that will get Joan off your backs.  :P

Virtually all of the jobs in question would at best matter very indirectly for Germany's international competitiveness or its gigantic current account surplus. It's mainly poorly paid services or retail jobs that can only be rendered locally anyway. So I don't think it addresses Joan's concerns. This won't fix Germany's depressed domestic demand and will thus not make Germans invest more in Germany, so our current account won't be affected. I have no idea what could compel German companies to invest their international profits in Germany again. My company is always talking of moving closer to the customer, i.e. investing in the US or China.

German humor.  :mellow:

Quote from: Admiral Yi on April 26, 2015, 01:48:11 PM
The reverse of Timmy's question: for those of you who voted for anything other than abolishing the minimum wage, what was the reasoning that got you to your number?

I voted for $12.50.  Simply because $15 felt like too far, while $10 felt like treading water some more.

I used to be all for eliminating minimum wage, as I bought into the free market explanations.  I also thought that laws like the minimum wage and the unwillingness to enforce them when it comes to illegal immigrants creates the worst of both worlds, where people are forced to break laws to stay in business in some industries. 

By now I think I was clearly mistaken on the first point.  Whatever the employment and inflation effects are, they're overstated massively by the opponents, and these negative effects judged by their real magnitude are countered by the advantages of protecting the lower rung workers with zero negotiating power.  Free markets may work flawlessly when it comes to supply and demand curves for widgets, but they don't always get things right when effects have several complicated orders with cross-feeding loops.

This concept of negotiating power is one that is frequently raised in this debates.  Can someone explain what is meant by it?  I can't think of a single time I negotiated my compensation.  I either excepted the terms offered or I didn't.

Or accepted. :sleep:

Quote from: Admiral Yi on April 26, 2015, 03:31:08 PM
This concept of negotiating power is one that is frequently raised in this debates.  Can someone explain what is meant by it?  I can't think of a single time I negotiated my compensation.  I either excepted the terms offered or I didn't.

Or accepted. :sleep:

I have negotiated about half my contracts.  Negotiations happen when things change.  For instance, last year the school I work for was desperate to have someone take over the AP World History course.  I was already teaching an AP course, but they offered me an additional $2000 to teach a second one.  It turned out they were not $2000 desperate, but $6000 desperate.

I would be a very hard teacher to replace, so i have some negotiating power.  A brand-new teacher or one easily replaced does not.

I've negotiated every single time.

This is actually one of the theories about why women make less. Men are more likely to be comfortable negotiating. I don't know if that's true, but it sounds plausible.

Quote from: Admiral Yi on April 26, 2015, 03:31:08 PM
This concept of negotiating power is one that is frequently raised in this debates.  Can someone explain what is meant by it?  I can't think of a single time I negotiated my compensation.  I either excepted the terms offered or I didn't.

Or accepted. :sleep:

Negotiation can happen implicitly.  Negotiating power exists when the other side will be hurt by the termination of an agreement, and is willing to pay something to avoid that, on-demand or proactively.  It's hard to have negotiating power when it comes to unskilled labor, and it's easy to have negotiating power when you're a professional with a specialization.  The more negotiating power you have, the more you can equitably share in the economic surplus created by your transaction.

Quote from: DGuller on April 26, 2015, 04:57:57 PM
Negotiation can happen implicitly.  Negotiating power exists when the other side will be hurt by the termination of an agreement, and is willing to pay something to avoid that, on-demand or proactively.  It's hard to have negotiating power when it comes to unskilled labor, and it's easy to have negotiating power when you're a professional with a specialization.  The more negotiating power you have, the more you can equitably share in the economic surplus created by your transaction.

Is it your contention that in the absence of mechanisms such as the minimum wage, unskilled labor would not equitably share in the economic surplus created by its work?

Quote from: Admiral Yi on April 26, 2015, 05:07:59 PM
Is it your contention that in the absence of mechanisms such as the minimum wage, unskilled labor would not equitably share in the economic surplus created by its work?

I think it depends on how much demand there is for the work. Employers compete with each other for that labor. But then again, if there's no demand, there's no value either.

Quote from: Admiral Yi on April 26, 2015, 05:07:59 PM

Quote from: DGuller on April 26, 2015, 04:57:57 PM
Negotiation can happen implicitly.  Negotiating power exists when the other side will be hurt by the termination of an agreement, and is willing to pay something to avoid that, on-demand or proactively.  It's hard to have negotiating power when it comes to unskilled labor, and it's easy to have negotiating power when you're a professional with a specialization.  The more negotiating power you have, the more you can equitably share in the economic surplus created by your transaction.

