10 ms·

I wish someone would stop some of them and ask them: "What do you think will happen if you actually GET $15/hr?" "Do you expect your employer to keep his same

by skrowl 12y ago

I wish someone would stop some of them and ask them: "What do you think will happen if you actually GET $15/hr?" "Do you expect your employer to keep his same prices and same amount of work force and just eat the labor cost?" "What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices of everything you buy suddenly doubled?"

matthewowen 12y ago
Absent overall changes to the competitive forces that drive pricing (which is complex, because this might force some companies to increase prices, which would decrease competition for companies which don't need to, which would allow them to increase prices), and assuming this pricing change doesn't make labor alternatives (eg increasing automation) economically viable, it's actually pretty reasonable to expect employers to eat the labor cost. It's probably the rational thing to see.
Tloewald 12y ago
Every time I visit, say, Macdonalds, I try to figure out how much it would cost to pay everyone in the logistic chain decently. E.g. let's suppose we agree to give 5% extra to Macdonalds at the register to distribute to its employees in some equitable fashion. So my $12 order (two happy meals and a burger, say) costs me an extra $0.60. <10 people are processing something like 200 orders per hour (I suspect it's more like 5 people and 400 orders, I'm guesstimating), so that's $12 for each of them. But let's assume there are another ten people in the logistic chain. So that's $6/h for each of them. Now imagine the flow-on effect to the rest of the economy if people in those horrible jobs had some kind of living wage. I suspect not only would these workers be $6/h better off, I'd probably be better off too.
- bigtunacan 12y ago
  I really don't think the people in these jobs understand the whole picture. I already typically won't establish a McDonald's already because prices have gotten so high. It's cheaper to cook at home. If wages double and prices raise less people are going to eat there and hence less people who are employed. These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class.
  - deleted 12y ago
    [deleted]
  - misterbishop 12y ago
    Huh? If you can't afford to eat at McDonalds, maybe you should be protesting for a higher wage.
    - kefka 12y ago
      Mcdonalds is expensive for the quantity and quality you get. I can make the similar much healthier, tastier, and cheaper than they can.
      - Tloewald 12y ago
        Good grief, I didn't plan to defend Macdonald's, but this sounds delusional to me. If you're trying to get food cheaply, unless your labor is pretty much free and you're incredibly efficient I very much doubt this is true. Assuming I were to prepare a home cooked meal from scratch, the chances I would get away with less than 1h of labor (including driving to markets, shopping, and preparation) alone justifies eating out (at a restaurant, forget Macdonalds). Certainly eating home-cooked food is healthier. And it's probably more delicious. And cooking can be enjoyable, but not as a daily grind. But don't make the cost argument unless your time is free.
        kefka 12y ago
        Don't make the argument "unless your time is free" unless you have 0-turn around time->money converter. Which, your argument is that "Time isn't free, so neener neener", which falls flat in its face. I'm not in the upper, or middle economic class. And making our own food is how we save a great deal of money, and also eating much healthier. We probably could eat on $50/wk for both my wife and I. But it would be junk food and bad calories and malnutrition. Last night, we had shrimp, tilapia, roasted veggies, and a capezzi salad. That would have been ~$40 each out on the town. It cost us $10 for both of us combined. And it was a half hour work for one of us. We can't even work a half hour on no minutes notice.
kushti 12y ago
Probably prices will not be doubled, but even more jobs will be transferred to China / other countries. And the Valley will win as well due to increased demand for automation.
- jarin 12y ago
