Why the Minimum Wage Should Be Increased
It could do more than anything to reduce the income gap in this state.
Today, there are demonstrations at fast food restaurants across the nation. Organizers expect there will be one-day strikes in 100 cities and protest activities in 100 additional cities, with Milwaukee and Madison on the list of 200. The protests are demanding minimum pay of $15 per hour, which might be hard to accomplish, but the strikes also raise the issue of the minimum wage, which is long overdue for an increase.
The minimum wage in Wisconsin is $7.25, the same as the federal rate. In real, un-inflated dollars, that has declined drastically from 1968, when it stood at $10.60 an hour, or 55 percent of the median full-time wage, as University of Massachusetts-Amherst economics professor Arindrajit Dube has written. By contrast, the current minimum wage of $7.25 equals just 37 percent of the median full-time wage. To restore the value of the minimum wage so it equals 55 percent of the median full-time wage would mean raising it to $10.78.
President Barack Obama has proposed hiking it to $10.10. That may sound high, but it’s normal in Canada, where the minimum wage is $10 or higher in every Canadian province except Alberta ($9.95).
Voters overwhelmingly support such legislation. As Dube writes, “over three-quarters of Americans, including a solid majority of Republicans…support raising the minimum wage to either $9 or $10.10 an hour…voters in red and blue states alike have consistently supported, by wide margins, initiatives to raise the minimum wage…Since 1998, 10 states have put minimum wage increases on the ballot; voters have approved them every time” — by 71 percent of Florida voters and 68 percent of Nevada voters, both passed in 2004.
This is a no-brainer platform plank for a Democratic opponent to Gov. Scott Walker. Odds are a huge majority would favor increasing the minimum wage in Wisconsin.
Once upon a time, the minimum wage was seen as something mostly affecting teen worker, but not in today’s economy. A recent analysis by the Economic Policy Institute shows more than 88 percent of workers earning the minimum wage are older than age 20.
The median age of fast-food workers is now 29 and is 32 for women, who make up 65 percent of all such workers. And 36 percent of the fast-food workers 21 or older have children to support. Most of these parents are women. This is an issue that should have huge resonance for women.
The Nation magazine spotlighted the story of Milwaukee worker Mary Coleman, who works at a Popeye’s in Milwaukee for $7.25 an hour. “Coleman, 59, lives with her daughter, who has a heart condition, and her two grandchildren. She also relies on food stamps to make ends meet…’I’m tired of working for $7.25,’ Coleman says. “I can’t take care of my household, I can’t even take care of myself.’”
Industry officials say only a small percentage of fast-food jobs pay the minimum wage and are largely entry-level jobs. But the other workers can’t be earning much more, given that the median hourly wage for fast-food workers nationally is $8.94 an hour. Take Austin, Texas: there about 28,275 fast foot workers are employed in that city, with a median wage of $8.83.
The classic argument is that raising the minimum wage will lead employers to cut employment. Drube’s study concluded that a hypothetical 10 percent increase in the minimum wage would affect employment in the restaurant or retail industries “by much less than 1 percent; the change is in fact statistically indistinguishable from zero.”
“Existing research, he adds, “suggests that if you raise the minimum wage by 10 percent, you can expect the price of a $3 burger to rise by a few cents, which is enough to absorb a sizable part of the wage increase.”
Of course, a ten percent increase would raise the minimum wage only to about $8 (which would certainly help workers). What would be the impact of jumping it to $10?
Wall Street Journal columnist Al Lewis points to Australia, where fast-food workers already make about $15 an hour. “Only some of this higher cost of labor is passed on to consumers. The rest is absorbed by using more technology than people, and demanding more productivity from the fewer people they pay this higher wage.”
Lewis suggests companies are cutting their own throats by keeping wages so low: “Last week, I asked readers why they don’t shop much anymore, and, voilà, my email box overloaded with missives from folks who said they can no longer afford it. (Read through scores of these tales on my blog, tellittoal.com.)… Retailers and restaurateurs know the story well. They’ve been warning that the consumer is weak.”
Corporate boardrooms have fallen into the habit of rewarding executives for slashing employment and wages. Perhaps the classic example of this mentality has been a Walmart store’s decision to ask employees to donate to a food drive for its own needy employees, which brought the company tons of negative publicity.
But you can also help a company’s bottom line by driving sales and revenue. Workers who earn a decent wage will have more to spend, and those at the bottom end are most likely to convert any new money made into consumer purchases. They might also feel better about — and be more loyal to — their employers.
Business writer Rick Newman has suggested that raising the minimum wage will actually help companies by reducing employee turnover and improving their performance. And all businesses would be in the same boat, since all would have to pay the minimum wage. On balance, he argues, “It might do more good than harm.”
The simple act of raising the minimum wage would have a huge impact on the growing income gap in America. “The evidence suggests that around half of the increase in inequality in the bottom half of the wage distribution since 1979 was a result of falling real minimum wages,” Drube writes.
The average fast food wage of $8.94 an hour equals $18,595 annually. That’s barely above the federal poverty line for a family of three, which is $17,916. Restoring the real dollar value of the minimum wage would have a huge impact on these families, and would help move this state and this country back towards a less brutal time, when it was patriotic to care about those who have less.
Short Take
State Sen. Kathleen Vinehout (D-Alma) has hired a campaign staffer, thus moving closer to challenging former Commerce Secretary Mary Burke for the Democratic nomination for governor. She told the Eau Claire Leader-Telegram: “Every day I seem to be getting closer and closer to making the decision to run for governor.”
Some Democratic leaders clearly prefer to anoint Burke and fear a primary could be divisive. Burke’s most important advantage is presumed to be her personal wealth, but it’s still not clear how much she is willing to spend. There may well be an opening here for Vinehout. The average Democratic voter, I suspect, would not favor a coronation of one candidate by party insiders.
Either way, it appears Walker will face a woman opponent, who will be in a perfect position to argue for an increase in the minimum wage, and to argue that Walker opposes a measure which most voters favor because it buttresses his conservative credentials as a Republican candidate for president.
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As Paul Krugman put it in a recent NY Times column: “Who gets paid this low minimum? By and large, it’s the man or woman behind the cash register: almost 60 percent of U.S. minimum-wage workers are in either food service or sales. This means, by the way, that one argument often invoked against any attempt to raise wages — the threat of foreign competition — won’t wash here: Americans won’t drive to China to pick up their burgers and fries.”
