Shadow Wolf
Certified People sTabber & Business Owner
And yet that isn't really what we see going on in countries with better minimum wage laws than America. They even often have better economic upward mobility than America.
-
Welcome to Religious Forums, a friendly forum to discuss all religions in a friendly surrounding.
Your voice is missing! You will need to register to get access to the following site features:- Reply to discussions and create your own threads.
- Our modern chat room. No add-ons or extensions required, just login and start chatting!
- Access to private conversations with other members.
We hope to see you as a part of our community soon!
California burger flippers are soon to be making 20 bucks an hour under minimum wage law.
- Thread starter Twilight Hue
- Start date
I didn't say we needed to "feel good" about it. I think you missed the point. I'm not saying that I necessarily agree with what the government is doing, but only inasmuch as it seems like a band-aid solution to deal with a much deeper problem.
Unfettered
A striving disciple of Jesus Christ
I see. I misunderstood what you were saying. Apologies.
Of course, because (as I mentioned) California is a much more prosperous and well-off state than most other states in the Union, so it's to be expected that their inhabitants would be equally better off. I used to work with a company that was affiliated with a home health agency in California, and their problem was that in some of the wealthier communities, people earning the salaries of home health aides simply could not afford to live there. As a result, they were starved for workers. I know it's not like that statewide; it's a big state. But it does seem kind of lopsided in a lot of ways.
Unfettered
A striving disciple of Jesus Christ
I thought CA had one of the highest debt-to-income ratios in the nation. If so, that would suggest that the average Californian isn't affording to live there very well. Just sayin'.
Spice
StewardshipPeaceIntergityCommunityEquality
Raising the minimum wage never helps the middle and lower classes! In example, (and I've lived this reality since the minimum wage went from $2.10/hr to $2.25) a person takes a job at minimum wage (in example figures only) at $5.00/hr, with bread at $1.00/loaf and gasoline at $1.75/gal. So a loaf of bread and one gallon of gas takes a little over a half hour (55%) of gross pay to buy.
This person works hard and ethically to earn a $0.25/hr raise for three years running. Now at $5.75/hr, with perhaps bread at $1.05 and gasoline at $1.95/gal, he has maintained a gain in spending power of $0.50/hr of his work week. He can buy a loaf of bread and one gallon of gas for a few minutes less (52%). He's slightly ahead of inflation.
Along comes an increase in the minimum wage to account for that inflation of 25 cents for bread and gas. It's bumped to $6.00/hr. Great, right! His pay is automatically bumped another quarter that he didn't have to earn. Problem?
Yeah; mentally this person just had their self-esteem knocked down. After 3 years of solid dependability, they hire the new guy at the same rate. It starts off okay. He can now get thar bread and gas for an even half hour. But, as always the case, that $1.05 loaf of bread jumps up to $1.25 while gas jumps to $2.25. It now takes more than a half hour (58%) of work to buy the same commodities. Inflation has caught him and "put him back in his place."
Spice
StewardshipPeaceIntergityCommunityEquality
Then we have to find out what other measures they're using. See my post #46. I just had this conversation Monday night with Mexican citizens. Their minimum wage had been increased by the current president, however inflation ate it up quickly. No economic living security gained.
Subduction Zone
Veteran Member
Mexico has even worse corruption at the top than we do.
Unfettered
A striving disciple of Jesus Christ
Here's a very simple example using a starting min wage rate of $15 per hour. Other numbers are not intended to be accurate to anything; just examples to show how a business that needs 20% profit margin will offset a minimum wage increase. Note that no change in overhead or CoGS occurs; all changes are from the min wage increase only.