  Food service workers and laborers are the most likely to be affected by these wage increases. I don't think anyone's going to be driving to China to get a Big Mac or flying in shelf stockers from Shenzhen.
- Kiro 12y ago
  > And the Valley will win as well due to increased demand for automation. You mean a win for humanity. How can anyone be against automation?
  - spacemanmatt 12y ago
    Well, the oft-maligned Luddites were against automation because it was a tool used to cut them out of the income stream. To be absolutely certain, however, they weren't anti-technology, they were anti-getting-screwed.
- misterbishop 12y ago
  Automation is inevitable regardless. Keeping wages low will not prevent McDonalds from implementation labor-saving technologies.
  - Domenic_S 12y ago
    It will dictate when the labor-saving technology is cheaper than cheap human labor. If fast food workers were making $200/hour, it would probably be cheaper to replace them with robots today. Keeping that inflection point far away gives us time to solve other issues (like housing affordability) that will impact the minimum-wage class of workers extremely hard when they're automated out.
  - kushti 12y ago
Partyfists 12y ago
There are a few things in play here that you may not be considering. First this minimum wage increase would probably happen over 5 years like San Francisco and Seattle are doing. So businesses would have time to prepare and it would not go from $9 -> $15. Second, these companies have many costs outside of labor. If labor were to double for just employees making less than $15/hr, the price of everything would not just double. It would have to go up, of course, but it would not double. The final thing to consider is that if every one in the USA is making more money, they will also have more money to spend. This means they are more likely to spend money at these types of businesses thus increasing daily sales for the company. The argument you are making is an extremely common argument from before the minimum wage was instituted decades ago where minimum wage was also (relatively, of course) significantly higher than it is right now. It turns out that people do like to spend money and when they have more of it, they spend more of it.
- Chronic31 12y ago
  You say if everyone is making more money they will have more money to spend, that is blatantly false. If you give everyone in the US a million dollars, do you seriously expect all prices to stay the same?
misterbishop 12y ago
The state already subsidizes the cost of your Big Mac by providing foodstamps and assistance to McDonald's poverty-wage workers. McDonald's had a 'bad' 3rd quarter last year, which means they only made $1B in profit. It was down from 1.5B the previous year. http://www.forbes.com/sites/laurengensler/2014/10/21/mcdonalds-profit-down-30-on-sales-slump/ http://www.forbes.com/sites/laurengensler/2014/10/21/mcdonal... These companies can afford to pay their workers a living wage. It's not a question of whether workers "deserve" one hourly rate or another. The question is whether the working class will continue to tolerate it.
- jerf 12y ago
  "McDonald's had a 'bad' 3rd quarter last year, which means they only made $1B in profit. It was down from 1.5B the previous year.... These companies can afford to pay their workers a living wage." Big number fallacy... you see a big number and it doesn't occur to you to check against the other big numbers that may be involved. Wikipedia has 36,000 franchises worldwide. Assume we're paying about 100 person hours/day for a franchise, assume 360 days in a year, and you get... about 1.3 billion paid hours. (And I suspect I'm being generously conservative with 100 personhours/day for an average franchise, especially when you account for the whole thing, like the shipping and accounting and such.) So, all else being equal (which it never is, but roll with it), and had they paid everyone another $1/hour, they'd be making a loss. You can't just see big profit numbers and go "Oh, they've got money, surely they can pay better!" Capitalism is very efficient (in the conventional sense of the term of "using inputs well") and very competitive, in that McDonalds can't just charge 50% more and nobody changes their buying habits, and it's actually really good at shaving profit margins down to a surprisingly small level, contrary to the numerically-illiterate