Repub senator calls for conditional $15 min. wage

[Fuzzy Necromancer]

I would like to put forth a concern I heard on this and get opinions.

Is the timing of raising the minimum wage right? Many places are still closed or on limited workforce. If you raise the bar before they can reopen, won't they need to bring back less or none of the people that had been working beforehand? Thus stalling the economy?

My analogy is you have an engine that is sputtering. You ease on the throttle to get it running then tune things. This would be like stomping on the gas and hoping it does not die.

Consider the other end of the equation. Evictions are skyrocketing, homelessness threatens for many, and utilities are spiking like a field of cacti. If people on the lower rungs of the economic ladder can't get better pay, they won't last long. If they do get decent pay, they'll pump it into a lot of long-delayed expenses.

On top of that, for all the talk about how it will hurt jobs or make hamburgers cost $20, wages amount to a shockingly small part of business expenses. The reason they don't pay more isn't because they are struggling or they have the maximum staff already, it's because they don't have to.

[BridgeConsoleMasher]

I disagree there a difference from a local small business having to make cute to keep the lights on versus a multi billion dollar company ripping off it employees so those at the very tops can get even more money

So then you create an environment where small business can outcompete large businesses in regards to wages. As was pointed out, the large businesses will simply dissolve into smaller, yet still connected parts and you've done noone a favour. But there's also another factor there:

It's not unheard of to give subsidy to more diminutive businesses or economies as a matter specifically for development. Whether it's negative taxes or duty favoring is somewhat arbitrary, and a bracketed minimum wage structure is considerably measured.

It's not very comparable the marketing of a big business to a small one. It's like comparing an ocean liner traveling in the pacific to the US military branch of operations in Micronesia.

Negative taxes or subsidies are considerably different to different base minimal wages for the otherwise same work. The former does not impact the outcome for the worker, the later does. And the later's outcome is what you wanted to adress in the first place, remember? You wanted to improve it, but you'd make it worse instead.

You're right, they are different. Subsidies and tax breaks give businesses a boost. While taxes and price floors etc... lead to general inefficiency to a considerable degree. Small businesses benefit directly from the first but only indirectly with the second. This can be a much more measured approach to regulate a competitive market. Both methods however can easily appreciate the complexities that go into a developing business especially when economies of and returns to scale are not as exploitable.

It's not as if the effects disappear, but corporate hq closing shop in the area isn't as personally dramatic as a local shop going bankrupt though.

There's also the matter of the hyperbolic role that inflated administration/ceo costs generate. As long as they dance around where supply meets demand in each locality then they can more easily develop their internal structure, and it's eerie as far as common understanding of business and wealth transfers go. Indeed it is somewhat controversial.

Sports teams for universities are considered to have inflated budgets that can be going to more important things, but then I read in the university magazine a response supporting the decision, saying that the football team actually brings back the money and then some.

Generally textbooks and college tuition is inflated, and it's a direct result of inflating production/administration cost to a highly elastic demand curve. It's a major political issue getting traction.

It's kind of a vacuum, and it represents a side to business that both conservatives and liberals almost kind of meet on.

[Fuzzy Necromancer]

Business ownership is a privilege, not a right. If you pay your employees so little they need government assistance, then you don't deserve to run a business.

Because someone is being given a wage that is less tan what you think is acceptable, does not mean that person is being wronged. The work performed needs to have a value greater than the wage (due to the non-wage costs of employing someone). The purpose of a business to sell goods and services, it is not to employ people at wages that you think satisfy your moral principles. If you think it is then you are welcome to start a business and apply your morality to it.

There is a right to own a business as long as the owner can consistently keep expenditures less than revenues. If the worker is satisfied with the wages received, then who are you to object? If the worker is not satisfied, then they they are free to seek a better job, and again, who are you to have a say? It is quite easy for you to judge when you do not have to make the hard choices to balance a business' ledger. Introducing price controls of any sort, including wages, will have perverse consequences and is generally not the kind of authority politicians should be given. They are generally are much less capable than they think, if they are not corrupt.

Wages are a business expense. If you can't afford the expense, you can't run the business.

[Nealithi]

I would like to put forth a concern I heard on this and get opinions.

Is the timing of raising the minimum wage right? Many places are still closed or on limited workforce. If you raise the bar before they can reopen, won't they need to bring back less or none of the people that had been working beforehand? Thus stalling the economy?

My analogy is you have an engine that is sputtering. You ease on the throttle to get it running then tune things. This would be like stomping on the gas and hoping it does not die.

Consider the other end of the equation. Evictions are skyrocketing, homelessness threatens for many, and utilities are spiking like a field of cacti. If people on the lower rungs of the economic ladder can't get better pay, they won't last long. If they do get decent pay, they'll pump it into a lot of long-delayed expenses.

On top of that, for all the talk about how it will hurt jobs or make hamburgers cost $20, wages amount to a shockingly small part of business expenses. The reason they don't pay more isn't because they are struggling or they have the maximum staff already, it's because they don't have to.

I thought that was part of the issue in the question and you answered elsewhere.
If businesses are only just reopening and bringing in workers. Thus letting them get back to earning wages at all. The sudden increase of what must be paid can have the business not hiring as many back or even closing their doors. Then what happens to those needing the employment?

I agree buying power sucks. The value of currency is diminishing while wages remain static for too long. I also see other consequences. If only large companies have to pay an increased wage in the US. What keeps them in the US? We hear about sweat shops in other countries and outsourcing. How do we encourage business to remain and do business instead of jumping ship to the next cheap labor market?