Why be pikers, raise it to $25/hr. Course that means that burgers, fries will have to be doubled in price, sales will go down and people will be laid off and we need more 16-29 people unemployed, inner city 57% but since i do not eat at those places, let the Leftisits pay the increases.
I have campaigned agaisnt this in past as I have seen unemployment, yout, in inner city go up, but if the peole that run milwaukee do not care, why should I?
Anyone that runs a small business knows that they have a very narrow window and must watch costs. Target, WalMart have been successful cause they control costs. Usually a retail business allows employees minus managmetn to be less than 10%, if it goes above they have to increase their margins, lay off or close, all bad.
Raise the minimum wage… prices might go up. Then again, the people making the money will have more to spend.
Make no mistake, that extra money will be spent or invested… creating even more jobs.
Not to mention that roughly 50% of all fast food workers receive some form of government assistance. Sounds like government subsidizing large businesses to me. An increase to $10/hour would provide more contribution to social security and medicare/medicaid per paycheck as well, something I think that everyone can get on board with. I would think a $.25/per increase to the cost of a Happy Meal or garbage pizza will not affect the purchasing patterns much of most people.
A few thoughts:
– Perhaps raising the minimum wage is doable, but I think you’d have to consider an exemption for people under the Age of 18.
– Why is it that only certain businesses get singled out for the wage issues? Outpost Natural Foods got all sorts of praise for paying people something like $9 an hour. How much is the average Alterra worker making? Is it $15 an hour and if it’s not why aren’t strikes happening there?
– The minimum wage advocates need some better spokespeople. CBS This Morning has a profile of one of the protesters who actually admitted that she was offered promotions by McDonald’s, but turned them down because she has kids. No Dad in the picture though.
Sorry to say, but a family of 3 should not be able to live off a single household worker at minimum wage. These jobs have never been meant to raise a family on. The poverty line for a single person is $11,490, meaning that the current minimum wage gives workers $7105 over the poverty line. Even a family of 2, the poverty line is $15,510 giving workers $3085 over the poverty line at current minimum wage. So basically, you can drop out of high school, work at current minimum wage, pay little to no taxes, and do just fine. The only start complaining when it gets to family of 3? How convenient and ridiculous.
Basically if a business had just 5 employees working, they would have to sell $75 of stuff every single hour, just to break even with the employees salaries before paying any other bills. Thats more than a dollar a minute. You better hope there aren’t any slow periods. These foolish demonstations all will pass, just like Occupy Wall Street. Pointless.
John G,
Let’s assume that we raise the minimum wage to $15 per hour like the protests are advocating. McDonald’s would see employee costs go up dramatically because not only does the wage go up, but the government also gets 7.65% of the wages paid in the form of social security and medicare from the employer. The prices of McDonald’s products would have to go up dramatically. Now perhaps the demand for McDonalds stuff is so great that a dramatic increase in price won’t hurt sales, but theres a good chance that it would.
In the business I run the lowest paid person is a part-timer making ironically $15 an hour. Why do they make that? Part of it is I do believe in the Costco model of perhaps paying a little bit more than the market to get a really good employee. A big part of it is that if we only paid $7.25 an hour we’d have no chance of filling the position with a qualified person
Mike, let’s go ahead and NOT assume that dollar amount as I specified a more reasonable one. I suppose I could go ahead and pick something you wrote, change it entirely and then opine on what that might do, but it doesn’t make much sense to do so.
What I am seeing here are a number of individuals insulated from the reality of just how bad it is getting for many. If minimum wage doesn’t increase more regularly to keep up with inflation, more will rely upon government services to survive. The majority of new jobs being created now are closer to minimum wage than most would realize.
Additionally, if anyone uses McDonald’s as an area in which to learn job skills then they are severely misguided. I eat McDonald’s once a year regrettably, but it is enough to know that they have designed the most simple system ever to increase efficiency. Any job skills received for most are transferable to another like business, with like pay. What is lacking for most who work in this industry is likely the exact opposite situation most posters here were able to receive. Raised in advantage (not necessarily monetary), with a parent or parents who have a better understanding of the way the world works and are able to provide the educations on life that the public school system cannot. For many who work in this industry, they don’t have that luxury. People against minimum wage increases might think some of these things common sense, but they are anything but. I would also ask said people to look in the mirror and reflect on common sense when you vote for people who want to remove funding to non-profits who are desperately trying to prevent many of these people from having offspring when they have no business doing so.
If we removed all social safety net benefits, you would find that every one of these businesses would quickly have to increase pay or face strikes similar to those during the early 20th century, because people would be unable to feed themselves and any offspring they might have.
And yes, what used to be jobs staffed by teenagers has changed dramatically in the average age. These aren’t your 16 year old pimple faced teenagers working at the local AW root beer back when the Fonz was on your wooden TV. The average worker is around 20, but I don’t have time to site the study.
I have many many thoughts on this… but I’ll start with three quick ones.
First, comparing the current or proposed minimum wage to the erroneous year of 1968 is completely misleading. No year before or since has seen a real dollar level as close to that. If we raise it the minimum wage to 10.10 we will be at a real dollar wage higher then any year EVER except 1968.
Second, the National Restaurant Association has numbers of their own. They point out that about half of those earning minimum wage are teenagers, almost half are in school, and the mean (take note though, not median) household income for these minimum wage earners is $62,507. They obviously cherry pick their numbers, but both sides are doing this to put their own slant.
Third and finally, we are ignoring the inflation that an across the board 39.3% hike in minimum wage will have. Costs of many items will rise, especially low cost inelastic necessities. So now everyone in the new near-minimum wage range will have less disposable income in real dollars. So by helping the 1.6 million people we’d be hurting the tens of millions of people in the 10-low teen dollar/hr range. Not to mention anyone earning more but living paycheck to paycheck. How much sense does that make?
Matt: What exactly is your argument then? Leave minimum wage as is?
Can you at least accept that we have a problem that will continue to get worse? Increasing the base wage would inject every single dollar back into the economy. You would have increased demand for all basic goods and services. I haven’t read any single study that said employers wouldn’t be able to pass the modest costs in labor on to their consumers.