rhetoric often flung at it. A lot of big corporations make billions a year, but it turns out that when you do the analysis in percentages, they're typically making waaaay less than you think. For instance, here's the 10 most profitable companies in 2013: http://www.usatoday.com/story/money/business/2013/01/20/10-profitable-companies-2013/1848581/ http://www.usatoday.com/story/money/business/2013/01/20/10-p... By #10, "Wal-Mart" (how convenient, a favored bête noire of the labor community), you've got a company pulling in $467 billion in revenue, to make a "mere" $16 billion earnings. That's a 3.4% of their revenue! Yes, it would be a big pile if you just handed it to me personally, but it means that a 4% fuckup at a high enough level would be enough to fry their entire profit. (Do you do your job with 4% tolerance?) And those are the 10 most profitable, not even the "average" companies. There both is, and is not, a lot of money in the system. Start trying to "distribute" the "excess" out and suddenly it looks a lot less "excess". Further, bear in mind this is simple math. You can't argue away the math.
onion2k 12y ago
You're speculating. There no economic evidence that increasing the minimr um wage pushes up prices significantly. The fact is there are plenty of corporations that make billions in profit while paying their workers badly - there's a lot of room to pay people better without affecting prices at all.
- Domenic_S 12y ago
  > without affecting prices at all. You're speculating, too.
  - wavefunction 12y ago
    That's not speculation, that's simple facts. A profitable company can drive some of its profit towards higher employee wages without raising prices.
  - onion2k 12y ago
    You misunderstood my point - I'm saying that a company that makes billions in profit could put wages up without putting prices up by redirecting some of that profit in to better pay for it's workers, rather than, say, piling money up in the bank. That is not speculation, that's very basic accounting.
    - poikniok 12y ago
      But would they?
Mikeb85 12y ago
> Do you expect your employer to keep his same prices and same amount of work force and just eat the labor cost? Many will simply eat the cost, actually. The minimum-wage debate is more about politics than economics. There's not as many minimum wage workers as people think, so for very little economic cost, you can increase the quality of life for the lowest paid workers in our society. A few businesses may be forced to change, but those are the ones that run razor-thin margins. > What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices of everything you buy suddenly doubled?" Nothing will double in price. Given the amount of minimum wage workers that actually exist in the US, prices shouldn't increase by more than 5%. Anything more would just be opportunistic gouging.
- aaronbrethorst 12y ago
  There are about 3.3 million people who are affected by this per http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-minimum-wage/ http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi... The minimum-wage debate is more about politics than economics Not for those 3.3 million people, it's not.
  - Mikeb85 12y ago
    > Not for those 3.3 million people, it's not. 3.3 million is about 2% of the workforce of the US. The point I'm making, is that the economic cost of the price increase (which is the argument made against minimum wage increases) is far less than the tangible quality-of-life benefits to those 3.3 million workers. I'm for raising the minimum wage BTW. Because the pros (better life for those workers) far outweigh the cons, especially from an economic standpoint.
  - chrismcb 12y ago
    I don't know the numbers, but far more then 3 million will be affected. 3 million are at or below minimum wage, but how many make more than minimum wage but less than $15?
- crdb 12y ago
