The Minimum Wage Destroys Jobs

Their income is increasing at a ridiculous rate.

What is a ridiculous rate? Who determines whether or not it is ridiculous?

socialists and labour unions, usually. They always complain that women (mostly them) don't get paid enough because they are on minimum wage

I'm curious: do women try to get better jobs? Or they are all waitresses?

Originally Posted by Night Phoenix

Now play fair, I've answered yours - answer mine.

answer your what?

My question, genius:

Quote:

What kind of idiot tries to support a FAMILY on six bucks an hour?

the kind that doesn't have any other better choice --- like i said, visit an urban center and the poor there are often working for minimum wage and supporting a family (trying, anyway)

Ok, so then the question is - why don't they have a better choice?

Why do they have children when they can't do any better than a minimum wage job?

The simple fact of the matter is this: I've probably been to more hoods than you've ever heard of and people who work minimum wage jobs trying to support families are people who:

1) Got pregnant or knocked someone up while in high school
2) Had to drop out of school as a result to support those children
3) Have neither the requisite job skills or the education to get better-paying jobs

As such, raising the minimum wage will only hurt these kind of people because these are the FIRST people who lose their jobs when businesses have to cut expenses.

i conceded that in my first post of this thread -- it's sad, but this kind of measure would indeed hurt the individuals, if the economists are right about minimum wage raises being equal to job loss. at the same time, those very economists would predict that higher minimum wage would help our overall national economic strength.

that's my point, it's a conundrum and it's going to be a decision whose outcome no one will like either way.

The problem with the "minimum wage" is that the minimum wage is universal. It is zero. No job, no income, no wage. As it has been pointed out several times minimum wages decrease jobs, thus more people unemployed. However, what has not been pointed out is that most people who benefit from minimum wage are not the people who the minimum wage is intended to benefit. Most people on minimum wage are teenagers/students living at home, people using it as secondary income, people who are supported by non-minimum wage earners. Thus why is the extra cost incurred by society at large from businesses passing costs on to consumers being used to give more money to kids who work at burger king for the summer? What should be done is the minimum wage should only be applied to those who really need it. (The aforementioned, but rarer, $6.hr families). However companies would just not hire those individuals as they would just have to pay them a higher wage.

An aside to the poster who called Ontario a "have not" province. Are you nuts? Ontario is the havingest province to ever have in have-town.

I hope someone comes back to post more about CEOs/Executives/Greedy Republicans/Mysterious Cabals of Old White men being greedy and making "too much money". That argument is rational and not at all laughable.

Originally Posted by Phoque le PQ

socialists and labour unions, usually. They always complain that women (mostly them) don't get paid enough because they are on minimum wage

I'm curious: do women try to get better jobs? Or they are all waitresses?

one little known fact is that waiters get paid less than minimum wage :3 they actually depend on tips. think about that the next time you go eat out at some restraunt ;p

and as a working woman, i get paid $7.00 an hour working in a deli at a grocery store. Keep in mind, I've worked in the same store (i started at about $5.15, minimum wage at the time) for nearing four years. Lets just say men who start working there just recently get paid as much as me (and even more than me), and all they do is cashier.
Iowa is raising minimum wage to $7.15 (i believe, its off the top of my head), and hell, that makes me feel like shit. I'd enjoy the extra money, etc, but the fact that a 14 year old boy who bags groceries will get paid just as much as me when I'm actually holding down 8 hour shifts and 30 hour workweeks (I'm still a student at this time, but during the summer I will most likely work 40+ hours).
But at least I'm getting paid more...

That or you'll be fired.

They also don't depend on tips, employers are required by law to make up the difference if tips earned don't add up to the minimum wage.

Lots of interesting perspectives here. I have a related story.

I work at Starbucks, in Iowa, where minimum wage was 5.15/hour.

Iowa just recently passed a law to increase the minimum wage from 5.15 to 7.25, (in steps, the first step was to 6.20 on April 1st, and the second stop is to 7.25 on January 1st, 2008).

Starbucks hired me at a starting wage of 7.00/hour. In a state that pays a minimum wage of 5.15/hour, that makes Starbucks a pretty attractive entry-level job. 1.50 more than the minimum wage? Awesome! Not to mention all the amazing benefits (but those have nothing to do with minumum wage so I'll leave those out of this discussion).

As a result, we got many many many applications for new employees, and we always had our pick of the litter for people wanting jobs.

To put all this into context...Starbucks is a fairly physical intensive job. You're on your feet your whole shift, you're moving around, lifting moderately heavy to heavy items (gallons of milk repeatedly, up to boxes and cambros filled with coffee and liquids). Basically, when I get home I'm usually pretty tired, and sometimes even exhausted. But the wage was worth it.

With the new minimum wage, Starbucks is going to comply by raising the starting wage to 7.25. What once was a job that paid more than 1.50 over minimum is now going to be a minimum-paying job.

It makes little difference to me in terms of pay now that I'm in management and my salary is not affected by minimum wage... but it's frustrating because we can't find the same quality of help as we used to be able to -- people can get easier jobs where they just stand (or sit!) around and make just as much as the hard-working employees at our store. What we're faced with now more than ever is a huge influx of highschoolers wanting jobs at our store, and the more dependable and harder working employees quitting (unemployment is low in Iowa, no shortage of jobs). People that are still in grade school are great help during the summer... but labor laws and school hours really limit the availability we can get out of them during the rest of the year. And people with office cubicle jobs want coffee every day of the year.

