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$15 Minimum Wage


Ann
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I majored in economics so I am well aware of the Econ 101 argument against raising minimum wage but every study I have read suggests there is no empirical evidence which supports the common refrain that raising minimum wage hurts small businesses or results in mass unemployment.  

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2 hours ago, Jauronimo said:

I majored in economics so I am well aware of the Econ 101 argument against raising minimum wage but every study I have read suggests there is no empirical evidence which supports the common refrain that raising minimum wage hurts small businesses or results in mass unemployment.  

I was also an economics major.  I have not looked for studies (and will not) but the laws of economics are in play.  A business can not have employees whose marginal benefit is less than their rate.

 

Look for other evidence.  Why is automation being implemented?  Because they believe that is cheaper than paying wages.

 

I am assuming you do not run a business.

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13 minutes ago, Just Joshin said:

I was also an economics major.  I have not looked for studies (and will not) but the laws of economics are in play.  A business can not have employees whose marginal benefit is less than their rate.

 

Look for other evidence.  Why is automation being implemented?  Because they believe that is cheaper than paying wages.

 

I am assuming you do not run a business.

 

You should.

 

Economics isn't physics.  There are no laws of economics.  There are only theories to try and explain what happened yesterday and theories abound.  There is more than one theory on the ramifications of raising minimum wage than just your Econ 101 graph.  Any understanding of economics that consists of natural laws determining causation is seriously flawed.  

 

Automation and technological progress predates any notion of minimum wage.  Mankind has always looked for an easier, cheaper, faster way to get things done.  Automation isn't some new response to minimum wage laws.

 

I don't run a business but I do analyze them for a living.

 

While I appreciate your Econ 101 dogma, I can assure you I am well versed in basic price, supply, and demand curves.  Some cursory research on the topic may show you that the real world is way more complicated than 3 lines on a chart and there is much debate on the affects of min wage among leading economists.  I don't know if the world's leading economists are business owners however, so take it all with a grain of salt. 

 

https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/

 

https://www.nber.org/system/files/working_papers/w28388/w28388.pdf?utm_campaign=PANTHEON_STRIPPED&amp%3Butm_medium=PANTHEON_STRIPPED&amp%3Butm_source=PANTHEON_STRIPPED

 

 

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12 hours ago, Jauronimo said:

 

You should.

 

Economics isn't physics.  There are no laws of economics.  There are only theories to try and explain what happened yesterday and theories abound.  There is more than one theory on the ramifications of raising minimum wage than just your Econ 101 graph.  Any understanding of economics that consists of natural laws determining causation is seriously flawed.  

 

Automation and technological progress predates any notion of minimum wage.  Mankind has always looked for an easier, cheaper, faster way to get things done.  Automation isn't some new response to minimum wage laws.

 

I don't run a business but I do analyze them for a living.

 

While I appreciate your Econ 101 dogma, I can assure you I am well versed in basic price, supply, and demand curves.  Some cursory research on the topic may show you that the real world is way more complicated than 3 lines on a chart and there is much debate on the affects of min wage among leading economists.  I don't know if the world's leading economists are business owners however, so take it all with a grain of salt. 

 

https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/

 

https://www.nber.org/system/files/working_papers/w28388/w28388.pdf?utm_campaign=PANTHEON_STRIPPED&amp%3Butm_medium=PANTHEON_STRIPPED&amp%3Butm_source=PANTHEON_STRIPPED

 

 

From the first link.

 

"In the above examples, a higher minimum wage will raise labor costs. But many companies can recoup cost increases in the form of higher prices; because most of their customers are not poor, the net effect is to transfer money from higher-income to lower-income families."

 

I expected nothing less from a far left extremist (the author, not you). He firmly believes that most people are poor, but at the same time believes that most customers aren't poor and will gladly pay higher costs to help with income inequality.

 

Econ 101 isn't perfect but it seems more realistic than equality based economics.

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On 2/23/2021 at 1:43 PM, Ann said:


Lately, I play here.

I do have my own blog. Years ago that took 60+ hours per week. Now? It is part-time (and does better monetarily). 

Honestly? Sometimes I wonder when I had time to work.

 

 

All my retired clients say they are busier than ever since they retired.  I get that.  Your time is yours and it's time to do all the things that you didn't have time to do.  

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Progressive Democrats call for Biden to overrule Senate parliamentarian on minimum wage
 

House Democrats are doubling down on their efforts to hike the minimum wage to $15, urging the president to override Senate rules.
 

Twenty-three prominent Democratic representatives, including Reps. Rashida Tlaib (D-MI), Ilhan Omar (D-MI), Alexandria Ocasio-Cortez (D-NY), Ro Khanna (D-CA), among others, urged Biden in a letter Monday to overrule the Senate parliamentarian’s decision that the Senate can't use budget reconciliation to pass the $15 minimum wage provision.
 