Let us use your numbers. Using 1.6MM individuals making $7.25/hr. An increase to $10/hr + the employers 7.65% payroll tax, would be $2.75/hr in wage increases per individual plus $.21/hr in payroll tax, so a total increase to the employer of $2.96/hr. 1,600,000 employees times 2,080 times $2.75. $9,000,000,000 in increased cost of sales per year. What is that as a % of GDP? I will give you a hint, its less then a basis point. McDonalds blows through that amount in one quarter. And that’s just one company. Do you understand how small that dollar amount is when compared to the income statements of Walmart, Yum Brands, McDonalds, Target?
Now, wherever you spun the 1.6MM people from, the number is far far larger as this also includes retail services and the countries largest employer, Walmart. Think of the impact this would have in terms of social security and medicare injections and less ability to receive government subsidies?
You really think that the increased demand from such a large population of people with a negative spending rate wouldn’t flow through to almost every employee out there?
John G, besides the fact that there’s a lot more to the cost of labor then just the wage and payroll tax, you are imagining this will all happen in a bubble where nothing else will change in relation to things like actual sales, employment levels, inflation etc. Right now the minimum wage is at a stable level that matches or is higher then it has been in terms of real dollars for the last 30 years.
This minimum wage issue was recently invented by unions like the SEIU. There’s suggestions this is a ploy to either a. open a new base of union members to feed the union coffers and/or b. raising the minimum wage is a way to get union wages to rise because many collective bargaining agreements are based partially on a ratio of the level of, and changes to, the minimum wage.
Thankfully my career in commercial banking provides a nice bubble to live in…
What is the percentage of people who work at fast food restaurants and make above the minimum wage? Not to be a simpleton, but what ever happened to EARNING more based on work performance?
John G, The bubble was not yours I was speaking of… but nice to hear you’re in one.
But anyway, didn’t want to come across as an anti-union nutjob who didn’t think about what he was saying. The source for that second paragraph in my last comment mainly comes from the supporters of raising the minimum wage themselves. See here: http://inthesetimes.com/article/15826/fight_for_15_confidential/
Herb, according to this, of the 10 million people employed by the restaurant industry, 95% of them earn more then the minimum wage. Of those, about half were teenagers, and 7 of out ten are 24 or younger.
Further, over three quarters of those making minimum wage are part time, and roughly half of all minimum wage earners are students.
http://www.restaurant.org/News-Research/News/Economist-s-Notebook-Setting-the-record-straight-i
Andy, whats the fixation with the restaurant industry? The people striking on Thursday happen to be in the restaurant industry.
Walmart alone employs around 2,000,000 people in the US.
Besides having a large chunk of the total minimum wage earners, it also makes for the easiest examples. Plus Herb specifically asked about the numbers on them.
How’s this for a compromise: reduce government spending by a percentage commensurate to the rate of the minimum wage raise. Since an increased minimum wage will reduce the need for government assistance, the only questions is how much, and how much less gov assistance will taxpayers have to pay for.
Democrats seem to have those facts about reduced gov assistance at their disposal, so their contention can be readily tracked and verified. Correct?
Please bruce, can you get us some global warming this winter? My tulips and my tootsies are freezing?
@WCD It seems to me that it was 55 degrees just yesterday… Though using the temperature of one particular day or a cold month (really just looking at the weather in a spot and not as a whole) to discuss climate change isn’t valid anyhow.
I’m impressed by many of the arguments that have been made here both pro and con on this issue…..well, other than those by Dohnal/WCD, but even those provide a bit of (unintentional) comic relief. The notion of increasing tax revenue by increasing the minimum wage is one that perhaps has merit, particularly since the Social Security and Medicare taxes are the ultimate regressive/”flat” taxes. I’ve seen no other proposals recently that address the huge unfunded liabilities in these programs at all. Increasing the minimum wage is a de facto tax increase on those at the bottom of the wage scale that those same individuals would be more than willing to pay. In that respect, at least, it would seem to be at least worth considering.
The money is there to pay the working poor a better wage. It’s in the pockets of the executives and the uber-rich at the top of the corporate structures. Just send some of that cash down the flow chart and distribute it there. Price increases aren’t necessary.
Consider Wal-Mart for a moment. When Papa Walton died his fortune was roughly 100 billion dollars. That, depending on the year and the state of the financial markets, is the net worth of Bill Gates AND Warren Buffet combined. That speaks volumes. Share some of the wealth with your employees by providing them with a decent wage and benefits. It hasn’t hurt Costco. A minimum wage hike, BTW, is dumped right back into the economy in consumption. By the time the economy tanked in 2008, Bush-era corporate tax cuts left Fortune 500 companies flush with cash. Corporate America responded by dumping millions of employees onto the unemployment rolls. Perhaps if some of those corporate tax cuts were were channeled into the pockets of consumers it would have blunted the recession’s impact somewhat.
Give it to the Left. Their policies bring about a complete failure of providing jobs and education the community so the way to fix it is to double down on failed policies.
If you are digging a hole over an old out house site you need to know when to stop digging. “If you want Common Children you will love Common Core”.
You have two distinct paths to take and must decide which works. Do we adopt policies that energize people or those that create more regulating government? The Left has decided that hte best way is to have all knowing, all powerful government decide what should be done or have people decide. The Left never works, Venezuela is just the latest lesson.
Blurondo, things are not that simple. You can’t just send money “down the [org] chart” as you say. Again, these things don’t just happen in a bubble… there are many other cause and effects, not to mention the opportunity costs associated with cutting it right off the bottom line.
It is so much fun to watch and read the non solutions to problems that the Left puts up. Bruce actually believes that “wishing makes it so”, or just legislate solutions that never work. If only life was so easy, just get the government to put up solutions. In this economy, that is so complicated, if you push from the gov. one way bad things happen the other way. it only works when you energize people to make their own decisions and solve problems, otherwise Russia, Venezuela would have been the worlds most successufl countries. that’s what you get from peopel with little practical knowledge. Look at Obamacare nothing is working cause they violate basic economic laws.
Just starting to read the book about our next president,” Unintimidated.” Gutty guy. I love the way the Left whines about him all the time. It is tough on them, they made complete mess of everything and Walker comes in and solves the problems and goes from negative job growth to positive.
“The rest is absorbed by using more technology than people, and demanding more productivity from the fewer people they pay this higher wage.”