  Or they'll just hire more illegals. There's 11.5 million illegals in the US already [1] (edit: vs 3.3m legal workers on or below minimum wage [3]!), a large part of which are probably doing "minimum wage" type jobs for less than minimum wage. Every rise in the cost of doing business legally will push a few more jobs towards the illegal, or law-abiding businesses to bankrupcy from lack of competitiveness. My entirely anecdotal evidence places the dishwasher illegal salary in big cities (my data is from New York in 2010 or so) at around $3/hour. Different countries handle the issue of high minimum wage differently. Some countries have very thorough enforcement and drive the cost of everything through the roof, but end up with a more egalitarian society (I think Norway, where a beer costs as much as a large meal in neighbouring countries, counts). Singapore chooses not to have a minimum wage and to make it easy to import manual labour legally, and affords these labourers the same legal protection afforded any other resident. China uses the hukou system [2] to regulate the influx of unskilled labourers into more prosperous regions. The US simply turns a blind eye to the rule of law when it comes to unqualified labour, which allows businesses to keep their costs low, and politicians to save face and pretend they did something "for the workers", whilst a side effect is increasing the stress on the legal unskilled residents which might even be a positive for politicians as they love a good crisis. Conclusion: legal unskilled workers should fight for the law to be enforced, not for minimum wage to be legally increased. It would both remove competition and drive up demand for their unskilled work, and since there is no population explosion in the United States and legal immigration is incredibly regulated, should result in a natural rise of wages matching the higher cost of living in locations like Seattle. [1] http://en.wikipedia.org/wiki/Illegal_immigrant_population_of_the_United_States http://en.wikipedia.org/wiki/Illegal_immigrant_population_of... [2] http://en.wikipedia.org/wiki/Hukou_system http://en.wikipedia.org/wiki/Hukou_system [3] http://poverty.ucdavis.edu/faq/what-are-characteristics-minimum-wage-workers http://poverty.ucdavis.edu/faq/what-are-characteristics-mini...
jws 12y ago
The prices will not double. According to someone on the internet†, labor is 25% of fast food revenue. The prices need only go up 25% to maintain profit margins. Economics wil then raise its ugly fuzzy head and the balance between automation and human labor will shift, there will be more machines doing work. People already making $15/hour will eat less fast food since it is more expensive, people who have had their wages double will probably eat more fast food since they have more money. Total consumption could go either way. Total employment could go either way, it depends. One possible outcome is that revenue gets shifted to lower paid workers who spend it, creating more jobs and a larger economy. Capital investors will get less, but they already have so much capital piled up that there is a glut and they have difficulty getting people to rent it from them (~3% prime rates). What actually happens? That is the realm of gamblers. ␄ † http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html http://smallbusiness.chron.com/common-food-labor-cost-percen...
- wavefunction 12y ago
  technically, if labor is 25% of costs and the cost of that labor is increasing by 66%, prices would only need to rise 16.5% to maintain current rates of profitability (.25 * .66)
  - greedo 12y ago
    But raising the min to $15 is a 107% bump, so prices would have to rise by +/- 27%, before you factor on the increase in Social Security costs. The employer contrib to SS is 6.2%, and Medicare is 1.45%. So a $15 min wage actually costs the employer an additional $8.60/hour. An even easier and more insightful way is to carve up a Big Mac. In the US, the average price for a Big Mac is $4.79. Overhead: 30% or $1.44 Food Cost: 25% or $1.20 Labor: 25% or $1.20 Franchise Royalties: 13% or $.62 Profit: 7% or $.34 Now a Big Mac isn't as profitable as fries or soda, but those percentages are across the entire menu. Not a lot of profit for a burger... I think a lot of devs here are not seeing the overall economics of the fastfood world, and perhaps feeling a bit of guilt due to the difference in their salaries versus the fastfood workers...
- wiredfool 12y ago
anigbrowl 12y ago
"What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices of everything you buy suddenly doubled?" Wages go up 66% and prices double in response? Not gonna happen, except in the greed fantasies of a few petit bourgeosie.