Is it your contention that in the absence of mechanisms such as the minimum wage, unskilled labor would not equitably share in the economic surplus created by its work?

I don't think the purpose of a minimum wage is to redress a problem with the unskilled being unable to "share" in the fair surplus of their labor.

I think the purpose is to set a floor on what people make, with the idea that while we know this is an artificial interference in the labor market, we accept the inefficiencies that result because we believe their is a greater good being served that transcends the market forces that would otherwise define what the unskilled can effectively negotiate for...

Quote from: Admiral Yi on April 26, 2015, 05:07:59 PM

Quote from: DGuller on April 26, 2015, 04:57:57 PM
Negotiation can happen implicitly.  Negotiating power exists when the other side will be hurt by the termination of an agreement, and is willing to pay something to avoid that, on-demand or proactively.  It's hard to have negotiating power when it comes to unskilled labor, and it's easy to have negotiating power when you're a professional with a specialization.  The more negotiating power you have, the more you can equitably share in the economic surplus created by your transaction.

Is it your contention that in the absence of mechanisms such as the minimum wage, unskilled labor would not equitably share in the economic surplus created by its work?

Yes.  And the fact that minimum wage increases do not in fact appear to lead to material job losses seems to somewhat support that belief.

Quote from: Berkut on April 26, 2015, 05:41:12 PM
I don't think the purpose of a minimum wage is to redress a problem with the unskilled being unable to "share" in the fair surplus of their labor.

I think the purpose is to set a floor on what people make, with the idea that while we know this is an artificial interference in the labor market, we accept the inefficiencies that result because we believe their is a greater good being served that transcends the market forces that would otherwise define what the unskilled can effectively negotiate for...

I don't disagree, but you don't want interference in the market to be counter-productive for the people on whose behalf you're interfering.  It helps when a good policy also has some economic benefits in addition to social benefits.

Quote from: DGuller on April 26, 2015, 05:56:21 PM
Yes.  And the fact that minimum wage increases do not in fact appear to lead to material job losses seems to somewhat support that belief.

I don't understand the connection between price elasticity of labor and disposition of surplus.

Quote from: DGuller on April 26, 2015, 05:58:55 PM

Quote from: Berkut on April 26, 2015, 05:41:12 PM
I don't think the purpose of a minimum wage is to redress a problem with the unskilled being unable to "share" in the fair surplus of their labor.

I think the purpose is to set a floor on what people make, with the idea that while we know this is an artificial interference in the labor market, we accept the inefficiencies that result because we believe their is a greater good being served that transcends the market forces that would otherwise define what the unskilled can effectively negotiate for...

I don't disagree, but you don't want interference in the market to be counter-productive for the people on whose behalf you're interfering.  It helps when a good policy also has some economic benefits in addition to social benefits.

Of course - that is why interfering is so difficult. It is hard to do without making the problem worse, or creating some new problem that is worse than the old problem.

I had the thought today that what we need is more market segmentation.

There are people who are willing, and in fact would prefer, to pay more for goods and services if it meant the people providing them were getting paid more.  I imagine these people tend to have more income.  There are also people, presumably on the lower end of the scale, who are simply looking for the best deal.  The problem from a business's point of view is they can only charge one price for a given item and offer one wage for a given employee.

So segment the market.  Open a coffee shop that charges $2.50 a cup, pays its employees more than minimum wage, and offers tuition reimbursement and stock options.  We can call it "Starbucks."  And the dude who doesn't want to pay for all that crap can still get his dollar cup of joe at Dunkin.

Quote from: Admiral Yi on April 26, 2015, 07:44:22 PM
So segment the market.  Open a coffee shop that charges $2.50 a cup, pays its employees more than minimum wage, and offers tuition reimbursement and stock options.  We can call it "Starbucks."  And the dude who doesn't want to pay for all that crap can still get his dollar cup of joe at Dunkin.

But all of the employees will want to work for the higher wage, and so will compete for the "Starbucks" job and drive down wages.  You'd have to segment worker pools as well, and consider some of them "hard workers" or "experienced workers" who can get the higher-wage jobs and produce enough labor value to justify the higher wages.  That'd be tough unless there really are differences between workers.