The problem with drastically raising the minimum wage is right there. Business will start to replace folks behind the cash register with iPads and fry cooks with robots. While low wage foreign workers aren’t competition, technology certainly is.
By basing the standard as “enough to raise a family of 3” you also do reduce opportunities for teen employment. No longer can the small stores pay a teen to stock shelves and sweep the floor, nor do big companies want to compete with school at that price. Despite what was said earlier, even McDonalds teaches valuable life and work skills. Skills like showing up on time and hard work. Employers today are complaining that kids lack these skills. In addition, having a job keeps kids out trouble and can help turn around kids heading down the wrong path.
Judging by the right wing reaction here, they are scared of a minimum wage hike, because it will be successful. These are the same people that have been telling us how great things will work out, if only we just keep cutting taxes on the wealthy.
They have an agenda, they fit their world views to that agenda, facts be damned. If they’re starting to sweat because the minimum wage could be $10.00, then we know we’re heading in the best direction.
Tim, the only *fact* being ignored here is the fact that the minimum wage right now is as high or higher in terms of real dollar value than it has been in the last 30 years.
If you raise it to $10 an hour you will put it at an unprecedented level seen during only one year in our history.
Clearly anyone who supports raising the minimum wage doesn’t care at all about our high unemployment rate. When you cut at the bottom, just like when you cut at the top, the effects are felt throughout the entire employable population. People opposed to this generally are so because they realize there will be ramifications to such an action that affects everyone. No one wants to keep people poor, but not wanting to accidentally put more people in the poor house is something educated people want to avoid as well.
I’d love to hear what an economics professor would say about this. I know there’s a regular left-of-center contributor here that is indeed one… Wonder what he has to say?
Conservatives often say that raising the minimum wage would cause fast-food places to automate and reduce employment.
If that is true, then why haven’t higher minimum wages (like Australia’s $16.88 or Washington State’s $9.19) caused automation-related fast-food job losses in those places?
Tom D-
It is impacting fast food jobs in Australia. It says so right in the column.
“Wall Street Journal columnist Al Lewis points to Australia, where fast-food workers already make about $15 an hour. “Only some of this higher cost of labor is passed on to consumers. The rest is absorbed by using more technology than people, and demanding more productivity from the fewer people they pay this higher wage.””
Tom D, the Australia example is exactly what we should look at. Not only is the cost of living much higher, but food and restaurant prices are 150% of those found in the US. The working poor have a higher minimum wage… but all of life’s necessities also cost much much more. Which, not coincidentally, is what I was saying could likely happen if we up the minimum wage too much too fast.
Increasing wages to the poorest, will increase their spending power. This leads to more jobs created and less dependency on welfare.
This is money that people earn while working, allowing them to be customers to more businesses. In a bad economy, things don’t get better with few jobs and low wages… Let’s expand the economy and get more people working.
Raise the minimum wage!
Well this thread has become a fun hobby! But frustrating…
Tim, what you are saying is correct… it would raise their spending power and add spending to the economy, but as stated 15 times already, this doesn’t happen in a bubble. You will also see prices on all goods and services rise if it is in anyway touched by those making minimum wage. On top of that, you will see the number of people employed at the low level decrease. Both of those decrease the amount of real dollars spent. How much? We can’t know till it’s already taken place…
In the mean time, because prices have gone up, now the person making 10.50 an hr and barely making ends meet for their family just had prices on everything jacked up on them. You’ve just made them poorer. Congratulations.
Maybe it’s better to focus on how we can create better higher paying jobs and finding ways to get people qualified for better jobs… and leave the minimum wage jobs for teenagers and retirees looking to make a little extra money. THAT is how we expand the economy.
Memo to Bruce: On the View today it is revealed that in every state that has adopted picture ID to vote minority participation has gone up, fraud down. The Left should be leading the charge on this. Bckel agreed. Numbers, facts are what they are opinions are baloney.
With these questions all you have to do is aks: How is this going to impact the 57% youth unemployment in the inner city? will this mean more or less jobs? will it mean more automation and the need to for more intelligent and better trained people to handle the automation? What are we going to do to get the 57% jobs and a life?
that was Tommy’s rule, he was the only person around here in the last 50 years, in office that really cared about the kids coming out of MPS and how they would live.
When was the last time that you heard Tom Barrett crusading for better education and training for these kids?
I’m still waiting for the trickle down jobs and wealth that’s never coming. Why should I trust the hucksters that sold us on tax cuts? Do they suddenly have great insights on the minimum wage? No!
It’s just more ideology that tries to keep poor and middle class, poor and barely middle class. Do you really think these people care about the earnings of the poor?
Pinocchio’s nose isn’t as long, as the people arguing against a higher minimum wage. “We care about poor people sooo much, that we want them to make less money.” If that makes sense, why don’t we lower the minimum wage, I bet the price of things will just drop like a rock, right?
We’ll all be better off with lower wages in republican bizarro world!
The Dems have to raise the minimum wage to try to give the people that they have screwed the last 6 years some money. Obamacare is a reverse re-distribution plan, taking from the poor students and helping us old codgers, no wonder Bruce wants it. The rich are doing just fine, but the middle class has really taken a screwing the last 6 years. Contrast that to the Eisenhower, Reagan, Clinton years. Things got better. We added 203,000 jobs last month 41% in the federal govt which negates all of the private jobs we have gotten in the last 6 months to pay those people. Where will it end?
We’ve got the right-wingers on the run already, look how they change the subject! They still know how to lie though, do what you know, I suppose.
http://www.brookings.edu/blogs/jobs/posts/2012/08/03-jobs-greenstone-looney
“A Record Decline in Government Jobs”
Increase the minimum wage and make honest work pay for everyone. It’s the American way.
So glad this remained a rational discussion…
As much as we would like, you can not just wave a wand and make the poor not poor. Nor can you make the rich not rich.
Before the 2009 minimum wage hike there was reason to discuss this but since then it has been raised to as high or higher then any time in the last three decades.
It’s about scarce resources and an equalibrium that our economy attempts to bring about. If you mess with it too much there will be consequences. Knowing raising the wages will increase unemployment in sectors that already suffer the highest unemployment rates why are none of you open to at least exploring whether this is really a good idea or not?
This is now become the preverbial “lets pass this bill to see whats in it” situation… or in this case pass it to see what kinds of effects it has.