"Eighty-one million people cast their ballots to elect you on a platform that called for a $15 minimum wage," the lawmakers wrote in a letter. "We urge you to keep that promise ... and maintain the $15 minimum wage provision in the American Rescue Plan."
 

The House passed a version of Biden's $1.9 trillion stimulus bill on Saturday that included the minimum wage provision, but the final version of the bill the Senate will vote on likely won't include the provision after the Senate parliamentarian ruling last week.
 

"The outdated and complex Byrd rule rooted in restricting progress must not be an impediment to improving people’s lives," the lawmakers wrote. "You have the authority to deliver a raise for millions of Americans."

The Byrd rule restricts what can be included in reconciliation legislation in the Senate. Each provision must have a budgetary impact on the federal government to qualify for the process.

</snip>
 

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1 hour ago, Ann said:

Progressive Democrats call for Biden to overrule Senate parliamentarian on minimum wage
 

House Democrats are doubling down on their efforts to hike the minimum wage to $15, urging the president to override Senate rules.
 

Twenty-three prominent Democratic representatives, including Reps. Rashida Tlaib (D-MI), Ilhan Omar (D-MI), Alexandria Ocasio-Cortez (D-NY), Ro Khanna (D-CA), among others, urged Biden in a letter Monday to overrule the Senate parliamentarian’s decision that the Senate can't use budget reconciliation to pass the $15 minimum wage provision.
 

"Eighty-one million people cast their ballots to elect you on a platform that called for a $15 minimum wage," the lawmakers wrote in a letter. "We urge you to keep that promise ... and maintain the $15 minimum wage provision in the American Rescue Plan."
 

The House passed a version of Biden's $1.9 trillion stimulus bill on Saturday that included the minimum wage provision, but the final version of the bill the Senate will vote on likely won't include the provision after the Senate parliamentarian ruling last week.
 

"The outdated and complex Byrd rule rooted in restricting progress must not be an impediment to improving people’s lives," the lawmakers wrote. "You have the authority to deliver a raise for millions of Americans."

The Byrd rule restricts what can be included in reconciliation legislation in the Senate. Each provision must have a budgetary impact on the federal government to qualify for the process.

</snip>
 

 

 

Blame the Byrd rule all you want,

 

it doesn't change the basic fact,

 

The Democrats can introduce a stand-alone bill to raise the minimum wage to $15.

They can do it later today, if they really want to do so.

 

They want the issue, not the responsibility.

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On 2/26/2021 at 6:20 PM, Jauronimo said:

 

You should.

 

Economics isn't physics.  There are no laws of economics.  There are only theories to try and explain what happened yesterday and theories abound.  There is more than one theory on the ramifications of raising minimum wage than just your Econ 101 graph.  Any understanding of economics that consists of natural laws determining causation is seriously flawed.  

 

Automation and technological progress predates any notion of minimum wage.  Mankind has always looked for an easier, cheaper, faster way to get things done.  Automation isn't some new response to minimum wage laws.

 

I don't run a business but I do analyze them for a living.

 

While I appreciate your Econ 101 dogma, I can assure you I am well versed in basic price, supply, and demand curves.  Some cursory research on the topic may show you that the real world is way more complicated than 3 lines on a chart and there is much debate on the affects of min wage among leading economists.  I don't know if the world's leading economists are business owners however, so take it all with a grain of salt. 

 

https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/

 

https://www.nber.org/system/files/working_papers/w28388/w28388.pdf?utm_campaign=PANTHEON_STRIPPED&amp%3Butm_medium=PANTHEON_STRIPPED&amp%3Butm_source=PANTHEON_STRIPPED

 

 

 

It's not an immediately linear relationship, but you also know that any permanent increase in the input cost will lead to a counter reaction on either the profit or the future capital allocation to allay that cost to maintain the profit.   If you operate in an industry with high price elasticity, you won't have the flexibility to raise prices, leaving labor efficiency as the swing variable to maintain your profit.

 

Economics aside, using minimum wage as the determinant to maintain a household is an awful strategy.

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There is the law of equilibrium that will always seek it's balance. If you raise the cost to produce something, the cost to obtain it also increases. It may take some time to find that equilibrium but it will balance itself. When it does and it costs $5 for a loaf of bread, we will be right back where the government started and they will be demanding $25 an hour minimum wage.

 

I always thought minimum wage was a workforce entry level position.

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20 minutes ago, Foxx said:

There is the law of equilibrium that will always seek it's balance. If you raise the cost to produce something, the cost to obtain it also increases. It may take some time to find that equilibrium but it will balance itself. When it does and it costs $5 for a loaf of bread, we will be right back where the government started and they will be demanding $25 an hour minimum wage.

 

I always thought minimum wage was a workforce entry level position.

  The intention of a minimum wage from the earliest 20th Century reformers to Roosevelt's early New Deal legislation and beyond was to be rid of sweat shops and provide a living wage to a very sizable group of workers.  

