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I think the effects of price stickiness (on goods and labor) aren’t being adequately considered in these discussions. Yes, these restaurants could raise their w
by fshbbdssbbgdd 6y ago
I think the effects of price stickiness (on goods and labor) aren’t being adequately considered in these discussions. Yes, these restaurants could raise their wages to compete with unemployment, and many have. They’ll also need to raise their prices, which they have leeway to do, because everyone is facing the same costs.
The problem occurs in a few months when the bonus unemployment runs out. Then there will be millions more people looking for work. At that point, expanding employers will be able to hire at lower wages again. They’ll also be able to offer goods at lower prices. Employers who stepped up to pay higher wages won’t be able to compete. They’ll need to cut prices and cut wages or lay people off. That will be painful, which makes holding out until wages lower more attractive.
Employers can get around this by offering signing bonuses instead of higher wages, but they need to be large to compete with unemployment checks, and it may not make sense to do that for a few months of work.
These conditions may present a unique opportunity for policymakers to increase employment by raising the minimum wage.
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- runako 6y ago> The problem occurs in a few months when the bonus unemployment runs out. Then there will be millions more people looking for work. Maybe this won't happen? Unemployment is officially at 6%. Better-capitalized firms have hired a ton of people over the last year. It's possible that marginal businesses like the weaker local restaurants mentioned in this thread will just have to adapt. Besides, given that their jobs are apparently so crappy that they are losing employees to the likes of McDonalds, certainly they have high turnover. If a labor glut happens, they can just lower wages and deal with the resulting turnover, which they already know how to handle.
- kukx 6y agoRising the minimum wage is exactly the thing that should not be done, if one cares about the employment levels. It prices out the least qualified workforce of the market. To put it simply the less able/educated/experienced are not productive enough to cover own costs. So that no one wants to employ them and they are stuck. They start to rely on the government to provide them with resources and it means that have to vote for politicians that promise to keep the free money flowing. It creates a perverse relation between politicians and citizens, which may resemble a dealer addict situation.
- 8note 6y agoRealistically, GDP has grown substantially with the owners receiving nearly all the benefits. Raising the minimum wage is unlikely to affect employment much because of just how profitable companies are today Mind you I think a better tslternative to a specific minimum wage is to have a guaranteed government job at a specific wage. That sets a bar that all labourers have an option, while some lower paying jobs can still exist if they're otherwise competitive in other experiences
- saddlerustle 6y agoCorporate profits as a fraction of GDP hasn't changed much.
- wonnage 6y agoJust remember that very sane corporation in the US does their very best to realize their profits outside of the US.
- tastyfreeze 6y agoOh how I wish this was a more popular view. Minimum wages have a history of exluding a group of people from employment to protect the higher wage earners jobs. Minimum wage absolutely prices some people out of the job market.
- deleted 6y ago[deleted]