There’s no good evidence that raising the minimum wage kills jobs. Why? Because having more customers with more money, is not usually the time a company cuts back on their workforce.
What are they going to do, offshore the drive-thru?
really WCD? You just ruined any credibility that you had by attacking global climate change as if it’s not a reality. Global CLIMATE CHANGE also includes more instances of extreme weather, such as hurricanes, tornados, blizzards, just sayin.’ Not to mention the only scientists that DONT believe in global warming are like 3 Christian scientists who are still trying to scientifically prove their point.
and WCD did you purposely spell ask AKS to be racist or do you just not proof-read?
Tim, there was a study published in the European Economic Review, a peer-reviewed scholarly research periodical, that found the minimum wage increase between 2007 and 2009 accounted for a 0.8% increase in structural unemployment overall, and a 2.8% increase in unemployment between 15-24 year olds (Gorry, 2013). There isn’t really a question about the minimum wage costing jobs, just about how great the effect will be. Sure, as with climate science, there are those who will discredit everyone who disagrees with them, but that doesn’t actually change anything.
Regarding your snide remark about offshoring the drive thru, I’ll point you back to earlier comments and the main article: ‘Wall Street Journal columnist Al Lewis points to Australia, where fast-food workers already make about $15 an hour. “Only some of this higher cost of labor is passed on to consumers. The rest is absorbed by using more technology than people, and demanding more productivity from the fewer people they pay this higher wage.” ‘
If you need a tl;dr version: “more technology … fewer people”
Tim, don’t let facts get in the way of your feel-good policy idea’s.
After the minimum wage was raised in 2009, while the economy grew at 4% and the rest of unemployment stabilized, teen unemployment rose significantly and over 600,000 jobs were lost. That compares to 250,000 lost when the economy tanked.
No, jobs won’t go overseas, you’ll start ordering your food from ipads. Have you shopped at Pick’n’save lately? Did you get checked out by the local HS kid or did you check yourself out? Not to mention the automation we’re already seeing at fast food joints… imagine if labor was that much more expensive?
But it’s so much more then lost jobs. You’ll see prices go up on anything touched by low income workers, profits will erode and do you think corporations will just sit idly and let that happen without making changes? Plus, of the workers who get raises, more productivity will be demanded from employee’s.
Lest we forget, most people affected by a minimum wage hike are not in poverty. Only about a third of those people are from families in poverty. Quite simply, you’re not helping very many of the people you think you are.
Finally, again… the minimum wage is at a real dollar value as high or higher then it’s been during (I’m guessing based on your comments) your entire lifetime!
Hey, if raising the minimum wage is such a good idea, why don’t we raise it to $50/hr?? Then we’ll all be very comfortably middle class!
Matt NOOOoooo! Don’t get sucked into WCD’s rants! You’re better off just ignoring him.
(in his defense on your second post, I doubt he was being racist. I don’t think I’ve ever seen any of his comments showing any intentional racism before this.)
Matt, Bob Dohnal and the WCD has posted on this site for a while. The posts are almost always so riddled with typos that you can’t figure out what he’s saying, and when you can they’re so off-topic it isn’t worth it. I think his sole goal is to get people to give up on the comment sections of left-leaning websites.
Back to the rest of the thread: Okay, $50/hr is bit of a jump. While I’m sure every burger flipper earns every penny of the $100k a year you’re trying to give them, let’s use some real numbers. A general rule of thumb for most food service is 1/3 of costs are labor, 1/3 are food, and 1/3 are facilities. This is a little high on labor in fast food, but not by much. Yes, McDonalds manages to get labor costs below 20%, but most fast food places struggle to get down to 25%, and I don’t want to invite a world where McDonalds is the only ‘restaurant’ left. So if you want the minimum wage to go from $7.25 to the $15 that the fast food worker protests are demanding, you’re basically talking about increasing the price of every food item by 1/3. That’s probably a bit high, so let’s just say 1/4. You might be willing to pay $1.25 for your McDouble to know that the workers are well paid, but that’s a low margin item. You’re probably less willing to pay $7 for a Big Mac meal. And Subway’s $6.50 foot long isn’t quite as catchy a jingle. Unless your annual raise was 25%, you might eat out just a little less, and buy the lower quality items when you do.
I tend to prefer hard data to rambling stories like that, but you don’t seem to want to use numbers or evidence. Increasing the minimum wage will increase most prices. That will have a very real effect on you. You may be in a position to handle that increase, in which case congratulations on winning the American Dream! But a lot of people aren’t in that position, and the price increases will hurt. How much? That’s hard to say, since it’s hard to get a number pinned down for how much to increase the minimum wage. $9/hr is different from $15/hr, which is a far cry from $50/hr.
Yes, I wish I could type, but I studied medicine for 50 years, not typing. Today, in Journal, it was revealed only 2% of the people work at minimum wage and usually not very long, so economic impact will not be to that group but to those at 10-15 dollars per hour that would be increased setting off a change in productivity needs that would be earthshaking to that group of people.
I worked in inner city for ten years in pharmacy, inner city people say “axe”, not aks.
Read the Forbes article that has completely destroyed the Global Warming theory. Facts are funny things, they do not go away while fairy tales perpetrated by the Left will.
Andy, not sure if you remember, but there’s been this thing called a recession going on for awhile, that’s going to affect a lot more teenagers than the minimum wage.
Now, on a more relevant note, you say it won’t help REAL people get out of poverty. REAL people don’t make minimum wage, which has been discredited by the way. However, even if 100% of the people making minimum wage are teens, it would still benefit the economy and those teen workers.
Raise those wages for teenagers, what are they going to spend it on? It doesn’t matter, because most of them will spend it, creating more demand and opportunity for business. Out will come the ‘now hiring’ signs, for teens and adults.
Not that any of your are actually concerned about teenagers’ job prospects, the hardworking poor or increasing job opportunities for the lower and middle classes. The reasons change, but at the end of the day we can count on you to support tax cuts for the rich and benefit cuts for everyone else. You have no credibility, especially since we’ve tried your ideas and they’re only good for making rich people richer.
Raise the minimum wage!
WCD, that’s a pretty weak defense for your typo. I’d have left it off. But, since you made it, the Merriam-Webster dictionary’s entry for “axe” is: ax noun \ˈaks\.
