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Some considerations of the minimum wage movement: 1) The higher it gets the more likely and quicker the minimum wage jobs will be replaced by AI/robots/automat

Some considerations of the minimum wage movement: 1) The higher it gets the more likely and quicker the minimum wage jobs will be replaced by AI/robots/automation. 2) The cost gets passed on to the consumer. So if everything costs more and everyone is paying more in taxes, that's not good either. Some companies may keep prices the same and take from profits, but the lower the margins, the less attractive creating and running a business becomes. 3) What works in one area like Seattle won't necessarily work across the country. There has to be a sweet spot in each area and we have to be honest with ourselves to say that the feel-goodness of a higher minimum wage does have its limits. And that limit is what we are debating. We don't need to do a study to know that a $50/hr minimum wage is unreasonable. In any given city, what minimum wage provides fairness for individuals, businesses AND the local economy as a whole? And how can we develop a model framework for cities across the country to use?

openasocket 9y ago
Except it's already like that. If we don't pay workers a living wage they have to use our social safety net programs, such as food stamps. Those programs are funded by the tax payer. So basically the tax payers are already subsidizing companies like Walmart so they don't have to pay a full living wage to their employees. If those companies paid them a full wage the taxpayers would pay less for social welfare programs. I'm also not that sympathetic to the plight of companies like McDonald's when it is earning in excess of $4B in profit in a year. Obviously, what counts as a fair wage will depend on the local cost of living.
- exclusiv 9y ago
  That's a good insight. I agree with that point and think every city should propose laws that support a living wage. We just need to understand what that living wage should be in any given city and consider a variety of factors, some short term and some long term. > If those companies paid them a full wage the taxpayers would pay less for social welfare programs. Maybe. That assumes the poverty line stays the same and nothing happens with the price of other goods those minimum wage earners need to buy. It also assumes there's no impact on 1) number of jobs and 2) number of hours and thus total income as the UW study discusses. As long as part time employee is allowed you cannot guarantee an income for any given job. So a min. hourly wage doesn't definitively solve the problem of mandating a fair wage as we are discussing. > I'm also not that sympathetic to the plight of companies like McDonald's when it is earning in excess of $4B in profit in a year. Me either. But McDonalds has already shown a long time ago that they can eliminate min. wage jobs and/or hours by getting consumers to throw away their trash and fill up their own drinks. This is part of the consideration #1 I mentioned.
sedachv 9y ago
> The cost gets passed on to the consumer. So if everything costs more What you are describing is a mythical concept that in economics is called the "price/wage spiral." This is not what actually happens (indeed one of Friedman's central theses was that inflation is driven by monetary policy and not by wage increases or increases in the price of natural resources). There are a bunch of factors that come into play - in a competitive market the salary increases would not be passed on to the consumer but would come from the profit of the business owners, increased automation, product and service substitution, etc.
- exclusiv 9y ago
  I mentioned it could come from the profit too. If you're a business owner you can forego your margins to account for added costs and run it the exact same. Some businesses like cosmetics have a lot of room to play with. Some don't and it becomes less attractive to be a business owner, having employees, legal risks, lines of credit, etc. However, many businesses simply respond by upping the price on their menu or adding a surcharge. The price the consumer pays for the same good they received before is now higher. How is that mythical?
  - chillwaves 9y ago
    The myth is the relationship between the price increase and wage increase. There are more cost inputs than just labor and of course the consideration of profits. It's true the price of goods may rise, but relative to the increase in wages to workers, it will be a net win for redistributing wealth to the lowest earners, with the cost born by the variety of cost inputs (and profit) for the business. The second argument is that shifting money towards the lowest earning group will stimulate economic activity and unlock more wealth potential for the local market, thereby in some ways compensating for the increased prices by bringing more prosperity for all. That's not to argue that increasing wages always results this way, just like one would not argue that you can boost the economy by simply reducing or abolishing the min. wage.
    - exclusiv 9y ago

openasocket 9y ago

Except it's already like that. If we don't pay workers a living wage they have to use our social safety net programs, such as food stamps. Those programs are funded by the tax payer. So basically the tax payers are already subsidizing companies like Walmart so they don't have to pay a full living wage to their employees. If those companies paid them a full wage the taxpayers would pay less for social welfare programs. I'm also not that sympathetic to the plight of companies like McDonald's when it is earning in excess of $4B in profit in a year. Obviously, what counts as a fair wage will depend on the local cost of living.

exclusiv 9y ago
That's a good insight. I agree with that point and think every city should propose laws that support a living wage. We just need to understand what that living wage should be in any given city and consider a variety of factors, some short term and some long term. > If those companies paid them a full wage the taxpayers would pay less for social welfare programs. Maybe. That assumes the poverty line stays the same and nothing happens with the price of other goods those minimum wage earners need to buy. It also assumes there's no impact on 1) number of jobs and 2) number of hours and thus total income as the UW study discusses. As long as part time employee is allowed you cannot guarantee an income for any given job. So a min. hourly wage doesn't definitively solve the problem of mandating a fair wage as we are discussing. > I'm also not that sympathetic to the plight of companies like McDonald's when it is earning in excess of $4B in profit in a year. Me either. But McDonalds has already shown a long time ago that they can eliminate min. wage jobs and/or hours by getting consumers to throw away their trash and fill up their own drinks. This is part of the consideration #1 I mentioned.

sedachv 9y ago

> The cost gets passed on to the consumer. So if everything costs more What you are describing is a mythical concept that in economics is called the "price/wage spiral." This is not what actually happens (indeed one of Friedman's central theses was that inflation is driven by monetary policy and not by wage increases or increases in the price of natural resources). There are a bunch of factors that come into play - in a competitive market the salary increases would not be passed on to the consumer but would come from the profit of the business owners, increased automation, product and service substitution, etc.

exclusiv 9y ago
I mentioned it could come from the profit too. If you're a business owner you can forego your margins to account for added costs and run it the exact same. Some businesses like cosmetics have a lot of room to play with. Some don't and it becomes less attractive to be a business owner, having employees, legal risks, lines of credit, etc. However, many businesses simply respond by upping the price on their menu or adding a surcharge. The price the consumer pays for the same good they received before is now higher. How is that mythical?
- chillwaves 9y ago
  The myth is the relationship between the price increase and wage increase. There are more cost inputs than just labor and of course the consideration of profits. It's true the price of goods may rise, but relative to the increase in wages to workers, it will be a net win for redistributing wealth to the lowest earners, with the cost born by the variety of cost inputs (and profit) for the business. The second argument is that shifting money towards the lowest earning group will stimulate economic activity and unlock more wealth potential for the local market, thereby in some ways compensating for the increased prices by bringing more prosperity for all. That's not to argue that increasing wages always results this way, just like one would not argue that you can boost the economy by simply reducing or abolishing the min. wage.
  - exclusiv 9y ago