1. Before minimum wage increase, for a business with 4 full-time min wage earners and the owner, with med benefits
---------------------------------------
Cost of Goods Sold= $5,000 / mo
Overhead = $2,000 / mo
Payroll = $15,000 / mo
Benefits = $1,200 / mo
Taxes = $1,200 / mo
____________________________
Total Expenses = $24,400 /mo
Revenue = $30,500 / mo
Profit = $6,100 / mo
Profit Margin = 20%
2a. After $5/hr increase for 4 min wage earners, plus owner, no change in full-time status, with med benefits
---------------------------------------
Cost of Goods Sold= $5,000 / mo
Overhead = $2,000 / mo
Payroll = $18,312 / mo
Benefits = $1,200 / mo
Taxes = $1,500 / mo
____________________________
Total Expenses = $28,012 /mo
Revenue = $30,500 / mo
Profit = $2,488 / mo
Profit Margin = 8%
2b. After $5/hr increase for 7 min wage earners, plus owner, all min wage earners now half time, no med benefits
---------------------------------------
Cost of Goods Sold= $5,000 / mo
Overhead = $2,000 / mo
Payroll = $16,600 / mo
Taxes = $1,330 / mo
____________________________
Total Expenses = $24,900 /mo
Revenue = $30,500 / mo
Profit = $5,600 / mo
Profit Margin = 18%
3. After $5/hr increase for 4 min wage earners, plus owner, no change in full-time status, with med benefits, but increase in prices
---------------------------------------
Cost of Goods Sold= $5,000 / mo
Overhead = $2,000 / mo
Payroll = $18,312 / mo
Benefits = $1,200 / mo
Taxes = $1,500 / mo
____________________________
Total Expenses = $28,012 /mo
Revenue = $35,500 / mo
Profit = $7,488 / mo
Profit Margin = 21%
2a shows the effect of minimum wage increase on the profit margin of the business. 20% is a workable profit margin for a business this size and allows a business to ride out things like equipment breakdowns, equipment replacements, training new employees, etc., or perhaps acquisition of new equipment for market expansion, a new hire, or raises for the employees. Going from 20% margin to 8% margin is a huge blow, and leaves the business with far less flexibility to deal with unexpected stresses, or may delay needed upgrades or new equipment. Who loses here? The business (perhaps the employees, if the business can't ultimately support the loss in profit margin) Who is responsible? GOVERNMENT
2b shows the effect of minimum wage increase on the employees as the owner attempts to recapture lost profit margin needed for the business. The four original min wage employees lost half their hours, half their income, and all their med benefits. Big loss to them, though the business now has three new employees, also with only half-time hours. Who loses here? The employees. Who is responsible? GOVERNMENT
3 shows the effect of minimum wage increase on the customers as the owner attempts to recapture lost profit margin needed for the business, while seeking to keep the four employees at full time with full med benefits. Who loses here? The customers. They see a 16.3% increase in prices. That's called INFLATION. Who is responsible? GOVERNMENT
That's it folks. The real effects of minimum wage increases. Government meddles with the market; someone always loses. Who will it be—the business owner, the employees or the customers? Perhaps all three, depending on the severity of the market manipulation. It's usually not the business owner, though, even though that's who government is trying to injure (what government never tells the min wage earners is that business owners can (often must)—and usually will—offset what government does, often leaving the employees holding the proverbial bag).
Another reality here that I haven't factored in is that CoGs and overhead will probably increase right along with the minimum wage increase, further exacerbating the pressure on min wage earners. Because all min-wage employers are affected, and some businesses will raise their prices, which will cause inflationary ripples through the entire system.
But let's just keep believing the delusion that minimum wage increases help!
Last edited:
Shadow Wolf
Certified People sTabber & Business Owner
The thing with California, the Bay Area (which includes San Francisco), the LA Metro area (which includes Hollywood and Beverly Hills) amd few other big cities along the coast jack up the average.
Here in the Central Valley the cost of living is much lower. It's also lower up in the mountains, the Inland Empire (though ócrime is higher) and of course it's cheaper out in the desert.
Sand Dancer
Currently catless
Many scrape by with places that are run down and not tended well by land lords.
Colt
Well-Known Member
When Leftist try to manage markets then invariably, they mess it up which requires more fixing that further messes it up that requires still more fixing.....
Fast-food workers in California to earn $20 an hour in 2024
Governor Gavin Newsom signed a new law in California to raise the minimum wage for fast food workers to $20 per hour next year.abcnews.go.com
Sounds good but......
Thousands already have lost their fast food jobs ahead of the increase.
Fast-food restaurants in California are laying off workers to prepare for the $20 minimum wage hike
Two Pizza Hut franchisees in California are among those who are laying off workers, federal WARN filings show.www.businessinsider.com
It's a cruel twist of fate and what do you think is going to happen to the state economy when fast food prices are increased even more than it already has?
Will the struggle between having a living wage and price increases kill the whole purpose of having a livable wage in the first place?
What's the point if the extra money made just gets eaten up when things get even more expensive than ever , bringing things back around to square one , and people can't afford anything because of lost jobs and even new higher prices making the extra difference useless.
It's like giving a raise but higher prices will just eat up the extra income literally. A vicious cycle.
It's a catch 22. Damned if you do, dammed if you don't.
Thoughts?
I think there are so many different factors in play which may make or break an economy. There's a lot of people and businesses out there with their hands out wanting more money. If the oil companies want to raise prices at the pump, we just have to take it. If property owners want to raise housing costs, we just have to take it. It's the same for food, utilities, healthcare, etc. People either put up with it and pay up, or they do without (and this may be the reality for a growing number of people).
The working classes have to struggle to keep up, but they, too, might be seen with their hands out asking for more money. And this is when the complaints seem to begin. All those other businesses asking for more money get a pass, but the idea of workers wanting more money is somehow considered wrong or out of line.
However, I agree with your basic point that simply raising wages won't really be enough. I would support a combination of wage and price controls. If people don't have to pay as much for the basic necessities of life, then they wouldn't need higher wages.
