10 ms·

House passes bill to hike the federal minimum wage to $15 per hour

41 points by valinsky 7y ago

Jolter 7y ago
So how much of today's dollar is $15 going to be worth in 2025? I mean, I think it's great, but it should have been sooner and/or more.
- NamTaf 7y ago
  Assuming 3% inflation per year, it'll be $15/1.03^6 (6 years), or about $12.56 in today's dollars.
luxuryballs 7y ago
Effectively banning/exporting any jobs that aren’t productive enough to be worth paying as much. Price fixing always creates shortages and is an inefficient way of allocating resources. Less people will be hired, businesses will go under. Stupid idea and should be a constitutional violation, you should have the right to work for whatever wage you want.
- Liron 7y ago
  Right, plus there are plenty of Americans who want to work for say $13/hr if the job is a rewarding one. The current federal minimum wage of $7.25 is arguably low enough to raise somewhat because why not, but $15/hr is clearly high relative to the current supply/demand equilibrium.
  - mac01021 7y ago
    They can still work for less as a contractor, if they want, right?
    - desdiv 7y ago
      Whether someone is an employee vs a contractor solely depends on the "economic reality" of their job. Neither the employer nor the employee can choose to have it classified as a contractor relationship if it isn't actually one. For example, if Subway determines how, where, and when I make the sandwiches, and provides all the equipment and materials, then I am a de facto employee. Even if both Subway and myself voluntarily agrees that I am a contractor for whatever reason (sidestepping minimum wage laws in this case), and signs a service contract to that effect, I am still treated as an employee under the Fair Labor Standards Act. [0] https://www.dol.gov/whd/workers/Misclassification/misclassification-facts.pdf https://www.dol.gov/whd/workers/Misclassification/misclassif... [1] https://www.dol.gov/whd/regs/compliance/whdfs13.htm https://www.dol.gov/whd/regs/compliance/whdfs13.htm
      - NotSammyHagar 7y ago
        I disagree completely that employees and employers can't choose whether they are contractors. It's almost always better for companies to hire contractors, that's why they work really hard to structure it that way (see uber). Employees are more mixed in their preferences, but in my long career as a dev I've seen that being an employee is better than being a contractor.
  - syshum 7y ago
    It seems market forces are already working to do that with out the need for government intervention. Many Companies (walmart, Amazon, Target, etc) have all raised their companies minimum starting wage to well above the federal minimum, some even to $15 This is correct way for wages to raise, not by government demand
    - londons_explore 7y ago
      I suspect those companies have raised their minimum wages not because of the local labor market, but instead because of nationwide PR risks. That is just as bad as a law really. The companies will end up employing fewer people at higher wages, while other people end up unemployed, and the total nationwide labor salary gets reduced.
  - NotSammyHagar 7y ago
    Another reason to increase the minimum wage is to reduce the number of workers who get such low wages that we give them welfare on top of their low wages so they can survive. We already have the situation that Walmart was kind of shamed into paying higher wages; huge amounts of their employees had their wages "subsidized" because their employees were on welfare! This isn't good for anyone. [1] 2014: walmart employees get 6.2 billion in public assistance. [2] 2018 thousands of amazon employees get welfare. Article 2 says paying a living wage (a higher minimum wage) could save 150 billion in government benefits. [3] 2015 Americans pay 153 billion in public assistance for low wage jobs at McD and Walmart. Underlying research in [4]. 1. 2014 https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#4bce7bd0720b https://www.forbes.com/sites/clareoconnor/2014/04/15/report-... 2. 2018 https://www.washingtonpost.com/business/2018/08/24/thousands-amazon-workers-receive-food-stamps-now-bernie-sanders-wants-amazon-pay-up/?noredirect=on&utm_term=.3c5c0b3d2fdf https://www.washingtonpost.com/business/2018/08/24/thousands... 3. 2015 https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/?utm_term=.ee881afb30b0 https://www.washingtonpost.com/posteverything/wp/2015/04/15/... 4. http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/ http://laborcenter.berkeley.edu/the-high-public-cost-of-low-...
  - undersuit 7y ago
    What about $8.40/hr for the current supply/demand? >$8.40 in 2019, $9.50 in 2020, $10.60 in 2021, $11.70 in 2022, $12.80 in 2023, $13.90 in 2024 and $15 in 2025.
- deleted 7y ago
  [deleted]
- tonyedgecombe 7y ago
  Those arguments were bandied about when the minimum wage was introduced in the UK. They turned out to be false.
crb002 7y ago
Counterpoint those making $10 an hour are on Medicaid and employers are freeloaders. Help if Medicaid had a 5% wage garnishment and all could be on it; just those making $$$ would scoff and take lower cost private insurance.
- crb002 7y ago
  IMHO this would be in alignment with SCOTUS ruling that the US Affordable Care Act mandate is a tax.
exabrial 7y ago
I'm starting to miss the days when people are buying votes with their own money instead of other people's money. /s I hope Congress also doubles all pour savings as well, because the purchasing power of those is about to be diminished.
- rayiner 7y ago
  The purchasing power angle makes no sense. Purchasing power will only be diminished if you increase the total money supply. Minimum wage won’t do that.
  - rjf72 7y ago
