Firsthand Account of What Higher Minimum Wages Do

I've heard a lot of talk about raising the minimum wage again to anywhere from $9/hr to $15/hr. While this may seem nice to do, it will not have a positive impact on our economy. It would would have little if any effect on most of the workforce, excepting two categories: 1.) The worst workers would have it a fraction better at the expense of 2.) The workers just above them pre-rate hike.

Here's why:

1.) I've heard that a $15/hr minimum wage would only raise a big mac 68 cents or something, but this is based on incorrect assumptions. It would just be the minimum wage worker who got the raise. The cook getting a raise would lead to the managers getting a raise (who is going to be a manager at McDonald's for $15/hr when they only need to be a cook). This would trickle up to the general manager and the district manager and the regional managers, etc. etc. until it finally hit the CEO with his new raise as well. So the cost of the big mac after all these raises would be much more than 68 cents.

2.) Minimum wage doesn't just increase the price of Big Macs. It would be an across the board increase not only on McDonald's and its competitors fast food menus, but also EVERYTHING ELSE YOU BUY. You think a construction worker who was making $15/hr before the bump is going to continue doing that when he could just drop chicken tenders in a fryer for the same? So what his new rate of pay? $25/hr? What about the foreman who was making $25/hr before, is he going to want a raise since his workers get paid the same as him? What about his boss? ALL costs would rise dramatically including: House construction, rent, food, cable TV, cell phone plans, cars, insurance, movies, etc. etc. etc. This dollar devaluation would just stabilize similarly to what it is now except for 1 thing that I have already seen firsthand:

3.) The worst workers at the bottom of the pay range would make similar amounts to their colleagues who worker harder/smarter. This I know for a fact because I work as a GM in the food industry and have seen firsthand as we have hiked minimum wage rates lately. Here's the proof in the pudding:

I work for a food industry chain that is very successful. When minimum wage was $5.15 hr we could afford to hire in a little higher than most of our competitors. We hired in @ $6.50/hr and had no problems grabbing some of the best entry level workers. Any competent worker would receive wage increases every 6 months until they hit $7.50 hr. The truly best workers who learned all the stations and were fast and accurate could make up to $9/hr eventually. Turnover was low, productivity was high, as we amassed solid workers paid between $6.50/hr and $9/hr. When the minimum wage rate went to $7.85/hr we started to face economic hardship as we were paying workers more right off the bat. We solved the problem by cutting the best workers pay from $9/hr to $8/hr. So now the guy I just hired last week only makes $0.15/hr less than a great workers I've had for a year. Since this has happened across the board, we get a lot of workers who don't care about their job. Their are lots of minimum wage jobs out there to be had, so when someone gets scheduled on a day they don't want to work, they just quit and find another minimum wage job. We have caused these jobs to be disposable because we don't pay anymore than anyone else.

Does anyone actually think that a higher minimum wage will fix anything?

 

A higher wage only screws the consumers.

 

If these minimum wage workers were paid better they would not need my tax dollars to pay for their food stamps.

 

Not really.. It means there are MORE consumers.. and more who can pay their rent..

Meanwhile.. corporate America is making huge profits.

My brother paid his sales people $100 K plus incentives.. Most were making $180 and he did very well.

 

No. It means there are less consumers as people are put off by higher prices.

Unlike burger-flippers, good sales people are worth every dime you pay them and more. Nobody makes a cent until somebody sells something. Ask Ross Perot. He built a business giant by paying his salesmen very, very well.

Corporations are supposed to make profits. If they fail to do so they are Enron or GM or Solyndra.

 

All a higher min wage does is cause inflation. The same goes with unions always striking for more money.

 

Yeah, we can't have that. That's the raiders/profiteers/looters job!

 

What damage does increasing the CEO profit, by 500 times do? How about outsourcing for profit? That do any damage? Is MORE for the richest of the rich always the best option? I'm confused.

 

Higher wages cuts down on government funding hard workers. Paying a higher wage might make things go up a few pennies not much more. It might cut into the multimillion dollar profits.

 

Go ahead. When these workers get replaced by the robocook, you'll be crying about that too.

 

Like the profiteers aren't going to do that anyway....yeah right.

 

Pay American workers the $15 or so minimum wage and stop that stupid employer funded health insurance. Have workers pay there own health insurance.

 

Fat cat employers want the write off at the end of the year though. There's another part of the equation you'll not hear about from the right.