I'm slightly disappointed with the way that Starbucks intends to compensate for the increase of minimum wage. It's one of the few things that I haven't agreed with them on. But I can also understand how they don't want to affect their bottom line more than is necessary. I just hope they will realize the mistake if/when the quality of workers degrades to the point where it affects business and customer loyalty. Ideally they would maintain a steady 1.50 wage gap over the minimum to keep employees happy and keep the quality ones around.

Originally Posted by ComradeTande

and as a working woman, i get paid $7.00 an hour working in a deli at a grocery store. Keep in mind, I've worked in the same store (i started at about $5.15, minimum wage at the time) for nearing four years. Lets just say men who start working there just recently get paid as much as me (and even more than me), and all they do is cashier.
Iowa is raising minimum wage to $7.15 (i believe, its off the top of my head), and hell, that makes me feel like shit. I'd enjoy the extra money, etc, but the fact that a 14 year old boy who bags groceries will get paid just as much as me when I'm actually holding down 8 hour shifts and 30 hour workweeks (I'm still a student at this time, but during the summer I will most likely work 40+ hours).
But at least I'm getting paid more...

Or with their increased pay they'll be able to put more money into the economy, which means that grocery stores will sell more or be able to sell their products for more, which means that a person who makes $7.15/hour can also get a raise.

Or, like in Guru's case, with everyone who was making minimum wage making $1.50 more an hour, they can now spend their money at Starbucks, which means that Starbucks could similarly raise their base pay.

Or, one could argue that Starbucks was paying their employees a fair living wage while people only paying $5.15 were not (yeah, yeah, teenagers and bullshit, there are plenty of family earners on minimum wage).

Last time my state raised the minimum wage was ten years ago. Maybe it shouldn't be pegged to inflation - I think the libertarian argument that minimum wage will destroy your livelihood and lead to rampant inflation is just ridiculous, but I'm not educated enough in economics to say that a minimum wage hike every single year will have minimal adverse effects - but honestly it was well overdue.

And for the record, I too was pissed that I was working a wage slave job for a year, with an additional year's experience previously, and that new hires were getting paid the same I was. It sucks but on the grand scheme of things, it's less 'destruction' and more 'kick in the pants'.

And another thing, and I don't care how many of you disagree, but if a company resorts to hiring illegals and paying them less than minimum wage, they broke two laws and they should be punished for both. If that means I have to pay a little more for my milk - and I don't think the market would bear some sort of dire out-of-control markup like some people will say - I honestly don't care. Fighting illegal immigration by rounding up families and throwing the book at charities is hilariously inept.

I don't even DRINK milk, that's why I don't care. I am totally unaffected by the problem of outsourced labor!

Quote:

I'm slightly disappointed with the way that Starbucks intends to compensate for the increase of minimum wage. It's one of the few things that I haven't agreed with them on. But I can also understand how they don't want to affect their bottom line more than is necessary. I just hope they will realize the mistake if/when the quality of workers degrades to the point where it affects business and customer loyalty. Ideally they would maintain a steady 1.50 wage gap over the minimum to keep employees happy and keep the quality ones around.

Increasing their current entry-level pay would constitute a massive increase in overhead, though, meaning that they would seek to decrease their overall employment and increase the burden of an already physically demanding job to their remaining employees. The end result is better workers, like you said, but it also means limited opportunities for expansion.

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing. Alternatively, prices would go up to meet the increase in overhead, which also means that on the net, nobody has increased buying power.

Nothing about a minimum wage increase reflects any real creation of wealth, which is how workers are able to increase their buying power on the net, you're just shifting the burden of production to a smaller amount of workers, or lowering the buying power of consumers on the net.

Also, Lurker, about inflation. The lack of raise in pay to meet inflation is reflected in the overall price in goods. If workers aren't being payed more, then the price of goods provided by the employer will also remain the same, all things being equal. Unfortunately the devaluation of currency raises the price of raw materials, meaning that products have to rise in price relative to commodity prices. The solution isn't to raise the minimum wage, but to end inflation.

Originally Posted by Bradylama

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing.

So the choices are everyone gets next to nothing, or some people get nothing and the rest get a bit more?

That's how it works. Arbitrarily raising the minimum wage without any reflection on the actual productivity of minimum wage workers is zero-sum. Workers on the net aren't any more productive after the minimum wage hike than they were before. So the choice is, either everybody suffers, or the lowest skilled become economic and political losers doomed to cronic unemployment.

Of course, the other solutions would be to not increase the minimum wage and end inflation, but those are laughed at as entirely "unrealistic" by people who think inflation is a force of nature and not a real result of government fiscal policies.

Originally Posted by BlueMikey

Or with their increased pay they'll be able to put more money into the economy, which means that grocery stores will sell more or be able to sell their products for more, which means that a person who makes $7.15/hour can also get a raise.

It doesn't and wont work that way for Kroger. The #1 Grocery Retailer that is known for paying thier employees crap pay(8 years with them, 7.75/hr - quitting in 2 weeks) they also have the worst overall work ethic among employees(which probably affects how future employers will percieve me when reading my application).

This will happen with places like Publix.

Originally Posted by Bradylama

That's how it works. Arbitrarily raising the minimum wage without any reflection on the actual productivity of minimum wage workers is zero-sum. Workers on the net aren't any more productive after the minimum wage hike than they were before. So the choice is, either everybody suffers, or the lowest skilled become economic and political losers doomed to cronic unemployment.

If it's zero sum, then why would anyone care if it happens or not? =\/

Also, aren't you assuming that every dollar earned is of equal importance? What if the dollar between earning $5 and $6 for four people is much more valuable than the $5 the one person loses?