    Bloomberg ran a nice piece on what it's like to own a McDonald's franchise here [1]. The raw numbers sound nice - $2.7 million gross, $1.8 million in gross profit. But after your various expenses come into play, the honeymoon ends - you end up taking home about $150k for a mountain of work that's required to keep a franchise running in good shape. You're buying a job. The reason this matters is because those numbers are is pretty representative of many regular businesses; well outside 'our' world of VC driven mutual lotteries. You're taking home $150k yourself, but you're paying $540k in crew (non-managerial) payroll. And many of these guys are at or near minimum wage. Increase their wages just 30% (and going from $7.25 to $15 is a > 100% increase) would cost you $162k. And now you're losing money. And McDonalds are pretty primo in terms of profit. Life's often much harder for for the countless no-name businesses out there. It's the really counter intuitive nature of business. A company can make millions, yet have owner(s) that are, out of necessity, living relatively modestly. So imagine your labor costs skyrocket. What do you do? You really don't have any options. You increase prices or you go out of business. This seems likely to have a paradoxical effect. It means company with large profit margins are fine, but you squeeze the very low profit margin companies. And the low profit margins companies tend to have low profit margins because they're providing products at extremely cost to cost. E.g. company selling $50 steaks = no problem. Company selling $1 tacos = problem. So the very businesses who are doing to their most to cater to lower income people end up being the most negatively affected. Of course now their customers can afford to pay more, but that's precisely the definition of a reduction in a purchasing power per dollar. [1] - https://www.bloomberg.com/features/2015-mcdonalds-franchises/ https://www.bloomberg.com/features/2015-mcdonalds-franchises...
harryh 7y ago
It's important to note that there is a ~0% chance that this will pass the Senate or that the current President would sign it. This is best discussed as politics and not policy.
- toomuchtodo 7y ago
  Correct. It will apply substantial political pressure on Mitch McConnell, as everyone who would see a benefit (anyone making under $15/hr) is unable to if he won't bring it up for a vote.
  - marcusverus 7y ago
    It will apply zero political pressure to Mitch McConnel. Even if Dems had the Senate, the would still face a presidential veto. This isn’t an issue of one man preventing a change. Dems only control 1 of the 3 institutions required to pass this law.
    - toomuchtodo 7y ago
      He’s running for re-election in 2020. Amy McGrath [1], the democratic challenger, is polling within two percentage points of him. There are more lower income voters than wealthy conservatives in Kentucky. Of course nothing will happen today, it’s for campaigning. [1] https://twitter.com/AmyMcGrathKY https://twitter.com/AmyMcGrathKY
      - harryh 7y ago
        That's much closer than I would have guessed. What poll is this?
        toomuchtodo 7y ago
        Was just referenced in a Ditch Mitch PAC marketing email that went out an hour ago. I've contacted their team to ask for a citation and will report back with it when I receive it. EDIT @ 1563753486: http://kentuckytoday.com/stories/mcgrath-comes-out-firing-in-battle-for-mcconnells-seat,20426 http://kentuckytoday.com/stories/mcgrath-comes-out-firing-in... “Change Research conducted a poll of 1,629 likely 2020 voters in Kentucky from June 15-16 and found that retired Marine Amy McGrath is already essentially tied with Senator Mitch McConnell in a hypothetical 2020 general election Senate matchup, despite half of Kentucky voters not even having an opinion of her yet. If the election were held today, 47% would vote for McConnell compared to 45% for McGrath, a deficit well within the margin of error. Ayoub added, “Senator McConnell is extremely unpopular in Kentucky, with 22% viewing him favorably and 61% viewing him unfavorably. Even among Republicans, roughly as many view him favorably (40%) as unfavorably (39%). This stands in stark contrast to other prominent Republicans like President Trump, who is overall well-liked in Kentucky (58% favorable, 40% unfavorable) and nearly universally beloved among Republicans (92% favorable, 4% unfavorable)."
joey_bob 7y ago
How might a $15 minimum wage might affect the current (engineering) internship system? Almost every non-software engineer I know earned $15, or marginally more, during undergraduate for internships related to their field. If minimum wage jobs are price-competitive with an internship, what is the impact? Will large employers of engineers raise internship pay? Will they continue to hire as many interns?
- gwright 7y ago
  I don't think engineering internships are price-competitive with minimum wage jobs. So I wouldn't expect any direct impact. Perhaps an indirect impact though, especially if the company overall is dependent on minimum wage labor in other areas (i.e. the business is less profitable and so overall budgets change to address the changed business model). So that might show up as 1 intern vs. 2, for example. Another example of how an increased minimum wage might reduce overall job openings.
- NotSammyHagar 7y ago
  $15/hour would be unlikely to have any impact on engineering internship wages, it's far too low. $15/hr is $31k per annum. 20 years ago we paid interns a pro rated wage higher than that! Today we pay our interns a pro-rated wage over 80k at the startup where I work. Are there any engineering interns paid such low wages in the western world? Double or trip $15 and you might have some impact.
  - cr1895 7y ago
    >Are there any engineering interns paid such low wages in the western world? Yes, absolutely: your experience is certainly not everyone's. The 80k salary for an intern sounds nuts to me...in the Netherlands, interns in my engineering field usually make less than minimum wage. Usually it's a few hundred euros per month. Most full-time, experienced engineers in the entire country earn a whole lot less than $80k.