Altfish
Veteran Member
A counter argument ...Fast-food workers in California to earn $20 an hour in 2024
Governor Gavin Newsom signed a new law in California to raise the minimum wage for fast food workers to $20 per hour next year.
Sounds good but......
Thousands already have lost their fast food jobs ahead of the increase.
Fast-food restaurants in California are laying off workers to prepare for the $20 minimum wage hike
Two Pizza Hut franchisees in California are among those who are laying off workers, federal WARN filings show.
It's a cruel twist of fate and what do you think is going to happen to the state economy when fast food prices are increased even more than it already has?
Will the struggle between having a living wage and price increases kill the whole purpose of having a livable wage in the first place?
What's the point if the extra money made just gets eaten up when things get even more expensive than ever , bringing things back around to square one , and people can't afford anything because of lost jobs and even new higher prices making the extra difference useless.
It's like giving a raise but higher prices will just eat up the extra income literally. A vicious cycle.
It's a catch 22. Damned if you do, dammed if you don't.
Thoughts?
Minimum wage is UK’s ‘most successful economic policy in a generation’
Resolution Foundation study suggests lowest earners are £6,000 a year better off due to policy
Altfish
Veteran Member
A counter argument ...Fast-food workers in California to earn $20 an hour in 2024
Governor Gavin Newsom signed a new law in California to raise the minimum wage for fast food workers to $20 per hour next year.
Sounds good but......
Thousands already have lost their fast food jobs ahead of the increase.
Fast-food restaurants in California are laying off workers to prepare for the $20 minimum wage hike
Two Pizza Hut franchisees in California are among those who are laying off workers, federal WARN filings show.
It's a cruel twist of fate and what do you think is going to happen to the state economy when fast food prices are increased even more than it already has?
Will the struggle between having a living wage and price increases kill the whole purpose of having a livable wage in the first place?
What's the point if the extra money made just gets eaten up when things get even more expensive than ever , bringing things back around to square one , and people can't afford anything because of lost jobs and even new higher prices making the extra difference useless.
It's like giving a raise but higher prices will just eat up the extra income literally. A vicious cycle.
It's a catch 22. Damned if you do, dammed if you don't.
Thoughts?
Minimum wage is UK’s ‘most successful economic policy in a generation’
Resolution Foundation study suggests lowest earners are £6,000 a year better off due to policy
Shadow Wolf
Certified People sTabber & Business Owner
Slum lords exist everywhere.
Shadow Wolf
Certified People sTabber & Business Owner
Inflation is a global issue right now. It's not minimum wages, it's war, energy costs and pirates jacking up prices.
Now, once again, if minimum wage laws are so bad why are they working so well in places with a better minimum wage than America?
Spice
StewardshipPeaceIntergityCommunityEquality
Government mandated price control doesn't fit with a free, capitalist economy, but yes we need something to hold things in line. Our system was based on supply and demand with the burden of production cost firmly on the sholders of suppliers, they being self regulated through competition. We need something to bring competition back to the supply end so the working class can have more control on who fills their demand.
We also need to revitalize the power in the working class, not through political stump rhetoric that stirs up the feelings of powerlessness, but through actual steps that work.
When ground beef hit 69 cents a pound way back when, and yes I very well remember that, consumers boycotted all beef. It may not have been a great stand, but it was "doing" something that did show a touch of success. Part of the problem is the mid-level and higher working class continue to spend instead of demanding a controlled economy through their leadership of action.
I'm afraid we're headed towards another economic re-set --not a mere recession.
Spice
StewardshipPeaceIntergityCommunityEquality
Where is this increase in minimum wage working so well? I'd love to have a starting point to investigate what other factors could be assisting the success.
Wu Wei
ursus senum severiorum and ex-Bisy Backson
well by income, and at full time that puts them in Lower-middle class at $41,600 per yearFast-food workers in California to earn $20 an hour in 2024
Governor Gavin Newsom signed a new law in California to raise the minimum wage for fast food workers to $20 per hour next year.
Sounds good but......
Thousands already have lost their fast food jobs ahead of the increase.
Fast-food restaurants in California are laying off workers to prepare for the $20 minimum wage hike
Two Pizza Hut franchisees in California are among those who are laying off workers, federal WARN filings show.
It's a cruel twist of fate and what do you think is going to happen to the state economy when fast food prices are increased even more than it already has?
Will the struggle between having a living wage and price increases kill the whole purpose of having a livable wage in the first place?
What's the point if the extra money made just gets eaten up when things get even more expensive than ever , bringing things back around to square one , and people can't afford anything because of lost jobs and even new higher prices making the extra difference useless.
It's like giving a raise but higher prices will just eat up the extra income literally. A vicious cycle.
It's a catch 22. Damned if you do, dammed if you don't.
Thoughts?