 

  Speaking of bread the industry has contracted in terms of the number of bakers.  Wegman's no longer bakes its own products.  The short term goal was to increase efficiency and lower cost (with the unintended consequence of offering inferior products) but should the businesses that actually make the product be restricted from raising prices in an effort to raise profit?  Easier to do when there is less competition.  It will have nothing to do with costs in terms of materials or labor or other inputs.  

 

  Digressing from economics it says in the New Testament that the poor will always be with us.  Rather than divine inspiration is the Bible telling us that there will always be the empowered and those that have virtually no power in an economic system?  

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14 hours ago, GG1 said:

 

It's not an immediately linear relationship, but you also know that any permanent increase in the input cost will lead to a counter reaction on either the profit or the future capital allocation to allay that cost to maintain the profit.   If you operate in an industry with high price elasticity, you won't have the flexibility to raise prices, leaving labor efficiency as the swing variable to maintain your profit.

 

Economics aside, using minimum wage as the determinant to maintain a household is an awful strategy.

Theres an understatement.  

 

Some may be interested to look into some econometrics and see what goes into the formulation of neat and tidy supply demand graphs and pricing formulas we all know and love from highschool and undergrad.  

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Yo! I'm an idiot who owns a small construction company. 

 

$15 will &#%$ me. 

 

Yeah, my dudes make more than $15 an hour...but 1 just barely. Why should that dude drive to my side of town for a $16 an hour job? This will cause all my wages to go up on my skilled labor guys. 

 

This is just so obviously shortsighted. 

 

Hows about to all the people who wanna make above minimum wage, have more than minimum skills. 

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3 hours ago, Jauronimo said:

Theres an understatement.  

 

Some may be interested to look into some econometrics and see what goes into the formulation of neat and tidy supply demand graphs and pricing formulas we all know and love from highschool and undergrad.  

 

Take it one step further.  I don't know any CFO who uses macro supply & demand curves in their budget and capital allocation decisions.

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59 minutes ago, Ann said:

I am not sure Machin ever promised to vote for a $15 minimum wage. 🤷‍♂️
 


 

 

Good to see the Dems are just as stupid as the GOP when it comes to sending out the torches and pitchforks against anyone who dares to use common sense and step over the hard party line.

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On 2/27/2021 at 4:08 PM, Chef Jim said:

 

All my retired clients say they are busier than ever since they retired.  I get that.  Your time is yours and it's time to do all the things that you didn't have time to do.  

That's why I don't want to retire ever. I work 60+ hours a week every week and essentially have for 15+ years. My best weeks are below 70 hours, my busy times 120+.  Fertilizer season is worse that hay season. I can drag hay season on a month. Fertilizer season may be 3 20 hour days back to back, mid week, no respite.

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  • 1 month later...

I see... lawsuits.

 

</snip>
 

President Joe Biden will sign an executive order on Tuesday requiring federal contract workers to make at least $15 an hour. 
 

As his efforts to increase the national minimum wage to $15 an hour stalled in Congress, the executive order could impact hundreds of thousands of people who are working on federal contracts — giving a raise to low-wage workers including food service workers on military bases and maintenance workers in government buildings. 
 

</snip>

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4 hours ago, Ann said:

I see... lawsuits.

 

</snip>
 

President Joe Biden will sign an executive order on Tuesday requiring federal contract workers to make at least $15 an hour. 
 

As his efforts to increase the national minimum wage to $15 an hour stalled in Congress, the executive order could impact hundreds of thousands of people who are working on federal contracts — giving a raise to low-wage workers including food service workers on military bases and maintenance workers in government buildings. 
 

</snip>

 

These are Federal contracts.  All that will happen is the contracting company will complain and the Feds will just give them more money

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Posted (edited)

As for the $15/hr minimum on small business, there is a lot of detail lacking in whatever proposals are out there. Does it apply to part timers?  To every worker regardless of age, no carve-out for those under 21 or 18?  All of these factors will have ramifications of their own.

 

As a small business owner and someone who knows A LOT of other small business owners, whenever there is a significant cost increase forced upon you,the first thing your brain does is ask how it can be offset somewhere.  For companies that might employ a number of lower wage people (fast food restaurants, landscapers, distribution companies, retail stores, banks (tellers make dirt) and many others - management undoubtedly will adjust hours and headcount to compensate.  It's not just the wage cost that rises, it's FICA, SUTA/FUTA, workers comp ins and unemployment insurance. They all rise with a rising payroll. 

 

So many small businesses work their tales off all year and maybe the owner grinds out $100K or not a lot more than that or even less.  The average subway makes something like $100K or less per year. These are probably barely acceptable returns based on ownership's hours worked, capital invested and risk. 

 

Our business doesn't employ people below $15/hr but if we did and if we were just grinding out a modest return, I'd change roles and responsibilities for some and broom the weakest out the door or cut some hours.  That's what will happen in many small companies. 

Edited by Ninety-4
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