41 points by valinsky 7y ago

So how much of today's dollar is $15 going to be worth in 2025? I mean, I think it's great, but it should have been sooner and/or more.

NamTaf 7y ago
Assuming 3% inflation per year, it'll be $15/1.03^6 (6 years), or about $12.56 in today's dollars.

luxuryballs 7y ago

Effectively banning/exporting any jobs that aren’t productive enough to be worth paying as much. Price fixing always creates shortages and is an inefficient way of allocating resources. Less people will be hired, businesses will go under. Stupid idea and should be a constitutional violation, you should have the right to work for whatever wage you want.

Liron 7y ago
Right, plus there are plenty of Americans who want to work for say $13/hr if the job is a rewarding one. The current federal minimum wage of $7.25 is arguably low enough to raise somewhat because why not, but $15/hr is clearly high relative to the current supply/demand equilibrium.
- mac01021 7y ago
  They can still work for less as a contractor, if they want, right?
  - desdiv 7y ago
    Whether someone is an employee vs a contractor solely depends on the "economic reality" of their job. Neither the employer nor the employee can choose to have it classified as a contractor relationship if it isn't actually one. For example, if Subway determines how, where, and when I make the sandwiches, and provides all the equipment and materials, then I am a de facto employee. Even if both Subway and myself voluntarily agrees that I am a contractor for whatever reason (sidestepping minimum wage laws in this case), and signs a service contract to that effect, I am still treated as an employee under the Fair Labor Standards Act. [0] https://www.dol.gov/whd/workers/Misclassification/misclassification-facts.pdf https://www.dol.gov/whd/workers/Misclassification/misclassif... [1] https://www.dol.gov/whd/regs/compliance/whdfs13.htm https://www.dol.gov/whd/regs/compliance/whdfs13.htm
    - NotSammyHagar 7y ago
      I disagree completely that employees and employers can't choose whether they are contractors. It's almost always better for companies to hire contractors, that's why they work really hard to structure it that way (see uber). Employees are more mixed in their preferences, but in my long career as a dev I've seen that being an employee is better than being a contractor.
- syshum 7y ago
  It seems market forces are already working to do that with out the need for government intervention. Many Companies (walmart, Amazon, Target, etc) have all raised their companies minimum starting wage to well above the federal minimum, some even to $15 This is correct way for wages to raise, not by government demand
  - londons_explore 7y ago
    I suspect those companies have raised their minimum wages not because of the local labor market, but instead because of nationwide PR risks. That is just as bad as a law really. The companies will end up employing fewer people at higher wages, while other people end up unemployed, and the total nationwide labor salary gets reduced.
- NotSammyHagar 7y ago
  Another reason to increase the minimum wage is to reduce the number of workers who get such low wages that we give them welfare on top of their low wages so they can survive. We already have the situation that Walmart was kind of shamed into paying higher wages; huge amounts of their employees had their wages "subsidized" because their employees were on welfare! This isn't good for anyone. [1] 2014: walmart employees get 6.2 billion in public assistance. [2] 2018 thousands of amazon employees get welfare. Article 2 says paying a living wage (a higher minimum wage) could save 150 billion in government benefits. [3] 2015 Americans pay 153 billion in public assistance for low wage jobs at McD and Walmart. Underlying research in [4]. 