by skrowl 12y ago

matthewowen 12y ago

Absent overall changes to the competitive forces that drive pricing (which is complex, because this might force some companies to increase prices, which would decrease competition for companies which don't need to, which would allow them to increase prices), and assuming this pricing change doesn't make labor alternatives (eg increasing automation) economically viable, it's actually pretty reasonable to expect employers to eat the labor cost. It's probably the rational thing to see.

Tloewald 12y ago

Every time I visit, say, Macdonalds, I try to figure out how much it would cost to pay everyone in the logistic chain decently. E.g. let's suppose we agree to give 5% extra to Macdonalds at the register to distribute to its employees in some equitable fashion. So my $12 order (two happy meals and a burger, say) costs me an extra $0.60. <10 people are processing something like 200 orders per hour (I suspect it's more like 5 people and 400 orders, I'm guesstimating), so that's $12 for each of them. But let's assume there are another ten people in the logistic chain. So that's $6/h for each of them. Now imagine the flow-on effect to the rest of the economy if people in those horrible jobs had some kind of living wage. I suspect not only would these workers be $6/h better off, I'd probably be better off too.

bigtunacan 12y ago
I really don't think the people in these jobs understand the whole picture. I already typically won't establish a McDonald's already because prices have gotten so high. It's cheaper to cook at home. If wages double and prices raise less people are going to eat there and hence less people who are employed. These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class.
- deleted 12y ago
  [deleted]
- misterbishop 12y ago
  Huh? If you can't afford to eat at McDonalds, maybe you should be protesting for a higher wage.
  - kefka 12y ago
    Mcdonalds is expensive for the quantity and quality you get. I can make the similar much healthier, tastier, and cheaper than they can.
    - Tloewald 12y ago
      Good grief, I didn't plan to defend Macdonald's, but this sounds delusional to me. If you're trying to get food cheaply, unless your labor is pretty much free and you're incredibly efficient I very much doubt this is true. Assuming I were to prepare a home cooked meal from scratch, the chances I would get away with less than 1h of labor (including driving to markets, shopping, and preparation) alone justifies eating out (at a restaurant, forget Macdonalds). Certainly eating home-cooked food is healthier. And it's probably more delicious. And cooking can be enjoyable, but not as a daily grind. But don't make the cost argument unless your time is free.
      - kefka 12y ago
        Don't make the argument "unless your time is free" unless you have 0-turn around time->money converter. Which, your argument is that "Time isn't free, so neener neener", which falls flat in its face. I'm not in the upper, or middle economic class. And making our own food is how we save a great deal of money, and also eating much healthier. We probably could eat on $50/wk for both my wife and I. But it would be junk food and bad calories and malnutrition. Last night, we had shrimp, tilapia, roasted veggies, and a capezzi salad. That would have been ~$40 each out on the town. It cost us $10 for both of us combined. And it was a half hour work for one of us. We can't even work a half hour on no minutes notice.

kushti 12y ago

Probably prices will not be doubled, but even more jobs will be transferred to China / other countries. And the Valley will win as well due to increased demand for automation.

jarin 12y ago
Food service workers and laborers are the most likely to be affected by these wage increases. I don't think anyone's going to be driving to China to get a Big Mac or flying in shelf stockers from Shenzhen.
Kiro 12y ago
> And the Valley will win as well due to increased demand for automation. You mean a win for humanity. How can anyone be against automation?
- spacemanmatt 12y ago
  Well, the oft-maligned Luddites were against automation because it was a tool used to cut them out of the income stream. To be absolutely certain, however, they weren't anti-technology, they were anti-getting-screwed.
misterbishop 12y ago
Automation is inevitable regardless. Keeping wages low will not prevent McDonalds from implementation labor-saving technologies.
- Domenic_S 12y ago
  It will dictate when the labor-saving technology is cheaper than cheap human labor. If fast food workers were making $200/hour, it would probably be cheaper to replace them with robots today. Keeping that inflection point far away gives us time to solve other issues (like housing affordability) that will impact the minimum-wage class of workers extremely hard when they're automated out.
- kushti 12y ago

Partyfists 12y ago

There are a few things in play here that you may not be considering. First this minimum wage increase would probably happen over 5 years like San Francisco and Seattle are doing. So businesses would have time to prepare and it would not go from $9 -> $15. Second, these companies have many costs outside of labor. If labor were to double for just employees making less than $15/hr, the price of everything would not just double. It would have to go up, of course, but it would not double. The final thing to consider is that if every one in the USA is making more money, they will also have more money to spend. This means they are more likely to spend money at these types of businesses thus increasing daily sales for the company. The argument you are making is an extremely common argument from before the minimum wage was instituted decades ago where minimum wage was also (relatively, of course) significantly higher than it is right now. It turns out that people do like to spend money and when they have more of it, they spend more of it.

Chronic31 12y ago
You say if everyone is making more money they will have more money to spend, that is blatantly false. If you give everyone in the US a million dollars, do you seriously expect all prices to stay the same?

misterbishop 12y ago

The state already subsidizes the cost of your Big Mac by providing foodstamps and assistance to McDonald's poverty-wage workers. McDonald's had a 'bad' 3rd quarter last year, which means they only made $1B in profit. It was down from 1.5B the previous year. http://www.forbes.com/sites/laurengensler/2014/10/21/mcdonalds-profit-down-30-on-sales-slump/ http://www.forbes.com/sites/laurengensler/2014/10/21/mcdonal... These companies can afford to pay their workers a living wage. It's not a question of whether workers "deserve" one hourly rate or another. The question is whether the working class will continue to tolerate it.