Quote from: Admiral Yi on April 26, 2015, 07:44:22 PM
I had the thought today that what we need is more market segmentation.

There are people who are willing, and in fact would prefer, to pay more for goods and services if it meant the people providing them were getting paid more.  I imagine these people tend to have more income.  There are also people, presumably on the lower end of the scale, who are simply looking for the best deal.  The problem from a business's point of view is they can only charge one price for a given item and offer one wage for a given employee.

So segment the market.  Open a coffee shop that charges $2.50 a cup, pays its employees more than minimum wage, and offers tuition reimbursement and stock options.  We can call it "Starbucks."  And the dude who doesn't want to pay for all that crap can still get his dollar cup of joe at Dunkin.

The problem with that approach is that the segmentation of the market for the products doesn't match the segmentation of the market for the labor.  Sure, there are people willing to pay more for the presumed quality (or status) of the more expensive coffee, while others aren't, but workers at either business are performing unskilled labor, and the person who would work for minimum wage at Dunkin Donuts wouldn't turn down the opportunity to make more at Starbucks.

EDIT:  well, beaten to the punch.

Quote from: dps on April 26, 2015, 08:02:07 PM
The problem with that approach is that the segmentation of the market for the products doesn't match the segmentation of the market for the labor.  Sure, there are people willing to pay more for the presumed quality (or status) of the more expensive coffee, while others aren't, but workers at either business are performing unskilled labor, and the person who would work for minimum wage at Dunkin Donuts wouldn't turn down the opportunity to make more at Starbucks.

EDIT:  well, beaten to the punch.

This is not an insurmountable problem.  A number of people apply, and you pick as many as you want.

Quote from: Admiral Yi on April 26, 2015, 08:25:50 PM

Quote from: dps on April 26, 2015, 08:02:07 PM
The problem with that approach is that the segmentation of the market for the products doesn't match the segmentation of the market for the labor.  Sure, there are people willing to pay more for the presumed quality (or status) of the more expensive coffee, while others aren't, but workers at either business are performing unskilled labor, and the person who would work for minimum wage at Dunkin Donuts wouldn't turn down the opportunity to make more at Starbucks.

EDIT:  well, beaten to the punch.

This is not an insurmountable problem.  A number of people apply, and you pick as many as you want.

But your picks are random, unless workers have skills or attitudes.

We must raise the minimum wage immediately! 15-20/hour.

Abolish.

If not for minimum wage, a gallon of milk would still be .25 cents.
And a million of dollars would still be a One Million, Austin Powers style.

Yes, the minimum wage is the cause of all inflation.  :lol:

That one needs a little work Seeb.

Quote from: Admiral Yi on April 26, 2015, 01:48:11 PM
It's a brilliant political move to introduce a minimum wage that has no real effect.

The reverse of Timmy's question: for those of you who voted for anything other than abolishing the minimum wage, what was the reasoning that got you to your number?

When somebody talks about wanting to lower or abolish minimum wage, it's because they want to pay less.  Even in the unlikely event that doing so turns out not to be the Guinness record holder for worst possible economic decision, employers considering the option should be glad there is a minimum wage to protect them from the disastrous PR and dramatically reduced business that would ensue.

The market should not be used as a basis for economic welfare because the market is not altruistic.  The business can't generate currency, but it can increase its share of the currency in circulation, so the best option to the business is to undercut market value wherever possible.

"But that's unethical!" cried the Randian.  Well, surprise, human nature is pretty much the opposite of altruism- JP Morgan Chase Bank, Bank Suisse, HSBC, Royal Bank of Scotland, AIG, Bernie Madoff, Arthur Andersen, Enron... you pretty much can't go a month without at least some anecdotal evidence that you can't trust a big market actor to act in the best interests of its employees or even its clients or customers.

Even when something big like Walmart promising to raise its base pay happens, you can usually determine that it's in the long term a cost-saving measure or an attempt to get ahead of pending legislation or policy as much as if not more than it is consideration towards its employees.  Walmart's $10 minimum wage is probably more about standardizing bookkeeping in multiple states with varying minimum wages than it is about improving the quality of life for its workers, for example.

When I talk about abolishing the minimum wage, I am not doing it because I want to pay less.  I can't imagine any empirical basis for you to make this generalization.  It's plain vanilla Bill Maher style demonization of people who hold opinions you don't like.