Also, I find it interesting that you publish a digest, but never got around to learning to type or proofread your work. If you were hoping to inspire people to check out your publication, you might want to present a better image. Being the worst fairy tale writer on a lefty website’s comment section doesn’t inspire me to read your other work.
Tim, “real dollars” not real people. The value of minimum wage right now, today, is higher or as high as it’s been in the last 30 years. Why does this not resonate?
But you are right, teenagers don’t make up “most” of the minimum wage earners, they make up about a third. 16-24 year olds make up “most.” I stand corrected. Point being, young people make up most minimum wage earners.
Next, reading my comment about teenage job loss, after the recession hit and all other unemployment stabilized, teenagers unemployment went way up after the minimum wage hike. So this accounts for the recession in that analysis.
And no, I don’t care about how much teenagers make. Generally, they are not supporting themselves or their families, they are working a job to get experience, maybe pay for a car or extra cash for entertainment… maybe even a few saving up for school so they don’t need as many student loans. Teenagers overall don’t represent the poor, we don’t need to subsidize them with hand outs. (as evidence that the median household income of a minimum wage earner is over $60,000)
Once again (I feel like I’m a broken record) the money you give these teenagers is coming from somewhere. Will they spend more of their earnings vs saving compared to someone with a higher income? Probably.. but not by enough to make a dent in the economy. Not enough to justify all the ill effects we could cause by raising the minimum wage too high or too fast.
The minimum wage is at a 30 year high mark, leave it as it is.
Andy, like so many right-wing apologists before you, you don’t know what talking about and/or flat out lying. The minimum wage has lost value accounting for inflation, more importantly, it’s level is more relevant than ever in a service dominated economy.
It’s obvious you don’t care about teens, I’m glad you can admit you were concern trolling earlier. The fact is though, a raise in the minimum wage will be good for them and others in the economy.
Their increased wages will go right back in the economy, these teens will be customers with more money to spend and they will spend it. I don’t care you have a hangup with this, but economically it’s a winner.
Once again, raise the minimum wage… not just for families and young adults, but those teens too!
Tim, it’s amazing how much truth you can state and how many lies you can dispell without a single number or fact to back up anything you say. You sir, have a bright future in politics.
I don’t, so let’s have some more fun with numbers! In 2013, only 32.25% of teens were employed during June and July (the highest months of teen employment). From 2007 to 2009, the minimum wage increased 40%, and caused a 2.8 point reduction in teen employment (Gorry, 2013). Another 40% increase gets us really close to the $10.10 that some politicians have tossed around. A similar drop in teen employment rates would mean 1 in every 11 teenagers would be let go. So those people lose all their buying power. The rest would have more money to spend, but since they are most likely to spend it at places that utilize minimum wage employees (food and retail), the prices they pay will be higher. How much is hard to say, as it varies by business, but no one managed to contradict the 25% price increase I used earlier, so let’s stick with that.
Now, there going to be some math, so if that scares you, take a moment before you continue. If 11 teens have $7.25 to spend at normal prices of $1 (maybe they really like McDoubles and don’t have to pay tax), they can buy 79.75 McDoubles. If 10 teens have $10.10 to spend on $1.25 McDoubles, they can buy 80.8 McDoubles. Yes, you have increased spending power! But at what cost? If you weren’t making minimum wage, you are now demonstrably worse off.
I’m not trying to take a side on the broader issue of balancing society and making work provide for most people, but I think you’re avoiding the numbers and sticking with rhetoric because the numbers for minimum wage don’t say what you want them to. Figure out the problem you’re trying to solve, and then come up with a better solution than this.
Kyle, don’t scare the poor lad with numbers… He has a certain line of beliefs that he’d like to follow no matter what evidence says. Just let him do that, ok? So what if you demonstrated that, without even taking into account that this money going to teens is coming from someone else who also spends money, the teen’s total population spending has barely increased. It just… you know… feels good!
OK just kidding, I’ve got numbers of my own in a sec.
Tim, you and I may disagree on whether we should subsidize teenagers burger and mall purchases, but one thing you can not call me is a liar or say I don’t know what I’m talking about when it comes to the minimum wage in real dollars over the last 30 years.
For you statisticians out there, here’s the breakdown for the last 30 years, 1984-2013 using real value of 1996 dollars. Currently it’s at $4.87. The null hypothesis is Ho ≤ 4.87, alt hypothesis is Ha › 4.87
Sample size 30
Sample mean 4.684333333
sample std dev 0.316180692
√n 5.477225575
Hypothesized Value 4.87
std error 0.05772643
test stat -3.216319786
Degrees of Freedom 29
p-value two tail 0.00318283
For the non statisticians, basically what this is saying that in real dollars adjusted for inflation, we can say with 99.691317% confidence that the current minimum wage in real -inflation adjusted- dollars is equal to or greater than it has been in the last 30 years.
Well that was just fun… who knew this stuff would come in handy again??
Sorry, I’m told I need to cite my numbers.
Adjusted for inflation using the CPI-U (Consumer Price Index for All Urban Consumers).
Source: U.S. Department of Labor. Web: http://www.dol.gov/esa/whd/flsa/
I am proud to subsidize Walmart, Mcdonalds, etc… that have figured out that the top people deserve the millions they make and my tax dollars pay there lifestyle.
There is nothing more disgusting than giving tax dollars to poor people, takers they are called.
What is more American than being a horder of wealth a blaming the poor while you fix the tax system to funnel more money to your coffers.
Jake,
You make such a compelling and well thought out argument. I’ll declare it now, you win the internetz!
After all, I’m sure there’s never any negative consequences to consider when talking about economic decisions…
Wow, you guys have been busy… although that’s not that same as being productive.
So Kyle, you added some numbers to a post… I suppose it would be too much to ask that these be relevant numbers. How do you tie the increase in minimum wage to an increase in unemployment for teens? You casually assume a singular correlation, very sloppy.
2nd, what else have you supported that reduces the teen unemployment rate? It seems you’re concern trolling here, your goal seems to avoid raising the minimum wage. The reasons will change but the aim stays the same.
Andy, you’ve been busy too… why 30 years? Why not since inception? Cherry pick all you want but it seems you’re just leaving me with the pit.
Now, please do another analysis… have housing costs been below or above inflation? How about health care costs? Higher education? Child care?
I’m sure everything has been fine for you in your bubble, although you’re getting worried you might have to pay more for your morning latte. Boo fricking hoo.