jerf 12y ago
"McDonald's had a 'bad' 3rd quarter last year, which means they only made $1B in profit. It was down from 1.5B the previous year.... These companies can afford to pay their workers a living wage." Big number fallacy... you see a big number and it doesn't occur to you to check against the other big numbers that may be involved. Wikipedia has 36,000 franchises worldwide. Assume we're paying about 100 person hours/day for a franchise, assume 360 days in a year, and you get... about 1.3 billion paid hours. (And I suspect I'm being generously conservative with 100 personhours/day for an average franchise, especially when you account for the whole thing, like the shipping and accounting and such.) So, all else being equal (which it never is, but roll with it), and had they paid everyone another $1/hour, they'd be making a loss. You can't just see big profit numbers and go "Oh, they've got money, surely they can pay better!" Capitalism is very efficient (in the conventional sense of the term of "using inputs well") and very competitive, in that McDonalds can't just charge 50% more and nobody changes their buying habits, and it's actually really good at shaving profit margins down to a surprisingly small level, contrary to the numerically-illiterate rhetoric often flung at it. A lot of big corporations make billions a year, but it turns out that when you do the analysis in percentages, they're typically making waaaay less than you think. For instance, here's the 10 most profitable companies in 2013: http://www.usatoday.com/story/money/business/2013/01/20/10-profitable-companies-2013/1848581/ http://www.usatoday.com/story/money/business/2013/01/20/10-p... By #10, "Wal-Mart" (how convenient, a favored bête noire of the labor community), you've got a company pulling in $467 billion in revenue, to make a "mere" $16 billion earnings. That's a 3.4% of their revenue! Yes, it would be a big pile if you just handed it to me personally, but it means that a 4% fuckup at a high enough level would be enough to fry their entire profit. (Do you do your job with 4% tolerance?) And those are the 10 most profitable, not even the "average" companies. There both is, and is not, a lot of money in the system. Start trying to "distribute" the "excess" out and suddenly it looks a lot less "excess". Further, bear in mind this is simple math. You can't argue away the math.

onion2k 12y ago

You're speculating. There no economic evidence that increasing the minimr um wage pushes up prices significantly. The fact is there are plenty of corporations that make billions in profit while paying their workers badly - there's a lot of room to pay people better without affecting prices at all.

Domenic_S 12y ago
> without affecting prices at all. You're speculating, too.
- wavefunction 12y ago
  That's not speculation, that's simple facts. A profitable company can drive some of its profit towards higher employee wages without raising prices.
- onion2k 12y ago
  You misunderstood my point - I'm saying that a company that makes billions in profit could put wages up without putting prices up by redirecting some of that profit in to better pay for it's workers, rather than, say, piling money up in the bank. That is not speculation, that's very basic accounting.
  - poikniok 12y ago
    But would they?

Mikeb85 12y ago

> Do you expect your employer to keep his same prices and same amount of work force and just eat the labor cost? Many will simply eat the cost, actually. The minimum-wage debate is more about politics than economics. There's not as many minimum wage workers as people think, so for very little economic cost, you can increase the quality of life for the lowest paid workers in our society. A few businesses may be forced to change, but those are the ones that run razor-thin margins. > What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices of everything you buy suddenly doubled?" Nothing will double in price. Given the amount of minimum wage workers that actually exist in the US, prices shouldn't increase by more than 5%. Anything more would just be opportunistic gouging.