1. 2014 https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#4bce7bd0720b https://www.forbes.com/sites/clareoconnor/2014/04/15/report-... 2. 2018 https://www.washingtonpost.com/business/2018/08/24/thousands-amazon-workers-receive-food-stamps-now-bernie-sanders-wants-amazon-pay-up/?noredirect=on&utm_term=.3c5c0b3d2fdf https://www.washingtonpost.com/business/2018/08/24/thousands... 3. 2015 https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/?utm_term=.ee881afb30b0 https://www.washingtonpost.com/posteverything/wp/2015/04/15/... 4. http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/ http://laborcenter.berkeley.edu/the-high-public-cost-of-low-...
- undersuit 7y ago
  What about $8.40/hr for the current supply/demand? >$8.40 in 2019, $9.50 in 2020, $10.60 in 2021, $11.70 in 2022, $12.80 in 2023, $13.90 in 2024 and $15 in 2025.
deleted 7y ago
[deleted]
tonyedgecombe 7y ago
Those arguments were bandied about when the minimum wage was introduced in the UK. They turned out to be false.

crb002 7y ago

Counterpoint those making $10 an hour are on Medicaid and employers are freeloaders. Help if Medicaid had a 5% wage garnishment and all could be on it; just those making $$$ would scoff and take lower cost private insurance.

crb002 7y ago
IMHO this would be in alignment with SCOTUS ruling that the US Affordable Care Act mandate is a tax.

exabrial 7y ago

I'm starting to miss the days when people are buying votes with their own money instead of other people's money. /s I hope Congress also doubles all pour savings as well, because the purchasing power of those is about to be diminished.

rayiner 7y ago
The purchasing power angle makes no sense. Purchasing power will only be diminished if you increase the total money supply. Minimum wage won’t do that.
- rjf72 7y ago
  Bloomberg ran a nice piece on what it's like to own a McDonald's franchise here [1]. The raw numbers sound nice - $2.7 million gross, $1.8 million in gross profit. But after your various expenses come into play, the honeymoon ends - you end up taking home about $150k for a mountain of work that's required to keep a franchise running in good shape. You're buying a job. The reason this matters is because those numbers are is pretty representative of many regular businesses; well outside 'our' world of VC driven mutual lotteries. You're taking home $150k yourself, but you're paying $540k in crew (non-managerial) payroll. And many of these guys are at or near minimum wage. Increase their wages just 30% (and going from $7.25 to $15 is a > 100% increase) would cost you $162k. And now you're losing money. And McDonalds are pretty primo in terms of profit. Life's often much harder for for the countless no-name businesses out there. It's the really counter intuitive nature of business. A company can make millions, yet have owner(s) that are, out of necessity, living relatively modestly. So imagine your labor costs skyrocket. What do you do? You really don't have any options. You increase prices or you go out of business. This seems likely to have a paradoxical effect. It means company with large profit margins are fine, but you squeeze the very low profit margin companies. And the low profit margins companies tend to have low profit margins because they're providing products at extremely cost to cost. E.g. company selling $50 steaks = no problem. Company selling $1 tacos = problem. So the very businesses who are doing to their most to cater to lower income people end up being the most negatively affected. Of course now their customers can afford to pay more, but that's precisely the definition of a reduction in a purchasing power per dollar. [1] - https://www.bloomberg.com/features/2015-mcdonalds-franchises/ https://www.bloomberg.com/features/2015-mcdonalds-franchises...