Tim, my casual assumption came from the European Economic Review. I don’t have the rights to reproduce the work of that paper here. It’s available through most university libraries, or for $36 on it’s own (with varying subscription rates if you prefer that route). You’re looking for the September 2013 issue, and the author’s name is Gorry. That paper does a good job of isolating the impact of minimum wage on teen unemployment. I’m sorry you think this work is sloppy. If you have any proof of that, I encourage you to publish it. If you have alternate credible sources, I’d be happy to take a look at those.
Regarding my thoughts on teen unemployment rate, while I think there is some value to having a part time job, I prefer to focus efforts on education and training for jobs with the potential to become family-supporting careers. I think the two-year technical colleges are under-utilized and under-supported, and that more young people need to take the time to explore apprenticeships and (paid) internships. I would much rather take the time (and I do) to tutor someone in a STEM subject than fight to make cashier a middle-class career. Admittedly, those individual efforts aren’t going to solve a systemic problem, but nothing about the minimum wage is going to fix teen employment rates either.
I’ll leave you with a quote from the great liberal economist, Paul Krugman (1998): “What the living [minimum] wage is really about is not living standards, or even economics, but morality. Its advocates are basically opposed to the idea that wages are a market price–determined by supply and demand, the same as the price of apples or coal. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for a living wage is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away.”
The moral plan would be to develop programs that get people out of poverty instead of trying to keep them in poverty with food stamps, unemployment, minimum wage and on. If the trillions we have spent have not done that then maybe it is time to change polices and politicos.
It amazes me that the Lefties on this blog never admit what a rotten job the leaders of Milwaukee have done the last 50 years: MPS, one of worst systems in country, Wisconsin Center poorly conceived, poorly run. Milwaukee theater, virtually worthless. MMSD an overspending disaster. Milwaukee County board, a joke. Crime in Milwaukee has elevated us to the top ten in nation, poverty in the worst ten. 57% unemployment of our youth, that cannot read, so force their wages up instead of teaching them, trainng them for skills that will get them above poverty. One thing I give credit, illegit births are down to the kids. One victory, but it is a start.
Make Clarke police chief and toss Flynn and Barrett to the wind. We might get out of top ten.
Don’t you realize that Milwaukee is considered the rectum of the state by everyone else?
“Liberals Have theories, Conservatives solve problems.” Worst solution every: Reynolds and Barbee destroyed the school system with busing.
I wonder how many of you left wing geniuses that have caused all of these problems ever spend any time with inner city people as I have for the last 60 years? when I came to Milwaukee in 1964 I thought that the inner city problems could be solved and thought for sure that they could be solved by ow, but allof your poverty programs have made things worse even though a few families have escaped on sheer force of drive, no help form the Left.
Tim, you think 30 years is cherry picking? Is it cherry picking when you compare it to solely 1968, the single highest year on record and the only year where the wage would be higher than if we raised it to $10.10 /hr?
Every blog, opinion piece, and in general most minimum wage hike supporters seem to site that one year. Yet that one year, besides being the highest on record, is only 2/3rds the real dollar value of what many people want to bump the wage up to. It just boggles my mind.
Please, I invite you to do some research and analysis of your own. Please give us some hard numbers. Please tell us how many people are trying to support a family on minimum wage at least… and show us why hurting so many low income wage earners is worth helping those few.
And Dohnal, no one likes your commentary… even people on the same ideological side as you. You don’t stick to actual facts, you don’t stay on topic, you talk in gross generalizations that add nothing to the conversation. Get your act together and try to have meaningful discussions.
So Kyle, your gold standard of proof is an unlinked and generally unavailable article… Yeah, I’m sure the guy’s research is top-notch as well. Besides, you don’t care either way on the outcomes of teens… Your goal here is to discredit a minimum wage increase. It’s like a mortician arguing against a new treatment for cancer, saying it’s too expensive.
Krugman’s quote is insightful in that you can never eliminate markets, they naturally form in many situations. As you know the markets themselves and the societal goods produced from them, are not maximized by leaving markets to their own devices… Anyone that’s played a game of monopoly knows eventually 1 person owns it all, hence common interventions to civilize markets like banning insider trading or granting patents. I assume you couldn’t care less about improving the function of markets though, this has become a game of throwing everything against raising the minimum wage and hope something sticks… Desperate strategy that’s not working.
As for me, chew on this post and the underlying papers linked if you care. Basically it says raising the minimum wage doesn’t harm low wage workers, obviously heresy to some, actual observed behaviors to the real world.
http://economix.blogs.nytimes.com/2013/12/13/raising-the-minimum-wage-old-shibboleths-new-evidence/?_r=0
Andy boy, that link above mentions 1968 just for you… Your words don’t fit in my mouth, try again. By the way, do you want to see the minimum wage eliminated? Honest question, will that improve the economy? Walk me through that.
As I mentioned, increasing purchasing power of consumers… Leads to increased demand … Leads to more hires. It seems to be beyond you though, where am I losing you?
Tim, you don’t like an actual research journal because they require a subscription, but you provide a link to a blog? Not just any blog, but a blog that cites numerous other blogs to support its position. That must means that there’s no value to academic research, if it’s less reputable than a blog. Clearly we should stop wasting our time and money on such endeavors.
Also, my goal has never been to discredit a minimum wage increase. I just want to define the increase we’re talking about. Are we talking about the $9 minimum in the 7th paragraph of the blog you cited? Or the $10.10 that seems to be the focus later in this blog post? Maybe we’re talking about the $12.45 living wage being discussed in Milwaukee County. But the protesters want $15 for working at McDonalds. Your blog actually starts out by saying it should be $25 (based on peak value in 1968 and productivity increases since then). And I’m pretty sure someone in this thread meantioned $50. So what is it? You tell me Tim, which number do you like today? If your argument is “increasing purchasing power of consumers… Leads to increased demand … Leads to more hires” then pick a high number and defend it. Explain where the money is coming from, and why that won’t have any ill effects.