aaronbrethorst 12y ago
There are about 3.3 million people who are affected by this per http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-minimum-wage/ http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi... The minimum-wage debate is more about politics than economics Not for those 3.3 million people, it's not.
- Mikeb85 12y ago
  > Not for those 3.3 million people, it's not. 3.3 million is about 2% of the workforce of the US. The point I'm making, is that the economic cost of the price increase (which is the argument made against minimum wage increases) is far less than the tangible quality-of-life benefits to those 3.3 million workers. I'm for raising the minimum wage BTW. Because the pros (better life for those workers) far outweigh the cons, especially from an economic standpoint.
- chrismcb 12y ago
  I don't know the numbers, but far more then 3 million will be affected. 3 million are at or below minimum wage, but how many make more than minimum wage but less than $15?
crdb 12y ago
Or they'll just hire more illegals. There's 11.5 million illegals in the US already [1] (edit: vs 3.3m legal workers on or below minimum wage [3]!), a large part of which are probably doing "minimum wage" type jobs for less than minimum wage. Every rise in the cost of doing business legally will push a few more jobs towards the illegal, or law-abiding businesses to bankrupcy from lack of competitiveness. My entirely anecdotal evidence places the dishwasher illegal salary in big cities (my data is from New York in 2010 or so) at around $3/hour. Different countries handle the issue of high minimum wage differently. Some countries have very thorough enforcement and drive the cost of everything through the roof, but end up with a more egalitarian society (I think Norway, where a beer costs as much as a large meal in neighbouring countries, counts). Singapore chooses not to have a minimum wage and to make it easy to import manual labour legally, and affords these labourers the same legal protection afforded any other resident. China uses the hukou system [2] to regulate the influx of unskilled labourers into more prosperous regions. The US simply turns a blind eye to the rule of law when it comes to unqualified labour, which allows businesses to keep their costs low, and politicians to save face and pretend they did something "for the workers", whilst a side effect is increasing the stress on the legal unskilled residents which might even be a positive for politicians as they love a good crisis. Conclusion: legal unskilled workers should fight for the law to be enforced, not for minimum wage to be legally increased. It would both remove competition and drive up demand for their unskilled work, and since there is no population explosion in the United States and legal immigration is incredibly regulated, should result in a natural rise of wages matching the higher cost of living in locations like Seattle. [1] http://en.wikipedia.org/wiki/Illegal_immigrant_population_of_the_United_States http://en.wikipedia.org/wiki/Illegal_immigrant_population_of... [2] http://en.wikipedia.org/wiki/Hukou_system http://en.wikipedia.org/wiki/Hukou_system [3] http://poverty.ucdavis.edu/faq/what-are-characteristics-minimum-wage-workers http://poverty.ucdavis.edu/faq/what-are-characteristics-mini...

jws 12y ago

The prices will not double. According to someone on the internet†, labor is 25% of fast food revenue. The prices need only go up 25% to maintain profit margins. Economics wil then raise its ugly fuzzy head and the balance between automation and human labor will shift, there will be more machines doing work. People already making $15/hour will eat less fast food since it is more expensive, people who have had their wages double will probably eat more fast food since they have more money. Total consumption could go either way. Total employment could go either way, it depends. One possible outcome is that revenue gets shifted to lower paid workers who spend it, creating more jobs and a larger economy. Capital investors will get less, but they already have so much capital piled up that there is a glut and they have difficulty getting people to rent it from them (~3% prime rates). What actually happens? That is the realm of gamblers. ␄ † http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html http://smallbusiness.chron.com/common-food-labor-cost-percen...

wavefunction 12y ago
technically, if labor is 25% of costs and the cost of that labor is increasing by 66%, prices would only need to rise 16.5% to maintain current rates of profitability (.25 * .66)
- greedo 12y ago
  But raising the min to $15 is a 107% bump, so prices would have to rise by +/- 27%, before you factor on the increase in Social Security costs. The employer contrib to SS is 6.2%, and Medicare is 1.45%. So a $15 min wage actually costs the employer an additional $8.60/hour. An even easier and more insightful way is to carve up a Big Mac. In the US, the average price for a Big Mac is $4.79. Overhead: 30% or $1.44 Food Cost: 25% or $1.20 Labor: 25% or $1.20 Franchise Royalties: 13% or $.62 Profit: 7% or $.34 Now a Big Mac isn't as profitable as fries or soda, but those percentages are across the entire menu. Not a lot of profit for a burger... I think a lot of devs here are not seeing the overall economics of the fastfood world, and perhaps feeling a bit of guilt due to the difference in their salaries versus the fastfood workers...
wiredfool 12y ago

anigbrowl 12y ago

"What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices of everything you buy suddenly doubled?" Wages go up 66% and prices double in response? Not gonna happen, except in the greed fantasies of a few petit bourgeosie.