 

the min wage goes up, inflation follows down the road, but as it does wages go up, following that is the increase in prices - rinse and repeat

of course during this increase people's debt remains the same, thus when our grandparents bought a house making 50 cents an hour, they were paying a fraction of what they originally borrowed based on current dollar value

this also causes the ubber rich to keep investing in other things then savings accounts as they barley beat inflation... or used too, now they barley do anything with or without inflation...

in the last 100 years the min wage has grown big time.. was the last 100 years really as gloomy as you make it sound?

at will employment works both ways, your free to use contracts... rather then at will employment, but then you have to agree to some things the employees wants in return for them agreeing to what you want, it's a partnership
.

 

So does greed in the front office and the board room.

If the investor class lowered their expectations slightly and paid the working people more for actually creating their wealth, we would all be better off.

 

The minimum wage is largely ineffective. I've heard a lot of liberal friends actually applaud places with high minimum wages, like San Francisco (I believe that's the one they said has the highest minimum wages). However, if you look at areas with high minimum wages they're places where wages in general are higher, not because of the existence of a minimum wage, but because of high costs of living and more vibrant economies (they almost always go hand in hand). Raising the minimum wage to $12 would have nearly no effect in San Francisco, because that's roughly what the market has determined to be the appropriate compensation for unskilled labor. Raising it to $12 in a dead coal town in Yuma, AZ wouldn't achieve any good, where the unemployment rate is already around 34%, and many more would become unemployed because $12 is far above what the area market has determined to be appropriate compensation for unskilled labor. But what effect would a $12 minimum wage have on a small rural town in Maine? Suppose for a second that no one would lose their jobs because of it (though there would certainly be some), $12 is about what the standard hourly wage is for a journeyman carpenter in Maine. He's invested a lot of time and effort into working a job that is a lot more harsh on his body than running a cash register or making fries and McDonald's. What do you suppose happens? Well, the most likely thing is he'll need a raise and you'll get inflation, but suppose he doesn't - the cost of goods and (moreso) services in his area will jump, and he'll be worse off for it if he doesn't get that raise. So what will he do? Likely move to an area that doesn't have inflated wages, creating a shortage where he is and inevitably resulting in higher wages for carpenters.

The minimum wage is only narrowly effective. If you have a small population that is around the minimum wage, it will bump up their wages and increase their standard of living, but there is still some cost to the society at large. The key is, as with most social welfare programs (and this really is an issue of social welfare), the loss for the society at large is greater (even if slighter) than the gain in pure economic terms, but is the 'moral' gain worth it? It certainly can be worth it, but that's a value judgement to be made. So long as the proposed minimum wage is near where the market value for unskilled labor is, I have no issue with having a minimum wage and slowly raising it. But when it isn't very close to the market value, you end up pushing out some workers who aren't worth the minimum wage to an employer, and they're at a greater loss.

 

And here I was thinking that this may be a post from somebody who earned minimum wage and how their life improved.

Instead, it's a post about how greedy people should get more money and the poor should get less money... business as usual.

 

A higher wage MAKES consumers. Fixed your comment for you.

 

it would cause massive inflation..if you think food has gone up in the last 5 years it will be much worse...as prices go up people will spend less and we will be back right where we were when this mess started..

 

A raise to minimum wage would raise EVERYONE'S pay, and therefore their services. If you double someone's pay and then double their rent, what did you accomplish?

 

that doesnt make any sense..you pay more in wages and benefits than you save writing them off

 

First of all, your example is not making any connection to the rais in the minimum wage and the economic hardships you mentioned. In case you haven't noticed EVERYONE is suffering economic hardships and the minimum wage has been stangnent for years now. Here's the real problem, industries have been increasing both productivity and profit for the last 30 years now without actually paying the work force an equivelent share of the siad profit. In other words, they have been ripping the workers off for 30 years.



As for what raising the minimum wage can do for the economy, ask Austalia!





Here is a map to show how many hours you have to work per week on minimum wage just to afford a place to sleep at night.



Finally, the hard core facts about Minimum wage and what it means to the economy.



This shouldn't be a liberal or conservative issue, this should be a basic humanitarian issue.

 

That's going to happen anyway. The problem will be compounded even more once there are significant enough advances in AI software to start automating many middle class jobs as well. I think automation will be the downfall of capitalism eventually.

 

....which means prices of the consumables go up, along with the rents.
Or perhaps you were about to say that demand for a product does not increase its price ?

 

I agree. Raising the minimum wage just lowers the buying power of the dollar leaving the minimum wage workers in the same place they were before. My point was whether you raise the minimum wage or not, automation will continue to reduce the need for low skill workers, and as AI advances it will reduce the need for skilled workers as well.