Altruism doesn't have anything to do with it.  I didn't make purchases because I feel charitable towards the company or employees.  Companies don't hire employees because they feel charitable towards the employee.  Employees don't accept jobs because they feel charitable towards the employer.  All these actors do what they do because they feel they come out ahead.  They do it out of self interest.

Quote from: Admiral Yi on April 28, 2015, 02:30:37 PM
When I talk about abolishing the minimum wage, I am not doing it because I want to pay less.  I can't imagine any empirical basis for you to make this generalization.  It's plain vanilla Bill Maher style demonization of people who hold opinions you don't like.

Altruism doesn't have anything to do with it.  I didn't make purchases because I feel charitable towards the company or employees.  Companies don't hire employees because they feel charitable towards the employee.  Employees don't accept jobs because they feel charitable towards the employer.  All these actors do what they do because they feel they come out ahead.  They do it out of self interest.

And because companies only act in their self interest they should be unregulated?

Quote from: Admiral Yi on April 28, 2015, 02:30:37 PM
All these actors do what they do because they feel they come out ahead.  They do it out of self interest.

Which, coincidentally, is also why increases to it get passed by politicians.

Quote from: Valmy on April 28, 2015, 03:10:30 PM

Quote from: Admiral Yi on April 28, 2015, 02:30:37 PM
All these actors do what they do because they feel they come out ahead.  They do it out of self interest.

Which, coincidentally, is also why increases to it get passed by politicians.

And, coincidentally, why some people support it and others oppose it.  :lol:

Quote from: grumbler on April 28, 2015, 03:36:25 PM
And, coincidentally, why some people support it and others oppose it.  :lol:

Indeed. It is self interest all the way down.

Quote from: Valmy on April 28, 2015, 03:40:05 PM

Quote from: grumbler on April 28, 2015, 03:36:25 PM
And, coincidentally, why some people support it and others oppose it.  :lol:

Indeed. It is self interest all the way down.

Adam Smith 101 :thumbsup:

L.A. will raise the wage to $15 by 2020

http://www.usatoday.com/story/money/2015/05/19/los-angeles-approves-15-dollar-minimum-wage/27604949/

Quote

MONEY
L.A. to boost minimum wage to $15

Michael Winter, USA TODAY
25 minutes ago

Los Angeles lawmakers Tuesday voted to boost the minimum wage to $15 an hour by 2020, the largest city to try to help its lowest-paid workers survive amid the nation's growing income inequality.

The action will gradually increase the guaranteed hourly wage from $9 in the country's second largest city. Chicago, San Francisco and Seattle have enacted similar measures. The council's 14-1 vote directs the city attorney to draft an ordinance that will require final approval later this year.

The first increase, to $10.50 an hour, will come July 1, 2016, followed by annual steps until July 2020, when the minimum wage will stand at $15 an hour. Two years later, increases will be pegged to the Consumer Price Index.

For non-profit organizations with 25 or fewer employees, the scheduled raises won't begin until 2017.

"Today, help is on the way for the one million Angelenos who live in poverty," Mayor Eric Garcetti said in a statement, adding that the minimum wage "should not be a poverty wage in Los Angeles."

Organized labor backed an increase but sought $15.25 an hour and sooner than 2020.

The local Chamber of Commerce opposed the move, saying businesses would have to cut staff, reduce hours or relocate, the Los Angeles Times reported.

"The very people (council members') rhetoric claims to help with this action, it's going to hurt," said Ruben Gonzalez of the Los Angeles Area Chamber of Commerce. It's simple math. There is simply not enough room, enough margin in these businesses to absorb a 50-plus-percent increase in labor costs over a short period of time."

A survey released Tuesday by Los Angeles County Business Federation found that 35% of the nearly 600 local business owners questioned said the wage boost would force them to cut jobs or workers' hours, with small businesses being hit hardest.

The same survey found that 66% believe business conditions will improve this year, and that 40% are planning to hire more workers -- a 10% increase over 2014.

After the L.A. council last year boosted the hourly rate to $15.37 per hour wage for hotel workers, the campaign for a higher citywide minimum wage gathered steam. Garcetti initially proposed $13.25 by 2017, but labor organizers representing workers in other low-paid industries -- gaming, food service, airport, textile, manufacturing, distribution, laundry and transportation -- lobbied hard for $15.