[TGLS]

We hear about sweat shops in other countries and outsourcing. How do we encourage business to remain and do business instead of jumping ship to the next cheap labor market?

Source

Let's be generous and say minimum wage jobs are evenly distributed (they're not, an entire section is the self-employed). Which jobs can be moved? Manufacturing might be (the hyper-automated 10-man factories of the modern world seem to defray the cost of labor), Construction, Farming, and Mining probably can't. And now we're left with the elephant in the room: Services. I'm willing to wager that the jobs that can be moved in Services (Business Services, Creative, Finance, IT) are not the ones that are paying minimum wage (Retail, Hospitality, Transport).

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Now with regard to the argument that some places simply might just fold, I can see the concern there. Restaurants haven't been doing well because of the whole pandemic situation. I think 15 USD is pretty high too. I think a better long-term move would be to compromise on a lower minimum wage increase (11-12 USD?), but also add language that pegs the minimum wage to wage inflation.

[Nealithi]

We hear about sweat shops in other countries and outsourcing. How do we encourage business to remain and do business instead of jumping ship to the next cheap labor market?

Source

Let's be generous and say minimum wage jobs are evenly distributed (they're not, an entire section is the self-employed). Which jobs can be moved? Manufacturing might be (the hyper-automated 10-man factories of the modern world seem to defray the cost of labor), Construction, Farming, and Mining probably can't. And now we're left with the elephant in the room: Services. I'm willing to wager that the jobs that can be moved in Services (Business Services, Creative, Finance, IT) are not the ones that are paying minimum wage (Retail, Hospitality, Transport).

---

Now with regard to the argument that some places simply might just fold, I can see the concern there. Restaurants haven't been doing well because of the whole pandemic situation. I think 15 USD is pretty high too. I think a better long-term move would be to compromise on a lower minimum wage increase (11-12 USD?), but also add language that pegs the minimum wage to wage inflation.

Glad you said probably on those other three because I have heard where some are trying to bring in labor for things like construction.

But the part I agree with and think belongs on wages in general not just minimum wage is an annual cost of living increase that is separate from any other increase and is mandatory.

[Riedquat]

Some people here bothered about the idea of having to pay enough of a wage that it doesn't have to be made up by government to survive? Which is (a) saying governments should subsidise businesses (admittedly a positioin with pros and cons on either side, but it should be at least made clear), and (b) where do you draw the line? "Hey, we provide our slaves with food and shelter, they'd starve or freeze if they weren't slaves!"?

[Fuzzy Necromancer]

I would like to put forth a concern I heard on this and get opinions.

Is the timing of raising the minimum wage right? Many places are still closed or on limited workforce. If you raise the bar before they can reopen, won't they need to bring back less or none of the people that had been working beforehand? Thus stalling the economy?

My analogy is you have an engine that is sputtering. You ease on the throttle to get it running then tune things. This would be like stomping on the gas and hoping it does not die.

Consider the other end of the equation. Evictions are skyrocketing, homelessness threatens for many, and utilities are spiking like a field of cacti. If people on the lower rungs of the economic ladder can't get better pay, they won't last long. If they do get decent pay, they'll pump it into a lot of long-delayed expenses.

On top of that, for all the talk about how it will hurt jobs or make hamburgers cost $20, wages amount to a shockingly small part of business expenses. The reason they don't pay more isn't because they are struggling or they have the maximum staff already, it's because they don't have to.

I thought that was part of the issue in the question and you answered elsewhere.
If businesses are only just reopening and bringing in workers. Thus letting them get back to earning wages at all. The sudden increase of what must be paid can have the business not hiring as many back or even closing their doors.

I'd argue it won't, because they still need a certain amount of people to operate. Short-staffing and then asking people to come in on their days off or just having one person do the work of three very badly. If they could get away with cutting more, they would. The reason they won't just up and close doors is because there's still demand, and they'd rather make less money in that market than no money at all.

Same thing with the sweat shops. If they could outsource more of the work, they would have already done so.

[Mickey_Rat15]

Business ownership is a privilege, not a right. If you pay your employees so little they need government assistance, then you don't deserve to run a business.

Because someone is being given a wage that is less tan what you think is acceptable, does not mean that person is being wronged. The work performed needs to have a value greater than the wage (due to the non-wage costs of employing someone). The purpose of a business to sell goods and services, it is not to employ people at wages that you think satisfy your moral principles. If you think it is then you are welcome to start a business and apply your morality to it.

There is a right to own a business as long as the owner can consistently keep expenditures less than revenues. If the worker is satisfied with the wages received, then who are you to object? If the worker is not satisfied, then they they are free to seek a better job, and again, who are you to have a say? It is quite easy for you to judge when you do not have to make the hard choices to balance a business' ledger. Introducing price controls of any sort, including wages, will have perverse consequences and is generally not the kind of authority politicians should be given. They are generally are much less capable than they think, if they are not corrupt.

Wages are a business expense. If you can't afford the expense, you can't run the business.

Not being able to cover expenses resulting from market forces is evidence of a bad business model.
Not being able to cover expenses that result from the whims of ignoramus politicians and their myrmidon supporter, who do not have to consider how those expenses can be covered is evidence of a failure of government.

[Fuzzy Necromancer]

The need for a living wage is a market force. If you don't have a sufficient minimum wage, then the business is already being subsidized by the government with food stamps and other services that the underpaid workers need to get by.