harryh 7y ago

It's important to note that there is a ~0% chance that this will pass the Senate or that the current President would sign it. This is best discussed as politics and not policy.

toomuchtodo 7y ago
Correct. It will apply substantial political pressure on Mitch McConnell, as everyone who would see a benefit (anyone making under $15/hr) is unable to if he won't bring it up for a vote.
- marcusverus 7y ago
  It will apply zero political pressure to Mitch McConnel. Even if Dems had the Senate, the would still face a presidential veto. This isn’t an issue of one man preventing a change. Dems only control 1 of the 3 institutions required to pass this law.
  - toomuchtodo 7y ago
    He’s running for re-election in 2020. Amy McGrath [1], the democratic challenger, is polling within two percentage points of him. There are more lower income voters than wealthy conservatives in Kentucky. Of course nothing will happen today, it’s for campaigning. [1] https://twitter.com/AmyMcGrathKY https://twitter.com/AmyMcGrathKY
    - harryh 7y ago
      That's much closer than I would have guessed. What poll is this?
      - toomuchtodo 7y ago
        Was just referenced in a Ditch Mitch PAC marketing email that went out an hour ago. I've contacted their team to ask for a citation and will report back with it when I receive it. EDIT @ 1563753486: http://kentuckytoday.com/stories/mcgrath-comes-out-firing-in-battle-for-mcconnells-seat,20426 http://kentuckytoday.com/stories/mcgrath-comes-out-firing-in... “Change Research conducted a poll of 1,629 likely 2020 voters in Kentucky from June 15-16 and found that retired Marine Amy McGrath is already essentially tied with Senator Mitch McConnell in a hypothetical 2020 general election Senate matchup, despite half of Kentucky voters not even having an opinion of her yet. If the election were held today, 47% would vote for McConnell compared to 45% for McGrath, a deficit well within the margin of error. Ayoub added, “Senator McConnell is extremely unpopular in Kentucky, with 22% viewing him favorably and 61% viewing him unfavorably. Even among Republicans, roughly as many view him favorably (40%) as unfavorably (39%). This stands in stark contrast to other prominent Republicans like President Trump, who is overall well-liked in Kentucky (58% favorable, 40% unfavorable) and nearly universally beloved among Republicans (92% favorable, 4% unfavorable)."

joey_bob 7y ago

How might a $15 minimum wage might affect the current (engineering) internship system? Almost every non-software engineer I know earned $15, or marginally more, during undergraduate for internships related to their field. If minimum wage jobs are price-competitive with an internship, what is the impact? Will large employers of engineers raise internship pay? Will they continue to hire as many interns?

gwright 7y ago
I don't think engineering internships are price-competitive with minimum wage jobs. So I wouldn't expect any direct impact. Perhaps an indirect impact though, especially if the company overall is dependent on minimum wage labor in other areas (i.e. the business is less profitable and so overall budgets change to address the changed business model). So that might show up as 1 intern vs. 2, for example. Another example of how an increased minimum wage might reduce overall job openings.
NotSammyHagar 7y ago
$15/hour would be unlikely to have any impact on engineering internship wages, it's far too low. $15/hr is $31k per annum. 20 years ago we paid interns a pro rated wage higher than that! Today we pay our interns a pro-rated wage over 80k at the startup where I work. Are there any engineering interns paid such low wages in the western world? Double or trip $15 and you might have some impact.
- cr1895 7y ago
  >Are there any engineering interns paid such low wages in the western world? Yes, absolutely: your experience is certainly not everyone's. The 80k salary for an intern sounds nuts to me...in the Netherlands, interns in my engineering field usually make less than minimum wage. Usually it's a few hundred euros per month. Most full-time, experienced engineers in the entire country earn a whole lot less than $80k.