Quote from: grumbler on April 28, 2015, 03:41:33 PM
Adam Smith 101 :thumbsup:

+ Mancur Olson

Quote from: jimmy olsen on May 19, 2015, 06:07:52 PM
L.A. will raise the wage to $15 by 2020

Perfect.  Now let's see what happens to employment.

I predict not much.

I predict I will not buy fast food in Los Angeles any longer when I'm out there.  I will give my business to Orange County instead. :mad:

Quote from: Caliga on May 19, 2015, 07:17:30 PM
I predict I will not buy fast food in Los Angeles any longer when I'm out there.  I will give my business to Orange County instead. :mad:

You'd rather waste an hour in traffic than a couple extra dollars on your burger?  :hmm:

Quote from: The Minsky Moment on May 19, 2015, 07:14:17 PM
I predict not much.

Yeah, I think (in California) the minimum is currently too low to be having a significant effect as it is. I bet there's a lot of play in there before anything really starts crunching.

Ah, so you guys think this is one of those empty gesture deals?  I.e.  "minimum wage" workers are already getting paid more than minimum wage?

Quote from: MadImmortalMan on May 19, 2015, 08:00:49 PM

Quote from: The Minsky Moment on May 19, 2015, 07:14:17 PM
I predict not much.

Yeah, I think (in California) the minimum is currently too low to be having a significant effect as it is. I bet there's a lot of play in there before anything really starts crunching.

A raise from 9 to 15 over the next 15 sounds substantial to me. I imagine there are alot of peoplr making 10 or 11 that will be affected.

Quote from: Admiral Yi on May 19, 2015, 08:02:31 PM
Ah, so you guys think this is one of those empty gesture deals?  I.e.  "minimum wage" workers are already getting paid more than minimum wage?

I guess you are assuming that when ever there is a rise in minimum wage there is going to be less employment?

Quote from: Razgovory on May 19, 2015, 10:37:58 PM
I guess you are assuming that when ever there is a rise in minimum wage there is going to be less employment?

Except those cases when the minimum wage is lower than the prevailing market wage for unskilled labor, and those cases in which there is growth in overall employment unrelated to the minimum wage.

Quote from: Admiral Yi on May 19, 2015, 10:40:56 PM

Quote from: Razgovory on May 19, 2015, 10:37:58 PM
I guess you are assuming that when ever there is a rise in minimum wage there is going to be less employment?

Except those cases when the minimum wage is lower than the prevailing market wage for unskilled labor, and those cases in which there is growth in overall employment unrelated to the minimum wage.

What do you expect the prevailing market wage for unskilled labor is?  What do illegal immigrants make?

Quote from: Peter Wiggin on May 19, 2015, 07:45:09 PM

Quote from: Caliga on May 19, 2015, 07:17:30 PM
I predict I will not buy fast food in Los Angeles any longer when I'm out there.  I will give my business to Orange County instead. :mad:

You'd rather waste an hour in traffic than a couple extra dollars on your burger?  :hmm:

Yes.  Plus I'm not paying for it, so who cares.

Quote from: Razgovory on May 19, 2015, 11:42:58 PM
What do you expect the prevailing market wage for unskilled labor is?  What do illegal immigrants make?

I don't know.  I don't know.  Why do you ask?  Why do you ask?

Quote from: Caliga on May 20, 2015, 06:57:24 AM

Quote from: Peter Wiggin on May 19, 2015, 07:45:09 PM

Quote from: Caliga on May 19, 2015, 07:17:30 PM
I predict I will not buy fast food in Los Angeles any longer when I'm out there.  I will give my business to Orange County instead. :mad:

You'd rather waste an hour in traffic than a couple extra dollars on your burger?  :hmm:

Yes.  Plus I'm not paying for it, so who cares.

That would lean towards you then just paying for burger in LA. Why drive / spend time going out of your way if you don't need to pay for it?

Quote from: Admiral Yi on May 19, 2015, 08:02:31 PM
Ah, so you guys think this is one of those empty gesture deals?  I.e.  "minimum wage" workers are already getting paid more than minimum wage?

That is what I think.

Just heard on NPR that 40% of workers in LA currently earn less than 15/hour.  So maybe not totally meaningless.

Quote from: Admiral Yi on May 20, 2015, 07:48:57 AM
Just heard on NPR that 40% of workers in LA currently earn less than 15/hour.  So maybe not totally meaningless.