Personally, I think it could use some modification. I don’t like the idea of tying it directly to inflation. I’d prefer to tie it to the poverty line. The poverty line for a family of 2 is $15,510, so let’s make a full year’s worth of work worth that much, as a minimum. Of course, you have to define full. The typical 2000 hour work year would make that $7.76 (I’m going to round up every number, since rounding down might miss the line by a few pennies). I could pick lots of intermediate values, and someone would say I cherry-picked, so the loosest definition of full time I can find is PPACA (Obamacare). The 30 hour full time work week would mean a minimum wage of $9.95 to get to $15,510. I don’t personally think 30 hours is full time, but I’ll leave it to someone else to define that. After that, if you want it substantially higher, then redefine poverty and the minimum standards. Don’t make up a living wage as whatever you want.
Just in case my advocating for a slightly higher minimum wage didn’t convince you, no I don’t support eliminating the minimum wage, and no this isn’t Monopoly. We have a minimum wage, which regulates the labor market. We also have labor laws, which do that too. And the ever-popular court of public opinion that likes to villify those it deems unworthy. All I’m asking is that you think before you start pushing buttons and turning dials you don’t fully understand.
Andy your arguments richly deserves the ridicule thye get. Milwaukee is a disaster brought about by the Left. Now a “living wage” to cover up the disaster that Obama has been to the middle class the last 6 years. Higher food prices, higher gas, higher everything but no jobs, or parttime jobs lower wages, higher inflation. Now Obamcare is going to put them in the ditch more.
I know that it is hardto argue with facts so you losers do not. Now the city wants to build a new Arena when 10th graders cannot read and Milwaukee is tenth most violent city.
What a bunch lo losers you guys are. I love to hear the Left whine. Walker had to come in and fix the mess that the Left, under Doyle/Burke made in 8 years, and the Left whines. Doyle/Burke did not do one thing to help education despite all the useless rhetoric.
Barrett is useless. Flynn blames the violence on semi auto guns with which only three shootings happened last year. what problem has he solved. They hate Clarke cause he points this out so theey get some idiot to run against him. Barrett has spent all ten years running for something else insetad of solving Milwaukee problems. Now he wants to be fed. judge.
What a sorry lot. Look at what has happened to Waukesha under great leadership compared to Milwaukee.
Merry Christmas Losers.
Wow Bob… name calling! That’s even better than bringing up MPS, MMSD, gun violence, and Barrett wanting to be a judge during a discussion about minimum wages… which obviously are totally related. I’m going to go out on a limb here… and assume you were probably on the debate team back in your day.
Tim, sorry I used my few spare moments today to respond to Dohnal instead of you. I’ll be back!
Thank God for Scott Walker, just got my property tx bill and instead of a big Doyle/Burke, Leftist 5% increase every year I got a cut. Then I read about the disaster that Medicaid is around the country for the state’s budgets i can only thank him agin for not jumping into that tar pit. The rest of you will too.
Kyle, frankly I’m confused by your position. You’re against tying the minimum wage to inflation, but it’s ok to tie it to the poverty line, which is indexed to inflation via the CPI. Explain that to me, I don’t understand where the meaningful difference is.
So, at the end of the day, raising the minimum wage is an attack on inequality. Just the same as raising income taxes on the wealthiest.
If you haven’t fully looked over the link I provided, let me summarize. The share of wages earned has decreased even as the economic pie has gotten bigger. Productivity gains have made every worker produce more, yet those benefits are accruing to the owners of the capital. Obviously, no reasonable person would say an investor isn’t due a fair return on their investment, just as a worker isn’t due a fair wage for their effort.
It’s time to move policies to benefit hardworking people that work for a living, a minimum wage increase is just the tip of the iceberg. A slippery slope to full employment, if you will.
Tim, I support tying it to the poverty line because it is defined. Inflation isn’t really. Just as I argue against generic minimum wage arguments and for a defined position. The poverty line also has a breakdown by state, whereas inflation tends not to. I don’t think this position is inconsistent with anything else I’ve said.
Now that an internet comment has summarized a blog that sites blogs, everything is crystal clear. My problem, yet again, is that you define nothing. Economic pie. Every worker produce more. You act like every business everywhere is exploting the proletariat for record profits. That may be an accurate trend when taken as a whole, but it’s not how the real world works. If it were, every household in the US would be making $50k, and there wouldn’t be an issue. But not every household makes $50k, and not every business is raking in record profits. This method of redistributing wealth will destroy a lot of businesses that aren’t wildly profitable, and the jobs they provide too. Meanwhile, you’ll barely dent the successful businesses that you want to punish, because they’ll find ways to compensate.
What I’ve been trying to get through to you is that a minimum wage increase is not a slippery slope to full employment. Full employment happens when everyone who wants to work can. Increasing the minimum will not achieve this. You may believe the blog that says increasing the minimum wage won’t increase unemployment, despite a wealth of research to the contrary (putting you in the same category as those who deny climate change like Dohnal), but you don’t have anything anywhere that makes a case that increasing the minimum wage will create a job for everyone. I would love to reach full employment, but all the evidence indicates this approach is a slippery slope away from full employment.
Tim,
The worker productivity rate cited by that blog you linked, and repeated by anyone who is pushing for a minimum wage increase, includes all industries including information and communications technology and manufacturing. Both sectors that benefited greatly in terms of productivity since the advent and common adoption of the computer and automation. Neither of these industries have many (basically 0%) minimum wage workers. Meanwhile, all “other” sectors (aka retail, fast food, etc) saw productivity growth at a pace slower than the rise of the minimum wage. (*update of Oliner and Sichel (2002), obtained from Daniel Sichel on February 15, 2010. Line 18 from NIPA Tables 1.1.5 and 5.3.5.)
So when you talk about the increased productivity in workers, you can’t just broadly apply it to minimum wage workers. You cannot say they haven’t gotten their fair raises and enjoy the increased profits that they are producing because in many cases, they haven’t had that increased productivity that’s being incorrectly cited.
As far as your slippery slope argument… I’d like you to hash out that “slippery slope towards full employment” of yours. If you follow the slope to $1/hr and $50/hr… which is more likely to be at full employment? Obviously we don’t want to pay people $1/hr… but as far as full employment, I’m sure everyone who wants to work at that point would be able to… meanwhile at $50/hr I’m going to go on a limb and say our unemployment will drastically rise.
So I bring it back to you. Wouldn’t it be better to create more of those higher paying IT and manufacturing jobs then it is to try and dictate wages at the bottom level?
We still have yet to hear you tell us what minimum wage you support. Ideally, where would you like it to be and why?