That is amazing. I figured in places like New York and LA wages were significantly higher. I guess those Five Guys burgers are going to be a bit more pricey.

It makes more sense if you keep in mind that the posh parts of LA aren't actually in LA.

Quote from: Admiral Yi on May 20, 2015, 07:54:47 AM
It makes more sense if you keep in mind that the posh parts of LA aren't actually in LA.

Ah it is one of those cities.

Quote from: Admiral Yi on May 20, 2015, 07:16:14 AM

Quote from: Razgovory on May 19, 2015, 11:42:58 PM
What do you expect the prevailing market wage for unskilled labor is?  What do illegal immigrants make?

I don't know.  I don't know.  Why do you ask?  Why do you ask?

It would seem relevant to whether or not there will be large scale unemployment.

Quote from: Razgovory on May 20, 2015, 08:10:34 AM
It would seem relevant to whether or not there will be large scale unemployment.

Therefore....

Fill in the gaps for me Raz.

Maybe they are trying to drive underclass jobs into the suburbs and release pressure on their school system  :ph34r:

Quote from: garbon on May 20, 2015, 07:24:01 AM
That would lean towards you then just paying for burger in LA. Why drive / spend time going out of your way if you don't need to pay for it?

I'd rather give my company's money to big oil than to the poors?  Duh. :)

Quote from: Caliga on May 20, 2015, 08:42:19 AM

Quote from: garbon on May 20, 2015, 07:24:01 AM
That would lean towards you then just paying for burger in LA. Why drive / spend time going out of your way if you don't need to pay for it?

I'd rather give my company's money to big oil than to the poors?  Duh. :)

Isn't your time worth something?

Though to be fair this is completely silly hypothetical. How often do you go to LA on business?

Couple of times a year.  Will be there in October.

Cal is busy hanging out at Philippe's.

Quote from: Caliga on May 20, 2015, 08:50:48 AM
Couple of times a year.  Will be there in October.

Sorry man. Traveling for business sucks ass.

It's awesome for hourly workers.  I made out like a bandit the three times I traveled for work.

Quote from: Admiral Yi on May 20, 2015, 09:13:26 AM
It's awesome for hourly workers.  I made out like a bandit the three times I traveled for work.

It's been a while, but man yeah that was pretty awesome.  I made enough traveling + OT during Y2K to pay for a TV, receiver, and speakers.  Though it's probably an even trade for having to spend that New Years in Cleveland :mellow:

Quote from: Valmy on May 20, 2015, 09:07:46 AM
Sorry man. Traveling for business sucks ass.

Definitely rough when you have kids.  I don't travel nearly as much now, but when I did it was cool getting to see parts of the country I might not have otherwise seen.

Quote from: Admiral Yi on May 20, 2015, 08:12:55 AM

Quote from: Razgovory on May 20, 2015, 08:10:34 AM
It would seem relevant to whether or not there will be large scale unemployment.

Therefore....

Fill in the gaps for me Raz.

You suggested that unemployment would rise if the minimum wage was above the prevailing market wage.  I asked what that was and you don't know.  I asked if wages for illegal immigrants factor into this, and you said you didn't know.  That seems like important information.  I also wonder if this minimum wage/job loss is linear or otherwise predictable.  For if we raised it five dollars above the prevailing market wage how much employment are we talking about?  .01% increase?  50% increase?

Quote from: Razgovory on May 20, 2015, 10:43:31 AM
You suggested that unemployment would rise if the minimum wage was above the prevailing market wage.  I asked what that was and you don't know.  I asked if wages for illegal immigrants factor into this, and you said you didn't know.  That seems like important information.  I also wonder if this minimum wage/job loss is linear or otherwise predictable.  For if we raised it five dollars above the prevailing market wage how much employment are we talking about?  .01% increase?  50% increase?

I agree that it's important information. :cheers:

Recorded price elasticities of minimum wage labor range from -0.1 to -0.3.  I.e. a 10% increase in the minwage would lead to a loss of 1% to 3% of the minwage jobs.

We don't know if the relationship is linear.  That's why I welcome the LA experiment.

Quote from: Admiral Yi on May 19, 2015, 08:02:31 PM
Ah, so you guys think this is one of those empty gesture deals?  I.e.  "minimum wage" workers are already getting paid more than minimum wage?

Not exactly.
Thinking more of the empirical work more generally, plus the fact they are more significant factors at play.

Quote from: Admiral Yi on May 20, 2015, 10:47:30 AM

Quote from: Razgovory on May 20, 2015, 10:43:31 AM
You suggested that unemployment would rise if the minimum wage was above the prevailing market wage.  I asked what that was and you don't know.  I asked if wages for illegal immigrants factor into this, and you said you didn't know.  That seems like important information.  I also wonder if this minimum wage/job loss is linear or otherwise predictable.  For if we raised it five dollars above the prevailing market wage how much employment are we talking about?  .01% increase?  50% increase?

I agree that it's important information. :cheers:

Recorded price elasticities of minimum wage labor range from -0.1 to -0.3.  I.e. a 10% increase in the minwage would lead to a loss of 1% to 3% of the minwage jobs.

We don't know if the relationship is linear.  That's why I welcome the LA experiment.

I have another thought.  If there is already a glut in minimum wage type jobs, would the loss of a small percentage even be noticed?  If say the minimum wage increases, and there is still a glut in these type of low paying jobs, is any harm done?

I'm not entirely sure what you mean Raz.

Quote from: The Minsky Moment on May 20, 2015, 12:15:52 PM
Not exactly.
Thinking more of the empirical work more generally, plus the fact they are more significant factors at play.

:yes: Such as excess profits being banked as trophies instead of shared with ground-level workers actually earning large companies their millions and even billions.  Crappy, moderate-risk, low-yield IRA portfolios where employees have no say in where their investments are going do not constitute profit-sharing in my book.

Commission sales soften the blow a small bit, but compensation is far too stratified- a prime example is a recent sales contest at my store: the top 10 associates in each district by total ticket sales received $100 Visa gift cards.  The managers of stores where these associates worked, on the other hand, were offered big-screen TVs.  For someone else's work.

Quote from: Razgovory on May 20, 2015, 02:55:05 PM
I have another thought.  If there is already a glut in minimum wage type jobs, would the loss of a small percentage even be noticed?  If say the minimum wage increases, and there is still a glut in these type of low paying jobs, is any harm done?

I'm not an economist, but doesn't elasticity handle the phenomenon you're describing?

Hmm.


(https://espnfivethirtyeight.files.wordpress.com/2015/05/casselman-datalab-minwage.png?w=610&h=871)

Hong Kong's minimum wage is around US$4.  That's not a nominal amount.  Hundreds of thousands of people are paid that wage, and we are as expensive as New York.

Quote from: Monoriu on May 20, 2015, 06:01:08 PM
That's not a nominal amount.

That might not mean what you think it means.

Quote from: Maximus on May 20, 2015, 03:39:11 PM

Quote from: Razgovory on May 20, 2015, 02:55:05 PM
I have another thought.  If there is already a glut in minimum wage type jobs, would the loss of a small percentage even be noticed?  If say the minimum wage increases, and there is still a glut in these type of low paying jobs, is any harm done?

I'm not an economist, but doesn't elasticity handle the phenomenon you're describing?

I don't know.  Rubber bands can do quite a bit, I don't know their roll in economics beyond rolling up news papers (that was my first job!).

Quote from: MadImmortalMan on May 20, 2015, 05:54:30 PM
Hmm.


(https://espnfivethirtyeight.files.wordpress.com/2015/05/casselman-datalab-minwage.png?w=610&h=871)

:huh: The COL of San Fran and NYC especially look far too low.

The other way around Timmy.  Minimum wage adjusted for COL.

Quote from: Admiral Yi on May 20, 2015, 06:38:56 PM
The other way around Timmy.  Minimum wage adjusted for COL.

What? :unsure:

The second column is the local minimum wage adjusted for local cost of living.  I.e. someone in Manhattan making minimum wage is equivalent to earning 3.86 in Averageville.

Quote from: Admiral Yi on May 20, 2015, 06:44:45 PM
The second column is the local minimum wage adjusted for local cost of living.  I.e. someone in Manhattan making minimum wage is equivalent to earning 3.86 in Averageville.

Ah, gotcha. Thanks. :)

What can really help LA avoid unemployment is that so much of its workforce consists of immigrants. If jobs are reduced, they will presumably stop coming and are more likely to move away.

LA is already overcrowded, so that sounds like a win/win.

Quote from: Admiral Yi on May 20, 2015, 06:38:56 PM
The other way around Timmy.  Minimum wage adjusted for COL.

Nice to see my Austin money goes farther.